Constraints to Rwanda’s export performance

Abstract

The research investigated the constraints to the effective performance of Rwanda’s exports. The need for the study arose from the fact that over the years, Rwanda’s exports have been fluctuating from time to time. This volatility in the growth of exports has often resulted into recurrent deficits in the balance of trade and unfavorable overall balance of payment. It was therefore crucial that a study be conducted to establish the factors that account for this volatility hence make pertinent and practical recommendations from an informed point of view. In order to accomplish this, three objectives were formulated to find out the extent to which the three variables accounted for the variability in the performance of Rwanda’s exports. The independent variables involved the constraints on the supply side, demand side and foreign market requirements. It was hypothesized that each of the three variables has a significant effect on the performance of firms involved in the export business. The research employed a cross sectional research design using a sample of fifty seven (57) purposively selected firms in the city of Kigali, from exporting firms that were fully registered by the year 2008. The respondents comprised of owners, senior and middle managers or technical staff. The data pertaining to the study was collected using a Self Administered Questionnaire and oral interviews. The results of the Pearson correlation coefficients revealed significant positive correlations between the independent variables and the dependent variable. In particular the findings showed that when the supply, demand side and foreign market access constraints improve, the volume of exports significantly increases. In view of these findings conclusions and recommendations are proposed. These include among others, integrating export business directly or indirectly into development clusters of management, standard setting and quality initiatives, market information and physical infrastructure by catering for export business needs.