Kigali, Rwanda – The Rwandan government has temporarily suspended an 80% development levy on the export of raw hides and skins outside the East African Community (EAC), a measure originally introduced in 2015 to promote local value addition. The suspension, effective until November 2026, aims to address market shortages within the region and support the growth of Rwanda’s domestic leather industry.
Why the Levy Was Suspended
According to Trade and Industry Minister Prudence Sebahizi, the decision was driven by:
- Limited regional demand, leading to stockpiling of raw hides.
- The need to stimulate trade while Rwanda develops its tannery and leather-processing infrastructure.
- Plans to attract investment in a local leather industry to reduce reliance on raw material exports.
Rwanda’s Leather Industry Development Plan
The government has taken concrete steps to establish a domestic leather sector, including:
✅ Land allocation: A 20-hectare site in Bugesera District has been designated for a tannery park.
✅ Infrastructure development: An effluent treatment plant and other essential facilities are being prioritized.
✅ Investor engagement: The government is seeking local and international partners with leather industry expertise.
✅ AfDB support: The African Development Bank is assisting in capacity building for SMEs and vocational training.
Economic Impact & Market Reactions
- No major revenue loss: Economic analyst Straton Habyarimana noted that the levy was not a significant income source, as high taxes had discouraged legal trade.
- Price recovery: Since the suspension, cow hide prices rose from Rwf100/kg to Rwf350/kg, with further increases expected.
- Export opportunities: Traders like Aline Niyigena (Goodskin Ltd) report better pricing power with access to global markets.
Industry Calls for Value Addition
Jean D’Amour Kamayirese (Kigali Leather Cluster) urged that:
- All hides pass through local processing hubs before export to create jobs.
- Rwanda should outsource processing if needed, then re-import finished leather for domestic use.
What’s Next?
The suspension provides a two-year window for Rwanda to:
- Finalize tannery infrastructure.
- Attract private investment.
- Transition from raw exports to finished leather production.
