Two companies have now entered the Rwandan textile market as the country prepares to phase out secondhand clothes and shoes.

Guangzhou-based textile investor Albert Supply Ltd, and Burundian leather products manufacturer Rwantan Ltd have acquired 2.5 hectares in Kigali’s Special Economic Zone, on a 20-year sub-lease agreement with the government.

“We want production to start by July next year,” said Albert Nsengiyunva of Albert Supply Ltd, who has pledged to invest up to Rwf10 billion ($12.9 million).

After the region announced plans to phase out secondhand clothes, Rwanda increased tax on used clothes and shoes.

There are few local producers of affordable quality garments and shoes to serve the local market; Utexrwa, the government’s only garment maker, does not have the capacity to meet the quality and volumes demanded.

The Rwandan government has planned interventions to develop and strengthen the capacity of the textile, apparel and leather sectors.

In the recent budget, taxes on used clothes increased by 1,150 per cent — from $0.2 per kilogramme to $2.5 per kilogramme, raising their prices to the consumer. Taxes on used shoes went up by 900 per cent, from $0.5 per kg to $5 per kg.

Low purchasing power among Rwandans, and the need to reduce the trade deficit, are among the factors why garment producers have turned to the export market.

Mr Nsengiyunva said even though he would like to sell all his products locally, he will be also export some of them. “The purchasing power is still low in the Rwandan market,” he said.