Mitumba Sector is a Key Revenue Earner for The National Government

The second-hand clothing industry produces employment opportunities, promotes environmentally responsible consumption, and generates revenues for national governments. These are among the main findings in the new report commissioned by the Mitumba Association of Kenya.

The “Global Production Networks of the Second-Hand Clothing Industry” report sought to investigate the economic, social, and environmental effects of the second-hand clothing sector (known as mitumba) in Kenya and the broader African continent.

It was released by the Mitumba Institute Research Centre (MIRC), a new research institute that focuses on the vitally important mitumba trade. It aimed at assessing the strategic importance of the global second-hand clothing industry for Africa and to make recommendations for the development of the second-hand clothing sector for the future.

At present, there is too much misunderstanding and misinformation regarding the role of the second-hand clothing sector, following successive attempts to shut down the industry altogether in certain countries.

Speaking during the launch, the Chair of Mitumba Association of Kenya, Teresia Njenga expressed her delight on the timeliness and importance of the findings.

“The report highlights the vital importance that mitumba has in producing employment opportunities, promoting environmentally responsible consumption, and generating revenue for governments,” she said.

Kenya is today the fourth-largest apparel exporter in Africa. The sector contributes 7 percent to the country’s net export earnings. Today, Kenya is the largest exporter of apparel under AGOA with about USD 600 million worth of exports in 2017.

According to a recent household analysis, most households buy new clothes when they are required, such as for school or workplace uniforms. 91.5 percent of households purchase second-hand clothing worth less than 1000 shillings, while 8.5 percent purchase second-hand clothing worth more than 1000 shillings. 74.5 percent of all households purchased new clothing for less than 1000 shillings, while 25.5 percent purchased new clothing for more than 1000 shillings. This goes to demonstrate the price sensitivity of second-hand clothing products.

ALSO READ: MIRC to Release Mitumba Sector Report Highlighting Its Economic Role

In 2021, Mitumba Consortium through the Institute of Economic Affairs released its first report which showed that the mitumba sector employs 2 million people, directly and a further 6.2 million households and up to 24 million Kenyans livelihoods depend on it.

The report further indicated that the sector contributes to the economy in taxes, the sector contributes in excess of 12 billion shillings to the exchequer every year. This is not to mention the multiplier effect supporting tens of other industries such as logistics, clearing and forwarding, insurance, security among others.

“Undoubtedly, mitumba confers a myriad of benefits to the Kenyan economy. These benefits would be enhanced if further sorting centres could be opened, improving the efficiency of the supply chain in second-hand clothing. For that to happen, policy-makers must follow an approach that is beneficial for the sector,” added Ms. Njenga.

Mitumba Market in Africa

Mitumba is an important topic across much of Africa, but rarely the subject of important academic thinking. The report shows how important the second-hand clothing sector is for the economic well-being of citizens in Africa in general, and Kenya in particular, whilst not impacting the domestic production of clothing.

Statistics show that the scale of international wholesale trade in second-hand garments is estimated to be between 2 and 4 million tons of used items traded per year and is increasing exponentially. The annual value of the trade was reported in 2016 to be between USD 1.5 billion and USD 3.4 billion and is estimated at over USD 8.0 billion currently.

At present only 20 percent of post-consumer garments are actually collected for reuse. Of these, approximately 40 percent end up in the second-hand clothing market – either sold through a charity shop in the same country as the donation was made or in the international second-hand clothing market.

As such, the scope to increase reuse and expand the second-hand clothing market is enormous. Doing so is likely to yield significant global and local environmental benefits.

Incidentally, Africa has one of the largest used clothing markets in the world. It is believed that four-fifths of those on the continent wear second-hand clothes, mainly imported from the USA, Europe, India and Pakistan. The global environmental benefit of such reuse is considerable.

A significant body of authoritative research links the relative decline of the manufacturing of clothing in Africa to the liberalization of the textiles sector through exposure to international markets, rather than an increase in the size of the second-hand clothing sector.

Therefore, it is very unlikely that measures to undermine the second-hand clothing industry would lead to any revival in the domestic production sector for textiles.

Unfortunately, the increasing flow of cheap ‘fast fashion’ products from Asia into Africa is likely to continue to undermine African domestic manufacturing of clothing, with negative consequences for employment and GDP.

Nevertheless, the second-hand clothing industry is likely to remain a continuing source of employment, tax revenues and wealth creation as long as national governments provide a competitive operating environment that is conducive to the sector’s long-term development.

Recommendations for the Sustenance of Mitumba Sector

It is well known that the clothing industry as a whole is having a negative impact on the global environment through increased emissions and energy use with damaging repercussions for climate change.

By the simple act of reusing clothing that has already been produced, the second-hand sector has the potential to make a significant contribution to climate change risk mitigation while reducing environmental harm.

As such, Africa requires a more effective regulation of supply chains for second-hand clothing, which would include an expansion of sorting centres at key strategic trading hubs such as Kenya. Such facilities will help realize Kenya’s goal of becoming among the leading high-value, high-wage, high-skill economies in Africa.

It is estimated each facility will directly create up to 500 jobs with further employment in related sectors. If all second-hand clothes were sorted in Kenya rather than abroad, Kenya would gain up to 14,000 additional jobs.

“The key point, confirmed by economic analysis, is that open product market competition is likely to expand and promote both parts of the sector. A healthy, dynamic market in the production of clothing and apparel will strengthen Kenyan manufacturing without being undermined by the second-hand clothing sector,” noted Ms. Njenga.

The report recommends that policy adoption should focus on opening up opportunities for trade that benefits both businesses and consumers. African nations would benefit from taking control of the industry through effective policy-making and regulation which opens up the opportunity for trade – both imports and exports – generating increased economic benefit for local citizens and the finances of national governments.

A sorting facility will allow Kenya to export clothing to high-demand markets in the US and Europe where there is growing consumer resistance to ‘fast fashion’, enabling Kenya to acquire foreign currency while reducing the country’s trade deficit.

Policy-makers must move away from treating the expansion of domestic textile production and the growth of the second-hand clothing industry as a zero-sum game where gains for one sector mean losses for the other.

Similarly, policies that encourage the growth of businesses for the full processing of clothing and discarded textile materials would help increase the rate of recycling, with the benefits of job creation, economic growth, and environmental sustainability.

Kenya’s strategy should be to leverage agglomeration effects, using regulatory policy to build up its cluster of textile producers alongside second-hand clothing operators, creating capacity for long-term innovation and growth.

It is, therefore, imperative that Kenya sees long-term growth and development strategies that factor in the increased global demand for second-hand clothing, as environmentally conscious consumers seek more reused products.

“What domestic manufacturing in textiles requires, above all, is sustained capital investment in plant and machinery, strong national infrastructure, and effective skills policies. The danger of protectionist measures is that they undermine competition across all sectors, weakening domestic production,” concluded Ms. Njenga.