Rwanda expects to increase tea production significantly after privatisation of nine state estates.
Currently, only one of the country's 10 tea factories is privately-owned.
The state will divest its interests from the sector to allow private investors to rehabilitate the dilapidated estates and restore production to pre-1994 genocide levels.
The first factories to be put out to public tender are Phunda and Mulindi in the northeast of the country. Mulindi tea factory, in Byumba Province, is Rwanda's largest, with an annual capacity of 3.5 million kg.
The head of the privatisation department in the Ministry of Finance, Mr Robert Kayigamba, told The EastAfrican that the privatisation of the factories would start at the end of this year.
The privatisation will consist of the sale of state property,
factories and industrial blocsᡄplantations set up by the
government whose management is linked to that of the factories, he
The two factories being initially divested cover 4,002 hectares, which comes to 31.9 per cent of the total tea plantation are under.
Other factories to be privatised are Mata and Kitabi in Gikongoro Province, and Gisakura in Cyangugu; Rubaya and Nyabihu in Gisenyi and Gisovu in Kibuye Province. The British firm Adam Smith Institute has been contracted to advise the state on the privatisation programme.
They said the privately-owned Sorwathe factory, while having only 10 per cent of the national plantation area, produces between 17 and 20 per cent of the country's black tea.
The tea sector is one of the biggest employers in Rwanda, with about 27,000 farmers and 30,000 workers in the industrial blocs and factories. Sorwathe, the private tea firm, in which the state has a 23.5 per cent stake, employs another 1,600 workers.
Tea is the country's second most important export after coffee, representing 36 per cent of total export earnings. Figures from the Finance Ministry show that the commodity earned the country $25.9 million in 1998. Rwanda consumes only about 3 per cent of its production, with the bulk being sold to the UK, Pakistan, Somalia, Sudan and South Africa, through the Mombasa tea auction.
Mr Kayigamba said the government would relinquish control of the tea
factories to strategic investors, and
retain probably a symbolic
number of shares like 1 per cent.
Tea co-operative societies will also retain some shares, ranging from 35 per cent for Mulindi to 15 per cent for the Gisakura Co-operative Society.
The tea factories are under the control of the Office for Industrial Cultivation in Rwanda, which was established in 1964 and also handles the coffee industry.
The Mulindi plant's output significantly reduced following the outbreak of the 1994 war in which it was turned into a command post. At full capacity the factory can produce 80,000 kg a day, but output is currently about half that amount.
Several growers abandoned their farms due to insecurity and some places are yet to resume production of the crop.
With World Bank and European Union funding, Rwanda has rehabilitated four tea factories that had been abandoned following the war. These will be the most sought after once they are placed on the market.