Mitumba dealers say China would benefit from ban

Grace Wangui a second hand clothes(mitumba) dealer in Nyeri Town. [Kibata Kihu, Standard]

The argument that second-hand clothes suppress the growth of the local textile sector has been debunked in a new report published by the Mitumba Consortium Association of Kenya.

The report noted that there is no evidence to ascertain this claim which has been a subject of heated debate in the country.

Titled The Second-Hand Clothing Industry in the East Africa Community indicates that banning second-hand clothing would do very little to address the structural weaknesses of domestic textile production in East Africa.

"There are major production and supply side challenges that need to be confronted," reads the report authored by Professor Patrick Diamond.

Prof Diamond is a professor of Public Policy at Queen Mary University of London and Director of the Mile End Institute.

"There is no evidence that weakening second-hand clothing will lead to a renaissance of local textile," said Diamond.

Policy

Severally, politicians and other policy leaders have found themselves on the receiving end whenever they proposed policies aimed at growing the local textile sector with a lens view of reducing the importation of second-hand clothes in the country.

During the height of the August 2022 General Election campaign period, comments by the opposition leader Raila Odinga that mitumba clothes are from the 'dead' was shunned by traders from the sector.

Trade Cabinet Secretary Moses Kuria also found himself on the receiving end because of some of his recommendations to improve the local textile sector which he said were misconstrued insisting that he does not need to ban mitumba.

"I will not ban mitumba. I do not need to ban mitumba. I will give people better options. That is what I said to make sure people are able to buy clothes made in Kenya at a cheaper price," he revisited the issue during a broadcast interview.

Mitumba Consortium Association of Kenya chairperson Teresia Wairimu said that it is a misconception that a growing second-hand clothing industry undermines domestic textile production.

"In fact, when second-hand clothing is suppressed; cheaper garment trade in other parts of the world such as China would benefit," she said.

Fostering innovation

She said by supporting the second-hand clothing industry, local textile production is stimulated as well by the use of recyclable materials and fostering innovation.

"This will not only create a thriving domestic textile industry but also contribute to job creation and economic growth," she said.

Ms Wairimu said there are two million Kenyans who benefit directly from the trade of second-hand clothing. These are traders who ply their skills in the sale and resale of these clothes.

She argues that the regional market should avoid protectionism and adopt measures that strengthen the regional and national domestic base of the textile sector.

"The evidence suggests that weakening the domestic second-hand clothing production base in EAC would merely benefit cheap garments trade in China," reads the report. "There is little evidence to support the claim that second-hand clothing importation undermines the domestic production of textiles."

Mitumba clothes displayed for sale by traders at Gikomba market on 14th June 2022. [Edward Kiplimo, Standard]

The report documents that in the 2000s, the growth of the second-hand clothing industry and new garments was simultaneous.

The report proposes that these two sectors should work together.

"National governments across East Africa should seek to shape policies that boost second-hand clothing businesses and textile producers in EAC member states, rather than pursuing protectionist industrial policies that are unlikely to benefit workers or consumers," the report says.

Rise of China

The report quotes a paper published in The Economic Journal that claimed second-hand clothing accounted for 40 per cent of the decline in production and a 50 per cent drop in employment in domestic textile in the continent in the 1980s and 1990s.

"A detailed analysis of the data indicates that the decline of African clothing industries was the consequence of structural adjustments and market liberal policies alongside increased exposure to global trade over the last three decades," the report details.

It adds: "The so-called Washington consensus stipulated that opportunities for economic growth and development were only possible by reducing state control and liberalising markets."

These measures led to the rise of China.

"Evidence from countries that have enacted a ban suggests that such prohibition rarely has positive outcomes. Restricting the importation of second-hand clothing merely imposes costs on consumers and used clothes retailers, depleting both tax revenues and living standards," the report states.

Nationalisation

Several studies, the report adds, have shown the decline of the African clothing manufacturing industry was also largely due to poor governance and growing civil strife.

"In a country such as Uganda, for example, the decline of the industry was the consequence of nationalisation in the 1960s and 1970s which led to serious mismanagement," the report says.

The sector, the report says, has suffered historically from a lack of management expertise, weak linkages across the value chain, poor application of new technologies, unfair trading practices, lack of technical skills and absence of supportive infrastructure.

The report says it is not credible to argue that these major competitiveness challenges would be addressed merely by banning used clothing imports.

"All the evidence, including the impact of the ban in Rwanda, indicates that imposing a prohibition on second-hand clothing would simply lead to a growth in informal imports of second-hand clothing into EAC countries," the report says. "It is highly likely that China will move to exploit any prohibition by increasing imports of new apparel and illicit second-hand clothing."

Rwanda case study

The report documents the effects of banning second-hand clothing in Rwanda which has reduced jobs to 27,450 in 2022 from 142,000 in 2011.

The Mitumba Consortium seeks to even increase the number of jobs created by the sector in the country which now stands at two million directly.

A customer shop for mitumba cloth at Toi Market in Kibra, Nairobi on June 09, 2022. [Stafford Ondego, Standard]

This is by pushing for modern sorting centres which will enable clothes destined for Kenya to be sorted locally and not abroad before being shipped.

She said a ban on mitumba will deny the country much-needed revenue which stands at Sh62 billion ($419 million) in duties and taxes across the EAC member states.

She insisted that the dumping argument for banning mitumba as well does not hold water. Ms Wairimu said for every 40-foot container, traders pay sh2.7 million (USD 18,000) to the government.

"Why would one pay Sh2.7 million ($18,000) for 50 per cent of clothes to go to waste? We don't buy mitumba to dump. What we have is quality A or B," she said.

The report details risks around the African Growth and Opportunity Act (AGOA) where countries may face penalties from the United States if they impose a ban on second-hand clothes.

It documents Rwanda's predicament after imposing the ban.

"Kenya, Tanzania and Uganda had proposed to ban second-hand clothing but changed their position having recognised the economic benefits flowing from the trade agreement with the United States," the report says.

The report says while trade agreements such as AGOA have led to increased growth and output, which is welcome, these markets in themselves do not necessarily serve the needs of African consumers.

"It is therefore vital to promote a buoyant second-hand clothing sector within East Africa," the report says.

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