Cross-border trade higher than expected

Exports from Rwanda to neighbouring countries may be 50 percent higher than currently recorded, says the Economist Intelligence Unit.

A recent study has found that over 99 percent of Rwanda's exports at a border crossing between Cyangugu in southwestern Rwanda and Bukavu in the Democratic Republic of Congo went unrecorded, and are worth an estimated US $10 million per year.

The EIU described the figure as "substantial" as Rwanda's total recorded trade exports were rarely more than US $85 million.

Although some of the trade was unrecorded because it was smuggled - such as charcoal from Rwanda's Nyunhwe forest - most of it was perfectly legal, the EIU said. Typical exports included food items such as cassava, tomatoes and fish.

Exports of services from Rwanda to Bukavu amounted to about US $250,000 and typically included items not available in the DRC such as banking, insurance, post and communications, the study showed.

While Rwanda imported little from the DRC, there was "extensive smuggling" across the border, particularly of petrol and diesel. Fuel in the DRC cost US $0.20 less per litre due to low or non-existent taxation, the EIU reported.

The study had been received with interest by Rwandan policy analysts, the EIU said, as it was the first serious attempt to quantify the nature and extent of Rwanda's cross-border trade.

The level of unrecorded trade at the Cyangugu border crossing also raised questions about the country's real level of trade with other neighbouring countries such as Tanzania, Uganda and Burundi.