Sectors of Production
Senior 3 · Entrepreneurship
Sectors of Production
Lesson 2 of 4
24 min
NISR’s report on the economy in 2025 lists how much each kind of manufacturing grew compared with 2024:
| Manufacturing branch (NISR, 2025) | Change in production |
|---|---|
| Non-metallic minerals (mainly cement) | +35% |
| Chemicals and plastics | +24% |
| Metal products | +21% |
| Food processing | +9% |
| Textiles | −1% |
| Manufacturing as a whole | +10% |
Cement, metal products and plastics (such as pipes and tanks) are all used to build. In the same year construction grew by 11%. One kind of secondary activity was pulling another along. This lesson looks at the whole secondary sector: what it makes, how it adds value, and why Rwanda wants it to grow.
Definition
Secondary sector: the sector that changes raw materials into finished or semi-finished goods, and builds structures. It includes manufacturing, processing, assembly, construction, and the supply of electricity and water.
Manufacturing: making goods on a large or small scale, usually with machines, from raw or processed materials. Example: making soap from palm oil and caustic soda.
Construction: building and repairing structures such as houses, roads, bridges and dams.
| Kind | What it does | Examples |
|---|---|---|
| Processing (agro-processing) | changes a farm or natural product into a more useful or longer-lasting form | milling maize into flour; turning milk into yoghurt; washing and drying coffee; making fruit juice |
| Manufacturing (fabrication) | makes new products from materials | cement, soap, furniture, clothes, roofing sheets, plastic pipes, medicines |
| Assembly | puts together parts made elsewhere into a finished product | assembling computers, phones or bicycles |
| Construction | builds and repairs structures | houses, schools, roads, bridges, water tanks |
| Energy and water supply | generates electricity and treats and pipes water | power stations; water treatment plants |
Secondary enterprises also differ in scale. A cottage industry is production in the home or a small workshop, by hand or with simple tools, such as basket weaving, pottery and mat making. Small-scale industries use a few workers and machines, such as a maize mill or a carpentry workshop. Large-scale industries use heavy machinery and many workers, such as a cement plant.
Definition
Value added: the value that a producer adds to the inputs it buys from other producers. Wages, rent, interest and profit are all paid out of value added.
Import substitution: producing at home goods that the country used to import, so that it spends less foreign currency.
Example: a Rwandan factory that makes plastic water tanks replaces some imported tanks; the tank sells for more than the plastic and other inputs cost, and the difference is its value added.
Worked example
Worked example 1: value added by a small dairy (illustrative figures)
A dairy buys 100 litres of milk from farmers at Frw 400 a litre, and spends Frw 30,000 on sugar, culture and plastic cups. It makes 180 cups of yoghurt and sells them to shops at Frw 900 each. Find its value added.
Step 1, output: , so Frw 162,000.
Step 2, inputs bought: , so Frw 70,000.
Step 3, value added: , so Frw 92,000.
Interpret. If the farmers had sold the milk raw, Rwanda’s output from it would have been Frw 40,000. Processing raised it to Frw 162,000, of which Frw 92,000 was created by the dairy itself.
Tip
Memory hook: “P-M-A-C-E”. The five kinds of secondary activity are Processing, Manufacturing, Assembly, Construction and Energy and water. If a question asks whether an activity is secondary, ask: “Does it change materials into a good, or build something?”
| Importance | How it works |
|---|---|
| Adds value to raw materials | Processed goods sell for more than raw ones, so farmers and miners earn more and the country’s output grows. |
| Creates jobs | Factories and building sites employ skilled and unskilled workers: 16.5% of the employed worked in industry in 2025. |
| Saves foreign exchange | Goods made at home replace imports (import substitution), so less foreign currency is spent. |
| Earns foreign exchange | Processed goods such as packed coffee, flour and clothes can be exported. |
| A market for primary producers | Factories buy milk, maize, hides, timber and stone, so farmers and quarries have steady buyers. |
| Reduces waste | Processing turns perishable produce into goods that keep, such as dried fruit, flour and yoghurt. |
| Builds infrastructure | Construction provides the roads, schools, hospitals and houses that every sector needs. |
| Spreads skills and technology | Workers learn to use and repair machines, and new methods spread to other firms. |
The Ministry of Trade and Industry (MINICOM) set out its plan to grow local production in its Made in Rwanda Policy (November 2017). Its five pillars are sector strategies, reducing the cost of production, improving quality, promoting backward linkages (buying inputs from local suppliers) and changing mindsets towards local products.
The Kigali Special Economic Zone set for expansion as demand for space grows, a report on RwandaTV, the Rwanda Broadcasting Agency’s channel. The zone is an industrial area in Kigali set aside for factories and warehouses. Watch for the kinds of goods made there, and sort each into processing, manufacturing or assembly.
Warning
Common mistakes. (1) Calling every factory “manufacturing”: a coffee washing station processes; a computer plant that puts together imported parts assembles. (2) Forgetting construction: building a road is secondary, though no factory is involved. (3) Counting the whole selling price as value added: subtract what was bought from other producers.
Worked example 2: which branch of industry employs more people?
In 2025, 4,772,705 people were employed. NISR’s Labour Force Survey put 8.9% of them in construction and 5.6% in manufacturing. Find the number in each, to the nearest hundred, and the difference.
So about 424,800 in construction and 267,300 in manufacturing: a difference of about 157,500.
Interpret. Construction employs more people than all manufacturing together. Much building work is still done by hand, laying blocks and mixing concrete, so each project needs many workers.
Practice
Sources and credits
Written by Ganzaa: the tables, the value-added diagram, the worked examples and the practice items. The dairy and the carpenter are illustrative (2026).
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
