Second hand Industry in Africa and its trade with the US.
The second hand clothing industry in Africa is a million dollar business. Ghana, Nigeria, Ivory Coast, Tanzania, Benin, Uganda and Kenya are among the biggest markets for second hand clothes.
Kenya alone imports about 100,000 tonnes of secondhand clothes a year, providing the government revenues from customs duties and creating tens of thousands of jobs. It also offers quality clothes to Kenyans, many of whom earn less in a month what a pair of new Ralph Lauren khakis costs in the West.
Africa produces close to 10% of the world’s cotton, and in the 1980s, many African countries had growing textile industries. Between the rise of Asian manufacturing and Western second-hand clothing imports over the past few decades though, many of the African clothing and textile businesses just couldn’t keep up.
Second Hand Industry
The United States is the world's largest exporter, this means consumerism. And Africa is the largest importing region in an international trade that has grown rapidly since the late 1980s.
The EPA - Environmental Protection Agency - reports that US citizens generate 16 million tons of textile waste a year.
On average, 700,000 tons of used clothing gets exported overseas.
2.5 million tons of clothing are recycled.
Over three million tons are incinerated.
10 million tons get sent to landfills.
Goodwill, an American nonprofit 501(c)(3) organization that provides job training, employment placement services, and other community-based programs for people who have barriers preventing them from otherwise obtaining a job. Additionally, Goodwill Industries may hire veterans and individuals who lack education or job experience or face employment challenges. Goodwill is funded by a massive network of retail thrift stores which operate as nonprofits as well. Goodwill operates as a network of independent, community-based organizations in South Korea, Venezuela, Brazil, Mexico, Panama, Uruguay, the United States, Canada, and 8 other countries, with 162 local Goodwills in the United States and Canada.
In 2018, local Goodwill organizations diverted 4 billion pounds of usable goods from landfills.
Second Hand Clothing Industry in Africa.
While the clothing comes from across the globe, including Europe and China, most originates from the United States.
According to USAID - United States Agency for International Development, the industry employs more than 355,000 people in East Africa, supporting the livelihoods of 1.4 million people.
But it is also seen as one of the primary reasons local textile industries collapsed in the 1980s and 1990s.While you’ll still find people wearing traditional fabrics, like the kanga and kitenge, as well as seamstresses and tailors in every community, it’s hard to compete with the rock-bottom prices of a second-hand shirt. Most people only wear locally-made traditional designs or textiles for special occasions, and wear cheap used clothing for everything else.
In a bid to resuscitate local manufacturing, East African governments, including those of Kenya, Tanzania, Uganda and Rwanda, agreed in March 2016 to increase tariffs on imported used clothes with the intention of phasing them out by 2019.
In the 2016/2017 financial year, Rwanda raised the tax on imported used clothes from $0.20 to $2.50 per kilo and to $4 in the next financial year.
The US has repeatedly warned that should the East African community go ahead with implementing import taxes and eventually banning used clothes, they would lose the benefits of the African Growth and Opportunity Act (AGOA), which allows African countries to export certain items to the US without paying duties.
Tanzania, Uganda and Kenya in 2017 separately retreated from the pact to increase import taxes and ban used clothing. But Rwanda refused to join them.
In July 2018, the Trump administration partially suspended Rwanda from the AGOA, effectively taking away the country's right to export clothing tax-free to the US.
Used-clothing exports from the U.S. to all EAC countries combined had an all-time peak of US$43 million in 2012, which is 0.003 of a cent of American exports. This is a truly negligible industry from the American perspective. Its trifling economic value is not surprising as this industry essentially takes items that might otherwise go to the garbage and ships them to Africa.
East African Community is an intergovernmental organization composed of six countries in the African Great Lakes region in eastern Africa: Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. EAC is a regional trade agreement similar to NAFTA.
In doing so, Rwanda joined a legion of others, including Canada, the European Union and China, in facing off with Trump's increasingly belligerent trade policies.
According to the Rwanda Development Board, the decision to tax used clothing has already helped develop the local textile and shoe industries. Production increased from $59.5million in 2015 to $70.6 million in 2017.
In countries like South Africa, bans on used clothing have not been able to save the textile and garment industry from being washed away by cheap Chinese imports.
"In Africa, the average spindle speed is about 10.000 rounds per minute. That same spindle in China is running at 20.000 rounds per minute. That means the Chinese or the Indian spindle is producing twice as much,” explains Jas Bedi, a Kenyan businessman who also sits on the board of the African Cotton and Textile Industries Federation (ACTIF). Moreover, explains Bedi, energy costs in Africa are almost twice as high as in China or India. When you calculate your costs and benefits, he says, “you are actually four times worse off: your cost is double and your production is half." DW.Com
The government of Rwanda is not unaware of the challenges and is trying to bring down the cost of production. Government has removed import duties for fabric brought in by clothing manufacturers.
The environmental cost
Now with fast fashion and Africa receiving clothes of very low quality, those clothes that used to be of a certain quality, are now basically ready to be dumped.
The amount of clothes that are disposable is causing grave environmental problems for African countries.
What also can be a big motivator for the US to impose these tariffs pushing African countries to receive their second hand clothes is that to dispose of them can be very costly, not only financially but also environmentally. Which is short sighted because what affects the environment in Africa, affects the whole world.
It typically costs $45 per ton to dispose of textiles, equaling hundreds of millions of dollars per year, showing a clear economic case also to reduce waste.
Back to China
Chinese exports to Africa have reached about $103 billion (€87 billion) in 2015, while the US exports to Africa amounted to only $27 billion (€ 23 billion) the same year.
In 2018, the growth rate of China’s trade with Africa was the highest in the world. According to the Ministry of Commerce People’s Republic of China.
Is Africa becoming the new China?
China, for instance, has seen a sharp rise in workers' wages, which are far above African levels. Additionally, Africa's population is on the rise. "In 2040, Africa will have 1.2 billion people of working age. That's going to be bigger than India, bigger than China,” “If that labor pool is not managed, not only will Africa be unstable, the whole world will be unstable." Reported DW.Com
African Growth & Opportunity Act
Ministry of Commerce People’s Republic of China
Photos from ShutterStock
Carolina Chavez clothes: Blazer from Goodwill, White T-shirt from Everlane.