East African businesses should identify products with the greatest export potential and target promising markets under the African Continental Free Trade Area (AfCFTA), an East African Business Council (EABC) trade expert has said. Adrian Raphael Njau, Trade and Policy Advisor at the EABC, said greater value addition to raw materials in sectors such as leather, textiles and edible oil could help businesses capture a larger share of the African and global markets. “There is a need for increased value addition to the region’s raw materials to unlock greater value from the growing global leather market,” he said. Njau noted that EAC Partner States exported raw hides and skins worth $33 million in 2023, while imports stood at $6 million. ALSO READ: Why Rwanda suspended 80% levy on raw hides export out of EAC Globally, trade in finished leather increased from $57 billion in 2005 to $99 billion in 2024. However, the EAC accounts for less than one per cent of global leather exports, while the region imported $49 million worth of leather goods. Njau said East African countries need to invest more in processing and manufacturing to move beyond exporting raw materials and capture more value from the leather industry. The EABC, with support from the African Development Bank (AfDB) through the Fund for African Private Sector Assistance (FAPA), is empowering enterprises in the textile, edible oil and leather sectors with practical knowledge and skills to access AfCFTA markets through the Rwanda Business Clinic. As the onboarding agent for the Afreximbank Africa Trade Gateway (ATG), the EABC will support participating companies to join the platform, giving them access to business-to-business matchmaking, market intelligence and trade finance solutions to facilitate cross-border trade. The Africa Trade Gateway is a pan-African digital trade platform developed by Afreximbank to connect exporters, importers, financiers, logistics providers and government agencies and make cross-border trade easier. Businesses in the textile, leather and edible oil value chains continue to face challenges including low value addition, limited processing capacity, high production costs, skills shortages, regulatory gaps and limited access to finance. ALSO READ: Govt courts investors for $15 million tannery park in Bugesera The Business Clinic provides training on AfCFTA market opportunities, Rules of Origin, tariff concessions, customs procedures and export requirements. It also offers one-on-one advisory support on market entry strategies and export readiness. The EAC Industrialisation Strategy 2012–2032 seeks to increase the local value-added content of resource-based exports from 8.6 per cent to 40 per cent and raise intra-regional manufacturing exports from 5 per cent to 25 per cent by 2032 through stronger regional value chains. The region also has significant investment opportunities, including the need for at least 93 additional weaving mills to meet growing textile demand. The leather sector, meanwhile, captures less than one per cent of global leather trade despite the EAC accounting for four per cent of the world’s cattle and six per cent of its small ruminants. Global trade in raw hides and skins declined from $6.2 billion in 2005 to $3.3 billion in 2024, while trade in semi-processed leather fell from $22 billion to $12.4 billion. In contrast, finished leather trade grew from $57 billion to $99 billion during the same period. According to the International Trade Centre’s Export Potential Map, East African businesses have untapped export opportunities worth $298 million for apparel and textiles in South Africa, $63 million for vegetable oils and fats in India, and $17 million for leather products in Uganda. Njau said the three sectors were selected because of their potential to drive industrialisation, strengthen regional value chains and create jobs. “We have to build the capacity of Rwandan businesses in three sectors—leather and leather products, textiles and edible oil—to enable them to export under the African Continental Free Trade Area,” he said. ALSO READ: Investors eye leather factories as Rwanda pledges to establish tannery park He said the region has abundant hides and skins but still exports some of them in raw form, limiting the value generated from the sector. “By adding value to these raw materials, we can increase exports within the EAC and across the African continent. The same applies to textiles, where we have significant potential to add value to our raw materials and export finished products beyond the region,” he said. Njau also pointed to the edible oil sector, saying the EAC imports substantial volumes of edible oil despite having the potential to produce more locally. “Rather than remaining net importers, we want to become net exporters by adding value to our products and exporting them across the African Continental Free Trade Area and beyond,” he said. The Business Clinic is also helping businesses understand market requirements and how to benefit from preferential treatment under the AfCFTA. Njau said businesses would be trained to use the e-Tariff Book, identify market opportunities and obtain a Certificate of Origin from the competent authority in Rwanda. Consignments accompanied by a valid Certificate of Origin can qualify for preferential tariff treatment under the AfCFTA. Businesses seeking to export under the agreement must register as exporters, comply with Rules of Origin, obtain a preferential Certificate of Origin and meet customs and regulatory requirements in destination markets. Tannery park planned The government is also banking on a tannery park planned for Gicumbi District to boost leather production and reduce reliance on imported processed hides and skins. Once fully operational, the park is projected to generate $430 million in annual revenue. According to Rwanda’s Industrial Policy 2024–2034, the leather goods subsector offers short-term opportunities to manufacture boots and shoes for the domestic market, while the long-term potential includes high-value export products such as bags and jackets. Beresheba Hakizayezu, a leather goods producer, said the proposed tannery would significantly reduce the cost of raw materials for local manufacturers. “We want finished hides and skins produced by a local tannery. This will reduce production costs because Rwanda has enough livestock to supply the industry,” he said. He said a 30-square-centimetre piece of finished leather currently costs between Rwf1,800 and Rwf2,000, compared with an estimated Rwf800 to Rwf1,200 if produced locally. Hakizayezu currently produces about 100 pairs of shoes a month but said limited machinery and high equipment costs constrain production. He said a cutting machine costs about Rwf9 million, while a skiving machine costs around Rwf3 million. According to the Ministry of Trade and Industry, Rwanda suspended the 80 per cent development levy on exports of raw hides and skins outside the EAC in November 2024. The levy, introduced in 2015, will remain suspended until November 2026. The government said the temporary suspension was prompted by limited demand within the EAC, which resulted in large stocks of unsold raw hides and skins. The measure is intended to provide temporary relief as Rwanda works to establish a domestic leather tanning industry.
