The East African Community (EAC) is considering higher import duties on finished textile products as part of efforts to protect local manufacturers, encourage domestic production and strengthen the region’s textile and apparel industry.
Under the proposed tariff reforms, imported finished products could face duties of between 30% and 35%, compared with the previous 25% rate. The reforms would also affect other imported products, including iron, steel, wood and wood products.
The East African Business Council (EABC), representing private-sector businesses across the region, proposed a 32.5% duty on finished products. The proposal was expected to be considered by EAC member states as part of the review of the bloc’s Common External Tariff (CET).
EAC Moves Toward Four-Band Tariff System
The EAC’s three-band tariff structure, introduced in 2005, imposed a 25% duty on finished goods, 10% on intermediate goods and zero duty on raw materials.
Member states subsequently agreed to move toward a four-band structure designed to provide greater protection for industries considered strategically important to the regional economy.
Under the proposed system, raw materials and capital goods would remain duty-free. Intermediate products unavailable within the EAC would attract a 10% duty, while intermediate products available within the region would be subject to a 25% tariff.
A fourth band would apply to finished products, although member states discussed whether the highest rate should be 30% or 35%.
Imported second-hand clothing was also expected to receive greater tariff protection by being classified as a sensitive product.
Textile Industry at Center of Regional Strategy
The tariff proposals form part of broader efforts by East African governments to develop local cotton, textile and apparel value chains.
The region has sought to reduce its dependence on imported second-hand clothing and low-cost ready-made garments while encouraging consumers to purchase locally manufactured apparel.
According to estimates cited at the time, Chinese exports of low-cost ready-made clothing to East Africa were valued at approximately $1.2 billion annually, while the United States accounted for around 20% of direct used-clothing exports to the EAC.
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However, efforts to restrict imports have generated mixed reactions. While stronger tariffs could benefit regional manufacturers, locally produced clothing can be more expensive than imported second-hand garments, creating affordability concerns for consumers.
EAC Supports Local Textile Manufacturing
Tariffs are only one element of the region’s textile development strategy. EAC member states have introduced initiatives to encourage regional fashion and textile production, including Afrika Mashariki Fashion Day, which promotes clothing manufactured within East Africa.
Member states also agreed in 2017 to provide textile and garment manufacturers with a three-year waiver on duties and value-added tax for certain production inputs, fabrics and accessories unavailable within the region.
Individual countries have also introduced national initiatives.
Uganda developed a cotton, textiles and apparel strategy focused on increasing cotton fibre production, expanding domestic value addition and creating employment.
Tanzania, meanwhile, identified cotton production and exports as an important opportunity for increasing agricultural and textile-related revenues.
These national programs complement the EAC’s wider objective of developing competitive regional textile, apparel and leather industries.
A study by the EAC Secretariat estimated that the cotton, textile and apparel value chain had the potential to develop into a major regional industry, highlighting the economic opportunities associated with increasing local production, manufacturing and value addition.
By Faith Ikade / Ventures Africa
