Import Substitution for Industrial Development?
Analysis of the Effects of the Made in Rwanda Campaign and the Protective Second-Hand Clothing Tariff Policy on the Rwandan Textile and Garment Industry
Charlotte LonitzWien, Oktober 2025 | 978-3-902906-78-6

The topic of second-hand clothing illustrates the economic, social, and environmental impacts of global textile and garment value chains and, more broadly, the complex interrelations in production, trade, and consumption between the Global South and the Global North. The dynamics of global production networks in second-hand clothing have already been examined in several master’s theses published in the ÖFSE Forum. Encouraging students to explore this field of research is one of the many contributions of Cornelia Staritz, who also supervised this thesis in her role as Associate Professor at the Department of International Development at the University of Vienna.
In her Master’s thesis, Charlotte Lonitz focuses on the policies introduced in Rwanda to foster its domestic textile and garment sector by reducing the pressure from imported second hand clothing and by national initiatives and strategies. The thesis combines the theoretical approaches of Global Production Network (GPN) analysis and the economics of import substitution policies for industrialization and consumer behaviors. The research is based primarily on 48 semi-structured interviews conducted in Rwanda.
The thesis offers a precise overview on the global textile and garment industry as well as the global second hand clothing dynamics, followed by details on the national textile and garment sector and the supporting policies in Rwanda. These include the ‘Made in Rwanda’ initiative, the import tariff against second hand clothing – which Rwanda was able to keep as only countries in the East African Community – and the sector-specific strategies to promote local textiles and garments production.
The analysis highlights some positive effects of the policy mix in terms of investment and employment. However, the import substitution in the sector remained limited. This was due to the persistent perception of locally manufactured clothing as inferior, the rise in imports of new clothing from Asia, and the weak development of local linkages and inputs. Furthermore, the changes in the national import and production structures particularly affected local second-hand clothing retailers and low-income consumers in Rwanda. The thesis thus provides an excellent example of the complex interconnections and governance structures within value chains that shape the outcomes national industrialization policies in a low-income country that seeks to integrate into and upgrade within global production networks.