Liam Taylor

Uganda-based journalism

Good as new

East African governments want to stop people buying second-hand clothes. Easier said than done. 

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Second-hand clothes in Owino market, Kampala

‘It’s bad for me, but it’s good for the country’, says Ivan, a second-hand clothes trader in Kampala. He is musing on a new plan, announced by the East African Community (EAC), to stop the import of used clothing and shoes. Ivan is perched on top of a pile of dresses in Owino Market, a warren of corrugated iron that is the heart of Uganda’s used clothes trade. The proposed ban would put thousands of traders here out of business.

The new policy, to be phased in over three years, was agreed at a recent EAC summit by the leaders of Burundi, Kenya, Rwanda, Tanzania and Uganda. They say that cheap used clothes have flooded the market, destroying the local textile industry. Statistics are hard to come by, but a decade ago the Uganda Manufacturers Association estimated that 81% of garment purchases in Uganda were second-hand.

Ivan is philosophical. The policy could help manufacturers, he says. But he has too little capital to start trading new clothes himself. He typically buys a bale of second-hand dresses for 1.8 million Ugandan shillings ($540), selling the best ones for Ush30,000 ($9) a piece, and the cheapest at under Ush10,000 ($3). He is coy about his profits, but other traders say they make Ush200,000 ($60) in a fortnight.

Quality varies. It’s a risk, shrugs Ivan. Sometimes the dresses have holes or burns. But many are still in good condition. ‘Why do people give these clothes?’ Ivan wonders. ‘We hear they come from dead people.’

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Bales of second-hand clothes in a Kampala warehouse

Bales in

The used clothing trade is big business. In 2014, according to UN figures, the US exported $709 million of second-hand clothes, and the European Union $1,536 million. Most items originate as donations, intended for re-sale by local charity shops. But in wealthy countries the supply of second-hand clothing far outstrips demand. Many charities sell on their donations to trading companies, who export them: in the UK, for example, roughly 70% of donated clothes are sent abroad.

Some go to eastern Europe, others to south Asia. But many end up in Africa, transported at low cost in spare shipping containers (in 2012 it cost £6,000 to send a container of cocoa or timber from West Africa to Europe, but only £2,000 for clothes going the other way). In Uganda, 80,000 tonnes of used clothing were imported in 2014, with a value of $70 million.

Imports

Source: UN Comtrade statistics. No bar indicates missing data for that country and year.

Just outside Owino Market is a string of warehouses, owned by wholesale importers. ‘I’ve been here a year,’ says Gulsher Burki, from Pakistan, surrounded by bales of clothing. He works for a wholesale importer that buys used clothing from America. Most of the clothes are sold in Pakistan; what can’t be sold there is re-exported to Africa. That means lots of short skirts and strappy tops, says Gulsher.

Other wholesalers say they get their clothes from Canada and Europe, while some are exploring new sources. ‘Fred’ (he didn’t want his real name to be used) has been a wholesale trader for fifteen years. Four years ago he also started importing from China. He is not alone: the amount of used clothes that Uganda imports from the Middle Kingdom increased twelve-fold between 2009 and 2014.

Wholesalers operate in international markets, and have been hard hit by the strengthening dollar. Transport also eats into profits. Fred says it costs about $3,500 to ship a container from the Far East to the port of Mombasa, in Kenya – but a further $4,000 to truck it overland to Kampala. Import duties are another burden.

Small traders like Ivan come to these warehouses to buy their stock, sorting the goods by quality into first, second and third class. But not all the clothes are sold in Kampala. Traders from all over Uganda come here, taking back small bundles to their villages. Others come from further afield: Fred estimates that 30-40% of his stock goes abroad, to South Sudan, Rwanda, and the Democratic Republic of Congo.

It is a complex chain, with many people taking a cut. Along the way a gift is transformed into a commodity, argues Andrew Brooks, a geographer at King’s College, London, in his book Clothing Poverty. But the Owino traders spot clues to the origins of their wares. Sometimes they find strange labels on the clothes, with two simple words: ‘For charity’.

If at first you don’t succeed

All this will be gone if the EAC’s ban is implemented. East African leaders, like Uganda’s President Yoweri Museveni, see textiles as the first step on a well-worn path to industrialisation, familiar from the cotton mills of nineteenth-century Manchester to the sweatshops of contemporary East Asia.

Domestic clothes making could also stimulate local cotton production. Uganda was once the leading cotton producer in Africa, but output collapsed under Idi Amin’s dictatorship (see chart, below); many farmers in Uganda’s fertile central region now find it more profitable to grow coffee or bananas. Most of Uganda’s cotton is exported in raw, unprocessed form – meaning that most of the profits get captured elsewhere.

Cotton production

Previous attempts to build a textiles industry have flopped. Several firms were set up in the early 2000s to take advantage of the African Growth and Opportunity Act (Agoa), a US policy that gives African producers duty-free access to American markets. A Sri Lankan company, Tri-Star Apparel, brought 1,500 village women to work in its shiny new factory in Kampala; it collapsed in 2006, despite hefty government support. Another state-backed firm, Phoenix Logistics, had lost Ush21 billion ($6.25 million) since its founding, a minister admitted in 2014.

A few firms limp along, producing the clothes that can’t be bought second-hand: uniforms for schoolchildren, health workers and the army. Even that business may be going. One factory laid off 600 employees last year after the government started importing army uniforms from China instead. Such is the state of the industry that when Fine Spinners, a new venture, sent its first delivery of t-shirts to Denmark last month, President Museveni broke off from election campaigning to wave the consignment off.

The manufacturers blame second-hand imports for their woes. Not without cause: a 2008 paper by Garth Frazer, an economist at the University of Toronto, estimated that such imports account for 40% of the decline in apparel and textile production in an average African country. Uganda is far from the worst hit. In Ghana, textile and clothing employment fell by 80% from 1975 to 2000. Policymakers worry about the ‘deindustrialisation’ of the continent.

But are second-hand clothes really the culprit? Trade statistics are unreliable, calling Frazer’s estimate into question. A more important factor, perhaps, was the economic reforms that African countries underwent in the 1980s and 1990s. Trade liberalization opened up protected industries to international competition, especially from Asia. And that competition has intensified since 2005, when Western countries finally phased out the Multi Fibre Agreement, a protectionist measure targeted at Asian manufacturers.

In the contest between Asian and African textiles, there is only one winner. Asian producers are more efficient, thank to superior machinery, cheaper electricity, and better transport links. Ugandan imports of new clothing were worth $48 million in 2014, with 60% coming from China. That is less, admittedly, than the $70 million of used clothes that were imported that year. But if Uganda wants to move beyond the domestic market, and export to the world, it will need to compete with Asian products.

A first step for African countries should be getting their infrastructure up to scratch, argues Linda Calabrese of the Overseas Development Institute, a UK think tank – a better approach than the ban, which she says would hurt poorer consumers. She also suggests more targeted industrial policy, such as export incentives for firms trading internationally.

These ideas would find backing from Fred, the wholesaler. Sitting on a bale in his warehouse, he lays out the arguments with the panache of a seasoned debater. The government and manufacturers ‘failed miserably’ to take advantage of Agoa, he says. Banning second-hand clothing wouldn’t make a new textile industry just spring up in its place. ‘You don’t wake up and just start putting bricks on the sand,’ he says. ‘You lay the foundation first.’

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Clothes in Owino

Hard sell

There are other reasons to think that a ban would not work. Ugandans come to Owino Market not only for cheap prices, but also for high quality. Second-hand clothes from the West are more durable than either locally-made garments or lower-end Chinese imports. Some canny traders even try to pass off new clothes as European cast-offs, wrinkling them and soaking them with old rags to create a second-hand smell.

Robust demand for used clothes would make any ban difficult to enforce. Other countries have tried it and failed. South Africa imposed import restrictions on used clothing, only for huge volumes to be smuggled through Mozambique. Small traders can hop across the border with suitcases, passing off the contents as their own personal wardrobe.

Imposing a ban would also be a political risk. Many poor Ugandans rely on markets like Owino; they simply can’t afford to buy new clothes. And there is a combustible relationship between traders and urban authorities in Kampala’s city centre, entangled with national-level tensions over Museveni’s recent re-election.

On a busy day in Owino, there is little time to think about the future. But the people here have their own response to the politicians. ‘Uganda is a Third World country,’ says Benson, a trader, crouched beneath a rack of shirts. ‘People are poor, people don’t have jobs. If they stop us selling these clothes, it will be by force.’

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This entry was posted on March 16, 2016 by in Development and tagged , , .
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