The expansion of the local leather industry has provided a lucrative alternative market for local hides and skins traders who previously exported the raw materials to other countries.
Many traders have been selling hides and skins to neighbouring countries especially Kenya and Uganda, which has caused a scarcity and affected the nascent tanning industry.
In the past, these traders cited lack of a viable market for locally-sourced hides and skins, hence exporting them despite the high cost of transportation.
“There was no ready market for hides and skins, which is why we opted for outside markets, but things are changing as we now have a number of factories and we shall be selling to these factories” said Hassan Hakizimana, a hides and skins trader.
They said there is no major difference in price, but they will not be incurring huge transport costs incurred when exporting.
The government previously came up with ways to protect the local leather industry through increased tariffs on exports of hides and skins, but some traders continued to export.
“These factories need a steady supply of hides and skins to operate, so if dealers don’t comply, the government will take other measures,” said Francois Kanimba, the Minister of Trade, Industry and East African Community Affairs.
Late last year, the Cabinet waived taxes on imported raw materials and accessories for the garment and footwear industries, because the taxes were making the final products too expensive for local buyers.
The government’s move was in line with a concerted plan to grow local footwear and garment industries to curb the burgeoning trade deficit through import substitution.
There was also a region-wide decision to phase out importation of second-hand clothing and footwear, which Rwanda duly implement