Rwanda’s only textile mill, L’Usine Textile du Rwanda (Utexrwa), is struggling to stay in business due to competition from imported fabrics.

The mill, which opened in 1984, is also grappling with high production costs, making its fabric too expensive for ordinary Rwandans.

Because the majority of Rwandans prefer secondhand clothes, the mill has been forced to cut production.

When The EastAfrican visited the factory in Kigali, some production lines had been switched off. The silk production department, for example, was not working while several warehouses had been rented out to private businesses.

Three years ago, the factory’s capacity utilisation was 40 per cent but this has since dropped to 20 per cent, raising concerns about the $75 million facility’s ability to survive amid growing competition.

According to the Rwanda Development Board (RDB), “Currently, almost all fabric is imported — cotton from East African Community member countries and artificial fabrics, primarily polyester, from South Africa, Taiwan, Korea and Indonesia. The local textile articles demand is higher than national production.”

“Every year, we spend over $15 million to import secondhand clothes,” said Claver Gatete, Minister of Finance and Economic Planning, during the recently concluded National Dialogue.

The figure is more than five times the turnover of Utexrwa, which government officials place at between $2 million and $3 million.

Rwanda has a population of 12 million people, requiring 72 million metres of fabric per annum, but Utexrwa can produce only 12,000 metres.

In order to protect Utexrwa from competition, Rwanda plans to introduce tariff barriers. Duty on imported clothes is set to rise from 35 per cent to 70 per cent and later 100 per cent.

READ: Textile industry to recover as tax raised on imported clothes

Strategic investment

RDB notes that the textile and apparel industry in Rwanda is of strategic importance, primarily due to the amount of entry-level skilled labour jobs it creates and for trade balance implications (decrease on foreign imports).

“The proposal to increase the tax will be tabled before the Cabinet and will be announced during the budget review,” said Francois Kanimba, Rwanda’s Minister of Trade and Industry.

The budget review process usually takes place in March.

Mr Kanimba said that the Rwandan government further encourages local garment makers to source their materials from Utexrwa to help reduce the pressure on foreign exchange reserves bring down the widening import bill.

However, consumers have criticised the tax, saying the textile industry does not have the capacity both in terms of quality and quantity to satisfy the market.

“The Rwandan demographic is largely young people, who are highly dynamic in their dress, I don’t see Utexrwa servicing their fashion needs even in the next 10 years. It can make uniforms for the army and schools, but beyond I don’t see much of a future for it,” said Moses Hakiza, a fashion designer based in Kigali.