Banning Second-Hand Clothes Key to Jump Starting Africa’s Textile Industries

• African ministers for trade and industries have adopted a protocol that prevents trading second-hand clothes across the continent under the preferences of the AfCFTA.
• The textile industry on the continent will grow at a Compound Annual Growth Rate (CAGR) of more than 4 per cent by 2027.
• According to the African Development Bank Group (AfDB), up to 600 per cent of value can be created along the cotton value chain if proper measures are implemented.

President Yoweri Museveni has officially banned the importation of second-hand clothes in Uganda. The ban be made effective on 1^st September 2023. Speaking at the commissioning of 16 factories at Sino-Uganda Mbale Industrial Park on the 25^th of August, 2023, he referred to second-hand clothes as ‘used clothes of dead white people’. Simultaneously, the President also extended the ban to electric cables and electricity meters. He underlined that they should be bought from factories in Uganda. The event also marked the groundbreaking of nine new factories.

‘I have declared war on second-hand clothes to promote African wear. They belong to dead people. When White people die, they gather their clothes and send them to African countries. We will stop importing second-hand clothes to create more jobs in the textile and apparel industry. We will not allow them to enter the country anymore.” he noted. Ghana shares sentiments similar to President Museveni, where they use the expression, ‘obroni wa wu,’ which means “the clothes of the dead white man.”

This is to boost the Buy Uganda Build Uganda (BUBU) policy, which was approved in 2014 by the country’s cabinet, towards promoting locally made goods and services. The ban is set to encourage and bolster local production. Uganda is a significant cotton producer, but the bulk of it is exported in semi-processed form. According to the country’s Central Bank, between 2012 and 2022, the value of the country’s cotton exports ranged between $26 and $76 million annually.

Like most African countries, Uganda has been importing bales of used clothing for decades. African consumers prefer second-hand clothing because of their affordability at meagre cost compared to those sold in boutiques. However, the economic downturn has accelerated the allure of second-hand clothing, broadening the customer base to include consumers with higher income profiles. Local manufacturers’ warnings about the dumping of these apparel have finally reached the ear of the President. This has impeded the country’s ability to climb the value chain of the cotton and textile industry.

‘Our local producers who make new clothes cannot infiltrate the market because second-hand clothes have flooded the market.’ Museveni noted. It’s a significant roadblock to the growth and development of local textile industries.

The President singled out Chint Meters and Electrical (U) Ltd, based at the industrial park, with an annual output of 300,000 single-phase meter units but grappling with an unstable market. “Our factories here make meters, but the civil servants prefer importing. I order government bodies to buy meters and cables starting 1^st September 2023. They should have stopped this automatically without waiting for me to come,” Museveni highlighted. This comes barely a month after the Uganda government banned timber exports to fight deforestation. With Rwanda and Uganda already on board, will Kenya and Tanzania follow suit?

In 2016, the East African Community (EAC) regional economic bloc, of which Uganda is a member, resolved to ban imported used clothing by 2019. However, Rwanda was the only one that followed through with this enactment. Consequently, in 2018, the US withheld the country’s right to export clothing duty-free to the United States, which was among the benefits of being a part of the United States’ tariff and quota-free African Growth and Opportunity Act (AGOA).

This is the US trade preference program for Africa, which allows duty- and quota-free exports from eligible African countries into the US. Its expiration date draws nearer as it is set for 2025. There has been much speculation that it might be replaced with new trade agreements between the US and African countries that follow the free trade policies of the African Continental Free Trade Area (AFCFTA) agreement and the reciprocal trade policies promoted by the US Prosper Africa initiative.

As of May 2023, 35 Sub-Saharan African countries were eligible to benefit from the AGOA treaty. However, utilisation rates vary significantly. According to Brookings, Kenya and Lesotho have the highest utilisation rates. Up to 88 per cent of Kenyan and 99 per cent of Lesotho exports to the US qualified for zero tariff treatment. In both countries, apparel products dominated their exports to the US.

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AfCFTA – African ministers adopt a protocol to ban the trade of second-hand clothes

On the 1^st of June 2023, African ministers for trade and industries adopted a protocol that prevents trading second-hand clothes across the continent under the preferences of the AfCFTA. This was during the high-level African Union – East African Community and the private sector forum, the second Ministerial Retreat of the Council of Ministers on the AfCFTA, held in Nairobi, Kenya, to assess the progress and address critical aspects of the agreement’s implementation.

Held under the theme “The Role of the Private Sector in the Implementation of the AfCFTA: Own and Drive AfCFTA,” they discussed the outstanding Rules of Origin on Auto, Textiles and Clothing, estimated tariff revenue losses and the adjustment facility allocations. Additionally, proposals on front-loading trade liberalisation in primary agricultural products formed part of the discussions.

AfCFTA Secretary General Wamkele Mene said that the decision to prevent the trade of second-hand clothes was “an important step to encourage value-addition and industrialisation in Africa”. Backing the statements of other ministers, he reiterated that Africa should not be used as a dumping ground for used clothes coming from outside the continent. Furthermore, prohibiting these imports would protect the African textile industries and attract investment into the lucrative sector.

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How Africa became an apparels’ dumping site

For decades, Africa has been going through ‘waste colonialism or imperialism.’ Developed nations have  dominated African nations by exporting their unwanted or toxic waste, leading to pollution. The high cost of waste management and limited landfill space has made developed nations turn African countries into dumping sites.

Most used clothes from developed nations that ship to Africa end up in landfills. For instance, Kenya has become a dumping ground for fast fashion from the US and UK. A Clean Up Kenya and Wildlight for the Changing Markets Foundation report revealed that the European Union has been dumping 37 million items of plastic clothing in Kenya every year.

Clothes made from synthetic materials, including polyester, nylon and acrylic, take hundreds of years to decompose. After ending up in landfills, they release harmful greenhouse gases, contributing to the climate change crisis. The continent is already vulnerable to climate change, but it only aggravates the situation. Some companies seeking to dispose of this waste resort to burning, which releases toxic chemicals into the air and soil.

Previously, the EU was accused of contributing to this problem by exporting large quantities of fashion waste to Kenya. The Union later banned the export of hazardous waste to developing nations. However, the ban did not include textile waste. According to the report, up to 70 per cent of the clothes sold in Kenya’s second-hand markets come from EU countries.

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The prominence of Africa’s second-hand clothes market 

Across Africa, the second-hand clothing market goes by diverse names. They include ‘Mitumba’ in Kenya, ‘Madunusa’ in South Africa, ‘Okrika’ in Nigeria and ’ in Zambia. Data from Oxfam reveals that at least 70 per cent of apparel donated to charity in the US and UK are in Africa. Many African countries have struggled with the low consumption of locally produced textiles. This has persisted due to the high cost of locally made apparel instead of second-hand imports. Instead, local firms resort to exporting their goods.

Mordor Intelligence reveals that the African textile and garment industry has been booming over the last few years due to its vast potential for growth among manufacturing countries. The textile industry on the continent will grow at a Compound Annual Growth Rate (CAGR) of more than 4 per cent by 2027.

Data from Statista indicates that between 2011 and 2022, the US exported approximately $1B billion worth of used or second-hand merchandise to Africa. Moreover, in 2013, this figure amounted to around $1.98B.According to Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2022, second-hand clothing is more prevalent among Nigerians, with nearly 10 per cent reporting buying and selling used items at least once weekly.

Africa remains a prominent global producer of raw materials for textiles and garments, including cotton. Conversely, the continent ranks last in consumption of its fabrics. This because of a thriving second-hand clothing industry dominated by the US and China.

According to the African Development Bank Group (AfDB), the cotton value chain can create up to 600 per cent of value. This is from cotton production, spinning and twisting into yarn, weaving and knitting into the fabric, dyeing, printing and designing.

The East African region remains the least consumer of textiles manufactured within the continent. The region has adequate raw materials, skilled human resources, and capacity to produce cotton textiles and apparel. However, the region grapples with challenge of cheap second-hand imports. Interestingly,  the EAC passed a resolution in 2016 to phase out used clothes imports and encourage local production. EAC partner states have been unable to protect their apparel sector against cheap second-hand imports.

“The way forward is local content under the slogan ‘Buy African and Buy East African’. Mitumba is not sustainable. It is what we can manufacture to sustain us,” stated the EAC Secretary-General, Peter Mathuki. Kenya, Lesotho and Ethiopia are the leading exporters of textiles and apparel to the US under AGOA. However, importing raw materials hinders the development the local cotton and yarn sectors.

According to the Kenya Institute for Public Policy Research and Analysis (KIPPRA), 70 per cent of Kenyan apparel firms sell about four-fifths of their products to US markets. Furthermore, the Institute indicates that Kenyan textile mills consume an estimated 8,000 metric tonnes (41,200 bales) annually. The ideal demand to meet national requirements is 26,000 metric tonnes (140,000 bales). This shows the massive potential of the textile industry, which is curtailed by the undersupply of cotton. Kenya has become dependent on the import of second-hand clothes. According to the Kenya National Bureau of Statistics (KNBS), an estimated two million people work in the second-hand clothing industry, contributing over $83 million in taxes annually.

In Tanzania, the local textile manufacturing sector collapsed, leaving second-hand clothes to flood the market. Government data shows that Dar es Salaam spends an estimated $183 million annually to import second-hand clothes. China, the United Arab Emirates, India, Canada, America, the UK and South Korea represent the main import countries. The government scrapped import duty on raw materials for fabrics to attract more investments to bolster local production. The lack of investment and capital base has crippled production. Hence, governments should allocate funds to boost the cultivation of cotton.

To reap from the global cotton industry, cotton-growing countries, such as Ghana and Uganda, should develop more processing facilities, which could, in tandem, create more jobs. According to the African Development Bank Group (AfDB), the cotton value can create up to 600 per cent of value. This is from cotton production, spinning and twisting into yarn, weaving and knitting into the fabric, dyeing, printing and designing. Home-grown textile industries have the potential to flourish. However, Africa must first eliminate the competition from cheap second-hand clothes.

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