Government has temporarily lifted a ban on the exportation of unprocessed hides and skins to compensate for dwindling revenues coming in from export of these livestock products.
The Permanent Secretary in the Ministry of Trade and Industry, Antoine Ruvebana said that the provisional permits are eligible to hides and skins dealers with much stocks.
“This will help them (dealers) clear their stocks since many hardly find the market because of the global financial crisis and low prices. Once the economic situation normalises, we may sustain the ban to emphasis on value addition,” he explained.
In 2005, government imposed a ban on exportation of raw hides and skins, allowing only processed products to access international markets because of their higher price tag.
A recent survey by Business Times revealed that two abattoirs in Kigali have rotting stocks of hides worth about Rwf80 million. They have not exported any unprocessed hides and skins.
For example, Satra Abattoir in Kicukiro district was estimated to have rotting stock worth Rwf40 million.
Rugondo Mugabe, the proprietor of Satra Abattoir (slaughterhouse) in Kicukiro district said that the provisional permits will not solve many of their problems.
“Well, we will export and reduce on losses but remember this is only for a short while. We are still living in fear that the ban will be back soon,” he said.
“It is like we are only allowed to clear our stocks yet hides and skins keep on piling day-in-day-out since we slaughter everyday.”
Government expects $10 million (Rwf5.4 billion) from the industry by 2012. Information from the Rwanda Development Board (RDB) however shows that export earnings in the last two months of this year fell by 35.43 percent and 46.53 percent in value and volume respectively.
Government had also targeted $4 million (Rwf2.216 billion) in 2008 but only managed to fetch less than a half.
The sub-sector’s hope lies in Rwanda Leather Industries, which has some machines but low processing capacity.
Dealers had early claimed that investment in ternaries for value addition was expensive thereby suggesting that government should perhaps consider cost sharing or attracting foreign investors.
A ternary, where hides and skins are treated for value addition, is estimated to cost $2 million (Rwf1.1 billion).