Through an agreement with Chinese garment manufacturer, C&H, the deal will commence the process of creating a textile generating sector.
“This agreement with the Chinese company is helping us to meet two objectives. One of them is to create jobs and also to improve our exports especially to the bigger countries in Europe and the United States,” Clare Akamanzi, COO of the Rwanda Development Board told CNBC Africa.
C&H are expected to invest in equipment in a Rwanda training base and employ at least 200 workers in the beginning of its operations. The East African government will fund 50 per cent of the cost of the training programmes.
“We are looking at C&H to come and produce garments here and we think that in two years the company will be able to produce garments worth three million dollars per year and then we expect that to increase over the years. We also expect to employ over 1,000 Rwandans after two years. So it is very labour intensive,” Akamanzi said.
C&H owners are highly experienced in the manufacturing sector. Hua Jian, a Chinese shoe producer was successfully set up and managed by Helen Hai. Hua Jian is the largest shoe exporter in Ethiopia.
“We are driving export growth into the country because Rwanda wants to reduce its trade deficit and we believe such finished products are at a higher value than the commodities we have been selling. We expect there to be a more significant improvement in our exports over the medium term.”
Tea and coffee are the main export commodities in Rwanda with its main export partner being China, Germany and the United States. At regional level, Kenya is currently the main destination of exports of Rwandan products.
During the country’s budgetary 2014/2015 speech, the government said that export promotion was among top priorities scaling up the manufacturing sector, “This is in line with the strategic priority we have in the country,” said Akamanzi.
Rwanda is focused on achieving its Second Economic Development and Poverty Reduction Strategy (EDPRS2) programme. Other priority areas under the EDPRS2 include energy, agriculture, urbanisation and rural settlement, employment programme and skills development.