Wednesday, October 21, 2020
Home Africa Rwanda's clothing spat with the US helps China

Rwanda’s clothing spat with the US helps China


Workers at the C&D Products factory in KigaliImage copyright
Jeroen van Loon

Image caption

Rwanda is working hard to build up its garment industry

More than 100 sewing machines rattle away at a factory on the outskirts of Kigali, the capital of Rwanda.

A cooperative of 83 of the African nation’s tailors established the company – the Kigali Garment Centre – last year.

Located in an industrial area built on one of the rolling green hills surrounding the city, it was set up in line with the Rwandan government’s strategy of boosting the country’s clothing manufacturing sector.

“We’ve trained 130 youngsters, of whom 97% are female, since the factory launched,” says the firm’s director general and co-founder Jerome Mugabo.

Behind him on the main factory floor, employees, who all seem to be in their teens or 20s, are producing chino trousers.

Image copyright
Jeroen van Loon

Image caption

Jerome Mugabo says his business is proud to mostly employ women

Rwanda’s efforts to boost its domestic garment industry have seen it fight a lonely, and continuing, trade battle with the US that dates back to 2015.

Back then the six members of the East Africa Community (EAC) block of countries – Burundi, Kenya, Rwanda, South-Sudan, Tanzania, and Uganda – announced that they would all put in place high tariffs on the import of second-hand clothing or “chagua”.

The idea behind the de-facto ban was to stop the importation of large quantities of cheap used clothing, mostly from the US and the UK, which the African nations said were stifling the growth of their nascent garment industries.

The extent of the issue for the six countries was shown bywidely reported 2015 figures from the US Agency for International Development (USAID). The USAID said that in that year, the EAC states accounted for almost 13% ($274m; £213m) of the global imports of used clothing.

The study also found that almost two thirds of the combined populations purchased some second-hand clothes.

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 theAfrican Growth and Opportunity Act (Agoa).

Enacted back in 2000, this allows 39 sub-Saharan African nations to export thousands of goods duty-free to the US.

After the US’s announcement, all EAC members except for Rwanda backed out. It went on to introduce a tariff of $4 per kilogram on imports of used clothing in 2018. The US responded by putting tariffs of 30% on Rwandan clothing, where there had previously been none.

Image copyright
Getty Images

Image caption

When Rwandan President Paul Kagame met US President Donald Trump in 2018, things were said to be frosty

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.

However, Jerome Mugabo say he remains pleased by Rwanda’s decision to go it alone. “It helped us to set up our business, as we get more customers since the ban,” he says.

Ritesh Patel, managing director of Rwanda’s oldest garment factory – Utexrwa, which was founded in 1984 – agrees.

“Rwanda needs to do this to be able to grow its economy,” he says. “As people were able to buy a second-hand men’s shirt for 800 Rwandan francs [84 US cents; 64p], they were not interested in a new men’s shirts of 4,000 Rwandan francs that we could produce.”

For years Utexrwa had focused solely on the production of uniforms, for the police, companies and schools. But since the ban on second-hand clothing imports, it has expanded into ordinary clothes, like men’s shirts.

Image copyright
Jeroen van Loon

Image caption

Hong Kong’s C&D Products exports what it makes in Kigali to Europe

“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.

Yet where there are winners, there are also losers. “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.

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.

“My sales plumped because I had to increase my prices fivefold to be able to make a living,” he says.

Mr Nzeyimana adds that he now struggles to pay his children’s school fees.

Image copyright
Jeroen van Loon

Image caption

Rajabu Nzeyimana (left), a seller of imported second-hand clothes, says his life has been made more difficult

The withdrawal of the Agoa trade benefits for apparel also makes Rwanda less attractive as a manufacturing base for international garment producers.

Chinese firm C&H Garment closed its factory in Kigali a few months after the US retaliated. It had exported more than half of its production to the US.

Another 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. “It is obviously a problem,” says Maryse Mbonyumutwa, co-owner of its Rwandan subsidiary.

Such Chinese firms are increasingly interested in opening factories in Africa, as the labour costs are much lower than in China. 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.

To help the country’s clothing manufacturers, the Rwandan government has removed import taxes on raw materials such as cotton. And new factories get grants and loans.

Image copyright
Jeroen van Loon

Image caption

The Chinese flag flying outside the C&D Products factory in Kigali shows China’s increased influence in Rwanda

Some experts, however, doubt if Rwanda will be able to build a competitive clothing industry. 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.

Water and electricity are also costly, and road transport is extremely bureaucratic and expensive as Rwanda is a landlocked country.

The ban on used clothes also seems to have a totally different – unintended – effect as it pushes Rwandans to start buying cheap, imported new Chinese clothes.

“The government should have waited until the country had build a mature textile industry before banning chagua,” says clothes seller Felicien Maniraguha. He has switched from selling imported used clothes to imported new Chinese ones.

Global Trade

More from theBBC’s series taking an international perspective on trade:

Mr Maniraguha says that local clothing production is still on too small a scale, and that the garments are not fashionable enough.

“Local garment factories currently only ensemble boring clothes that look like uniforms,” says the 30-year-old.

He contrasts this with the fashionable Chinese-made jeans and floral pint T-shirts that he is currently selling.

“Rwandans prefer clothes that look modern,” he says. “I doubt if the local textile industry will ever be able to produce nice, fashionable clothes that will become more popular than cheap Chinese imports.”

10 COMMENTS

  1. Its like you read my thoughts! You seem to know a lot about this, such as you wrote the e book in it or something. I believe that you just can do with some p.c. to pressure the message home a bit, however other than that, this is excellent blog. An excellent read. I will certainly be back.

  2. I must get across my passion for your kindness for visitors who really need help with this one area of interest. Your personal dedication to passing the solution all through turned out to be particularly functional and has usually allowed folks much like me to realize their desired goals. Your important guidelines means a lot to me and a whole lot more to my colleagues. Regards; from everyone of us.

  3. A lot of thanks for all your labor on this blog. Ellie loves setting aside time for internet research and it’s really simple to grasp why. Almost all notice all regarding the lively ways you create simple thoughts through the blog and cause participation from others on this article so our girl is really becoming educated so much. Enjoy the rest of the new year. Your carrying out a splendid job.

  4. I needed to write you the little note just to say thank you over again for all the magnificent solutions you have shared in this case. It is quite wonderfully open-handed with you to provide without restraint just what many people might have supplied as an e book in making some money for their own end, most notably given that you could have done it if you considered necessary. The tricks likewise acted like a good way to recognize that some people have the same dreams much like my personal own to figure out good deal more with reference to this condition. I know there are numerous more pleasant moments ahead for many who looked at your site.

  5. I enjoy you because of all of your effort on this web site. My niece really likes getting into investigations and it is obvious why. We all notice all of the powerful way you produce important tips and tricks on the blog and in addition foster response from people on this situation so my simple princess is in fact starting to learn a great deal. Take advantage of the remaining portion of the year. You’re the one doing a superb job.

  6. I and my guys have been looking at the excellent tactics found on your web page and then suddenly got a horrible suspicion I had not expressed respect to you for them. My young boys were definitely consequently passionate to read them and have in effect actually been taking advantage of those things. Many thanks for indeed being so considerate as well as for settling on some good resources millions of individuals are really desperate to discover. Our own honest apologies for not saying thanks to you sooner.

  7. I wanted to draft you a little note to be able to say thanks a lot yet again for these extraordinary strategies you’ve shared above. It was quite surprisingly open-handed with people like you to deliver publicly what exactly a few people could have offered as an e book to get some cash for themselves, precisely considering the fact that you could have tried it in the event you decided. The good ideas also worked like a easy way to be certain that most people have similar passion just like my own to know the truth way more with respect to this issue. Certainly there are several more pleasurable occasions up front for people who browse through your site.

  8. I intended to put you that little bit of note to help say thanks a lot the moment again for the pretty solutions you have discussed above. It has been so remarkably generous with people like you to deliver unreservedly what many of us would have offered as an electronic book to end up making some profit on their own, precisely since you might well have tried it in the event you decided. Those basics in addition served to become a good way to recognize that other people have the same keenness the same as mine to know a lot more related to this issue. I am certain there are numerous more enjoyable opportunities in the future for folks who read carefully your blog post.

  9. I precisely desired to thank you very much all over again. I am not sure the things I would have sorted out in the absence of the tricks provided by you on my field. It actually was a real depressing scenario in my opinion, but coming across this skilled style you processed the issue forced me to cry with happiness. I am just grateful for your guidance and as well , wish you comprehend what an amazing job that you are doing instructing most people through your web site. Most probably you have never met any of us.

  10. I really wanted to make a simple comment to be able to express gratitude to you for all the wonderful guides you are giving here. My time-consuming internet investigation has now been honored with sensible suggestions to exchange with my neighbours. I would assume that we website visitors are unquestionably blessed to dwell in a great website with many outstanding people with helpful tips. I feel somewhat happy to have encountered the webpages and look forward to plenty of more amazing minutes reading here. Thank you once more for everything.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Ryder Cup 2010

McDowell knew the Twenty Ten course like the back of his hand. He’d won the Wales Open on the course that year and during a period when he lived in Cardiff he used the venue as his practice area.As the match descended into the home stretch McDowell sunk a 15-foot birdie to go 2-up on…

GB’s Evans calls opponents ’embarrassing’

Evans was knocked out in the singles in the first round by Kei Nishikori of JapanBritain's Dan Evans said his doubles opponents were "embarrassing" after becoming involved in an on-court row at the French Open.The British singles number one and Polish partner Hubert Hurkacz beat Dutchman Matwe Middelkoop and Brazilian Marcel Demoliner in the first…

US team walks off after ‘homophobic slur’

Collin Martin (pictured playing for former club Minnesota United) came out as gay in 2018Landon Donovan said his San Diego Loyal "would not stand" for bigotry having left the pitch in protest after an alleged homophobic comment was aimed at openly gay midfielder Collin Martin.An opposition player from Phoenix Rising was accused of making the…

As colleges reopened, many more young people got covid-19, CDC reports – msnNOW

Covid-19 cases surged nationally among 18- to 22-year-olds between Aug. 2 and Sept. 5, according to a report released Tuesday by the Centers for Disease Control and Prevention, which urged young adults as well as colleges and universities to take precautions to prevent the spread of the virus.Weekly cases among the age group jumped 55…