AGOA at risk in East African war over used clothes

“Why should our people continue wearing ‘dead people’s clothes’ when we grow cotton and have got our on factories?  Is it fair? It is not. We can trade in many other things but not in used clothes.”

He said any business person interested in selling clothes in Uganda and the region, should instead focus on importing new garments.

He added that the new clothes are expensive but the governments in the region are interested in promoting cotton growing in the bloc and increase household incomes of the citizens who will eventually afford new clothes.

Recently, Rwanda’s President Paul Kagame stated that his country will proceed with the ban on used clothes despite of threats by the US to review trade benefits to the three EAC countries.

“This is the choice we find that we have to make. As far as I am concerned, making the choice is simple, we might suffer consequences. Even when confronted with difficult choices, there is always a way,” he said after officially applying to run for a third term in office, whose election is slated next month.

“Rwanda and other countries in the region that are part of AGOA, have to do other things, we have to grow and establish our industries,” Kagame added.

Tanzania’s Deputy Minister for Foreign Affairs and East African Cooperation, Susan Kolimba told a local daily that the future of the community is bright.

“Differing is common in any group. The good thing about our community is that we have a room for discuss issues, which we have differed from, until we reach a consensus,” she told The Citizen.

Tanzania Private Sector Foundation’s (TPSF) Executive Director Godfrey Simbeye said any decision taken by the US will have a  little effect on the country’s economy since there are few industries i that are taking advantage of the market.

US AGOA imports from Rwanda, Tanzania, and Uganda totaled $43 million in 2016, up from $33 million in 2015, according to the USTR.

On the other hand, US exports to Rwanda, Tanzania, and Uganda were $281 million in 2016, up from $257 million the year before, most of which consists of used clothes.

A research carried out by a trade law and policy analyst, Esther Katende-Magezi, dubbed ‘The impact of second hand clothes and shoes in East Africa’ published by the Geneva based CUTS International this year, shows that cotton produced in the EAC is spun and woven in Asia, converted into apparels and shipped to USA and EU to be worn for 2-3 years and shipped back to Africa (EAC) as used clothing, to clothe up to 70% of African population.

In Africa, the EAC is one of the biggest importers of second hand clothes from US, UK and China. In 2013, the EAC total percentage of global used clothes trade amounted to 8%, with 3 % for Kenya, 1.9% for Uganda, 1.9 % for Tanzania, 0.6 % t for Rwanda and 0.2 % for Burundi.

This is the main reason that spinners have consistently expressed concern that there is low demand for fabric because the EAC fabric market is choked with imported second hand clothes which has also led to the closure of several textiles mills that were, for example, performing well in Kenya and Uganda such as Raymond, KIKOM, Mulco, African Textile Mills, Rayon Textiles, and Lira Spinning Mill leading to loss of millions of jobs.

Magezi notes that while the decision could boost the cotton, apparel, textile and leather sectors and ultimately enhance employment a rising from industrialization, the governments could also experience significant losses in tax revenue.

For example, Kenya collected $54 million in tariff revenue on 100,000 tons of imported used clothing in 2013. In 2016, Rwanda nearly tripled its import duty on imported clothing from 35 % to 100 % to encourage purchases from the country’s limited textile mills.

Also, the banning used clothes imports could lead to smuggling of the banned clothing into the EAC countries, especially in the short run due to shortage and the limited ability to afford brand new garments.

“Smuggling would not only promote illicit trade and deny the governments’ tax revenue but also put a higher burden on governments to address smuggling. Further, enforcement of the ban could be at a cost to the governments that would have to put in place measures to implement the ban in the different states,” she said.

How other countries are handling the issue of secondhand clothes

In South Africa, importation of used clothes has been banned. Outside the continent, countries such as India have embraced their cultural attire which is manufactured/ designed locally and therefore reduces demand for second hand cloth imports.

However, using this strategy in EAC would be a challenge given the absence of widely accepted cultural attire and the popularity of Western fashion in the Partner States.

On the other hand, developed countries have focused on improving the competitiveness of their local textile industries and the incomes of their citizens to discourage importation of second hand clothes.

“And they have done this, not overnight, but the industry has been built and developed over the years and in some cases, through family generations, where it is now paying off highly,” she says.