Mitumba Supports 3.4 Million Jobs And Contributes $419 USD In Income Duties And Taxes To The EAC
KEY POINTS
The contribution of the used clothing and footwear industry to the economic growth and employment performance of the EAC is vast. We estimate that the SHC industry supports up to 3.4 million jobs throughout the supply chain in East Africa.
A new report commissioned by the Mitumba Consortium Association of Kenya on the Second-Hand Clothing Industry in the East Africa Community has warned that countries must avoid protectionism against the import of second-hand clothing.
This report comes as trade ministers converge in Kenya this week for the 54th All-Africa Trade Ministers meeting of the African Continental Free Trade Area (AfCFTA), where the origin of textiles is set to be discussed.
The report, launched on the 10th of July in Kenya and written by Professor Patrick Diamond of Queen Mary University, London, states that any restrictions would violate trade agreements, particularly with the WTO and United States.
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The report also shows that a policy approach in which governments focus on proactively expanding state of the art sorting-facilities while boosting skills and entrepreneurship is far more likely to deliver growth and jobs in the future.
Of particular interest to the EAC, the paper argues that the new domestic textile production industry and the second-hand clothes (SHC) industry can and should work together, for the mutual benefit and growth of both sectors.
National governments should shape policies that boost SHC businesses in EAC member-states, rather than pursuing protectionist industrial policies unlikely to benefit workers or consumers.
The contribution of the used clothing and footwear industry to the economic growth and employment performance of the EAC is vast. We estimate that the SHC industry supports up to 3.4 million jobs throughout the supply chain in East Africa.
Moreover, the sector delivered government revenues estimated at US$419 million in 2021 across East Africa through taxing consumption and incomes associated with SHC. Moreover, SHC generates competition that helps to incentivize technological innovation throughout the textile production sector.
At the same time, the used clothing industry is helping to put East Africa and the world on the path toward a more sustainable, circular economy.
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Although the EAC elected not to prohibit used clothing imports in 2016-17, there are still concerns that EAC states will seek to restrict the importation of SHC. Strategic blueprints such as ‘Vision 2050’ imply EAC member countries still want to reduce their dependence on second-hand clothes to revitalize domestic textile production and spur the growth of the new middle class.
There is still widespread misunderstanding of the SHC industry and its impact in East Africa. The report argues that weakening the used clothing sector in the EAC would merely benefit the cheap garments trade in China. There is little doubt that China is a serious competitor in domestic supply chains.
Yet there is little evidence to support the claim that SHC importation weakens the domestic production of textiles. Moreover, we know that in general, consumers in the EAC region are not in favor of restrictions. They welcome the general quality and affordability of used clothing and are often skeptical about new clothes produced in their countries.
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Teresia Wairumu, MCAK chairperson said: “I am pleased to launch our latest rep