Rwanda : initiatives to boost rawhide production by 2030

The leather industry holds significant revenue potential. According to the Ministry of Trade and Industry, Rwanda’s rawhide production currently generates $2.8 million per year. However, the country has only one tannery, Nova Leather, located in Huye’s industrial park, which processes just 5% of locally available hides. To address this gap, the government plans to establish a modern tannery park in Bugesera within the next two years. “We are mobilizing the necessary budget to set up an effluent treatment plant and other essential infrastructure to attract investments,” stated Prudence Sebahizi. This future tannery park is expected to produce 9 million square feet of finished leather annually, mainly for export.

To support this expansion, authorities are planning the construction of a 20-hectare industrial park in Bugesera by 2027, dedicated to leather production. While the total investment amount remains undisclosed, the facility, once fully operational, is expected to produce 9 million square feet (836,127 square meters) of leather per year, supplying both export and local markets.

African Development Bank (AfDB) Support and Industry Training

The Rwandan government has secured support from the African Development Bank (AfDB) to strengthen its leather industry. This assistance aims to enhance the capacities of small and medium-sized enterprises (SMEs) in leather processing and train key players, including hide collectors and collection centers.

Due to limited local processing capacity, most of Rwanda’s rawhides are exported to Kenya, Uganda, and other international markets, despite being recognized as some of the highest quality in the world. According to the Ministry of Industry and Trade, Rwanda’s leather industry has the potential to generate $430 million in annual revenue, compared to just under $3 million today.

Challenges for local leather producers

Rwandan artisans and entrepreneurs in leather product manufacturing face high costs due to imported tanned hides. Germaine Mukashyaka, a leather goods entrepreneur, explains, “Since we have to import tanned hides, our products end up being more expensive.”

Marie Jeanne de Chantal Umuhorakeye, another entrepreneur in the sector, confirms the strong demand for locally produced leather, boosted by the “Made in Rwanda” initiative. However, she believes that the lack of local tanneries limits the competitiveness of Rwandan manufacturers.

Temporary Suspension of 80% Export Levy to Revive the Sector

To revitalize the industry, the government has temporarily suspended an 80% levy on rawhide exports to non-East African Community (EAC) markets until November 2026. This tax, introduced in 2015 to encourage local processing, led to large stockpiles of unsold hides due to a lack of demand within the region. “Suspending the levy has opened up new opportunities for customers outside the EAC, increasing the value of Rwandan hides,” says entrepreneur Marie Jeanne de Chantal Umuhorakeye. According to economic analyst Straton Habyarimana, this measure is unlikely to significantly impact tax revenues, as the high taxation had previously pushed traders towards smuggling. Jean D’Amour Kamayirese, President of the Kigali Leather Cluster, notes that the export tax policy had drastically reduced raw cowhide prices, from $1.40 per kilogram in 2015 to just $0.069. Since the opening of new markets, prices have begun to recover.

Expanding to the African Market Through AfCFTA

Rwandan hide traders now seek access to the African Continental Free Trade Area (AfCFTA) to broaden their customer base. Jean D’Amour Kamayirese advocates for lower export taxes to non-EAC African countries, where demand for leather is high.Rwanda produces 215,000 tons of meat annually, 35% of which is beef. As meat production rises, so does the availability of rawhides, reinforcing the urgency of developing the leather industry.

Ranked among Africa’s top-performing countries in governance and business facilitation, according to the World Bank’s Business Ready report, Rwanda stands out for its investment-friendly policies. According to the World Bank’s Doing Business report, Rwanda is consistently among the most attractive African countries for investment, thanks to simplified administrative procedures, strong anti-corruption measures, and favorable taxation policies. Investors interested in Rwanda’s leather industry can benefit from tax incentives, including exemptions on imported industrial equipment, access to special economic zones with affordable industrial land, and a rapidly growing market with strong export potential.

The Rwandan government actively supports public-private partnerships (PPPs) to accelerate infrastructure development and ensure a steady supply of raw materials.

Rwanda’s commitment to developing its leather industry is already attracting investors. During the African Leather Value Chain Forum, held in Kigali in December 2024, several companies expressed interest in setting up local production facilities. With a rising livestock sector, strong export ambitions, and a business-friendly environment, Rwanda is positioning itself as a key player in Africa’s leather industry.