While Uganda, Kenya, Tanzania, Ethiopia and Burundi are major cotton producing countries, Rwanda needs to import this raw material, as the tiny state isn’t suitable for major cotton production, being a mountainous and extremely densely populated country. Some experts, however, doubt if Rwanda will be able to build a competitive clothing industry. To help the country’s clothing manufacturers, the Rwandan government has removed import taxes on raw materials such as cotton. What C&D is now doing is exporting to Europe from its Rwandan factory, while planning to build two manufacturing sites in Tanzania to focus on the US market. Such Chinese firms are increasingly interested in opening factories in Africa, as the labour costs are much lower than in China. “It is obviously a problem,” says Maryse Mbonyumutwa, co-owner of its Rwandan subsidiary. It had exported more than half of its production to the US.Īnother Chinese clothing firm with an operation in Rwanda – Hong Kong’s C&D Products – agrees that the stand off with the US is an issue. The withdrawal of the Agoa trade benefits for apparel also makes Rwanda less attractive as a manufacturing base for international garment producers.Ĭhinese firm C&H Garment closed its factory in Kigali a few months after the US retaliated. Rajabu Nzeyimana (left), a seller of imported second-hand clothes, says his life has been made more difficult. Mr Nzeyimana adds that he now struggles to pay his children’s school fees. “My sales plumped because I had to increase my prices fivefold to be able to make a living,” he says. The 42-year old father has sold used clothing for seven years, but since 2018 has been forced to start buying it at a much higher price from traders who smuggle it from the Congolese border town Goma into Rwanda. “Life has become very difficult,” says Rajabu Nzeyimana, who stands behind a wooden market table piled high with second-hand boxer shorts, and a basket full of second-hand socks. Yet where there are winners, there are also losers. “It really helps that we no longer have to compete with cheap chagua, while we simultaneously witness a quickly growing middle class that will be able to afford “Made in Rwanda” products,” adds Mr Patel. Hong Kong’s C&D Products exports what it makes in Kigali to Europe But since the ban on second-hand clothing imports, it has expanded into ordinary clothes, like men’s shirts. “As people were able to buy a second-hand men’s shirt for 800 Rwandan francs, they were not interested in a new men’s shirts of 4,000 Rwandan francs that we could produce.”įor years Utexrwa had focused solely on the production of uniforms, for the police, companies and schools. “Rwanda needs to do this to be able to grow its economy,” he says. Ritesh Patel, managing director of Rwanda’s oldest garment factory – Utexrwa, which was founded in 1984 – agrees. “It helped us to set up our business, as we get more customers since the ban,” he says. However, Jerome Mugabo say he remains pleased by Rwanda’s decision to go it alone. While Rwanda was only exporting about $1.5m of clothing per year to the US at the time, this stopped that overnight, and meant that the African nation could not hope to increase it. The US responded by putting tariffs of 30% on Rwandan clothing, where there had previously been none. It went on to introduce a tariff of $4 per kilogram on imports of used clothing in 2018. Keen to hang on to its share of these exports, the US responded that the proposed ban would violate free-trade agreements, and it threatened to remove the EAC countries from the African Growth and Opportunity Act (Agoa).Įnacted back in 2000, this allows 39 sub-Saharan African nations to export thousands of goods duty-free to the US.Īfter the US’s announcement, all EAC members except for Rwanda backed out. The study also found that almost two thirds of the combined populations purchased some second-hand clothes. The USAID said that in that year, the EAC states accounted for almost 13% ($274m £213m) of the global imports of used clothing. The extent of the issue for the six countries was shown by widely reported 2015 figures from the US Agency for International Development (USAID).
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