Rwandans will have to dig deeper into their pockets to afford basic necessities such as clothing. The government announced plans to increase tax on used clothes and shoes in the new financial year as it seeks to cut down on cheap imports.

Taxes on used clothes which the majority of Rwandans find affordable will increase by 1,150 per cent — from $0.2 per kilogramme to $2.5 per kilogramme, effectively making them too expensive as the government intensifies measures to stem its growing trade deficit.

It also wants to protect its nascent manufacturing industry from competition.

The government has also increased taxes on used shoes by 900 per cent, from $0.5 per kg to $5 per kg making the items out of the reach of low-income earners.

The move to impose high taxes on used clothes and leather products comes ahead of a planned ban by the East Africa Community but Rwandans say it is a wrong move, as the targeted industries are still struggling.

READ: EAC heads of state to ban used clothes and shoes imports

ALSO READ: Fresh plan seeks to revive East Africa’s troubled textiles sector

The announcement has triggered a public outcry, and many argue that the decision has been rushed given that the local manufacturers can meet neither the quality and quantity demands of the local market.

The public also argue that imports are cheaper than the majority of locally produced clothes and shoes.

“We don’t need string shoes and tire shoes only…the shoes we need are sports shoes and there is nowhere you can find durable sports shoes made in Rwanda,” said Leon Jim, a resident of Kigali on our sister radio station, KFM, page reacting to the tax increment.

“That [tax increment] is for people who earn millions of francs a month. I am sure this will be done but within a short time they will see that it is not possible,” said another resident Reagan Mwizera.

Presenting the budget, Rwanda’s Finance and Economic Planning Minister Claver Gatete pointed out the government has selected key sectors namely cement, sugar, rice and clothing where it believes local production can reduce current imports while ongoing export promotion efforts will be supported by the export promotion fund.

“High priority will be given to economic activities which will either increase export revenues or reduce import volumes. The identified key sectors for fostering economic activity include textiles, garments and leather industry, agriculture export crops, agri-business, construction, livestock, wood industry, minerals, tourism and ICT and trade and investment facilitation,” Mr Gatete said.

READ: Push for local manufacturing to hurt East Africa integration

Rwanda has also come up with a policy to encourage the booming local construction industry to consume locally made cement as part of the bigger campaign of dubbed 'Consume Rwanda build Rwanda'.

With Cimerwa increasing its production capacity from 100,000 tonnes to 600,000 tonnes and Arm Cement Ltd planning to also increase its cement production capacity from 100,000 tonnes to 300,000, Rwanda believes it has built capacity.

ARM Cement, a Kenyan company that owns Kigali Cement, plans to increase the Kigali plant’s grinding capacity after securing a $140 million equity boost from CDC as it tries to remain in the competitive and tough cement business in East Africa.

RwandAir has been allocated $66 million as a loan for acquisition of two long haul-wide body aircraft needed on the Kigali-Asia and Kigali-Europe routes as the airline ventures into new markets.

The government has also allocated $47 million in agricultural export promotion by investing into the entire agriculture value chain. The idea is to help famers produce more, reduced post-harvest losses and access markets.

It also plans to directly intervene in the mining sector by providing incentives to investors and facilitating the players buy putting up key infrastructures needed to make the sector attractive. Mining is Rwanda’s second largest foreign exchange earner after tourism.

READ: Drop in mineral prices forces Rwandans into farming

As part of the intervention in value addition, a special power line is set to be dedicated to Phoenix Metals to stabilise electricity to the cassiterite smelting plant.

The unreliable power to plant forced it to suspend smelting cassiterite in 2015, though ongoing audits to make sure the minerals are conflict free are largely to blame.

Management of the Phoenix Metals told The EastAfrican that whenever power goes off, what they has smelted solidifies resulting into damaging the equipment, adding to the cost of production.