Africa East African Community Economy Import Trade

Africa wiggles out of used clothes AGOA deal

In Africa’s metropolises, you don’t have to be rich to wear Gucci, Armani or Prada, no sir, it is commonplace to see women in the slums carrying Dolce Gabbana handbags.

In fact there is a prominent saying across most all of Africa’s urban centres like Dar es Salaam and Nairobi “…everyone looks good in mtumba.”

Mtumba, is Swahili slang for second hand clothes, and Africa is one of the world’s leading importers of second hands, from caps, t-shirts and shirts, to pants and shorts all the way to bras and women underwear, yes second hand bras and underway are big business.

‘East Africa imported US$151M worth of used clothes and shoes in 2015, mostly from Europe and the U.S.’ And ‘At least 70 percent of donated garments end up in Africa’ – Oxfam.

What is strange here is that, Africa does not want to import these used items but they are forced to! And the trade war has been going on for years.

Also read: East Africa maintains strong economic growth

In the most recent scuffle, March 2017, “the Office of the United States Trade Representative threatened to remove four of the six East African countries included in the Africa Growth and Opportunity Act.”

The Africa Growth and Opportunity Act, or more commonly AGOA pact is a preferential trade deal intended to lift trade and economic growth across sub-Saharan Africa.

Key words to note here are “…lift trade and economic growth.” This is one of those times Africa finds itself locked in a deal because they did not read between the lines or weigh the opportunity cost of the pact before signing it.

When most all East African countries entered into the AGOA pact, they probably thought it would indeed help improve trade between them and the US. What they did not consider is that in just a few years to come, they too would want to move from consumers of final products, like clothes, and become producers, after all, they have all the raw material.

So now, countries like Kenya and Tanzania that have just been christened middle-income economies are all vying to industrialize and the textile industry is a huge sector to boost industrialization.

However, when your immediate market is not so wealthy and your competition can afford to offer cheaper options, that are of better quality and of big brand names, used or not, your market will go for mtumba rather than your brand-less option.

‘East Africa could export garments worth up to US$3B annually within a decade, according to a McKinsey study.’

These fast growing East African economies were quick to acknowledge that and so they immediately moved to cut importation of used clothes. The idea is simple, kill off the competition to boost domestic production.

Well, US traders were not very happy with the move, why would they, they were now losing a market of over 100 million people. So they petitioned for counter action, it worked.

In June of 2017 the U.S. initiated a review of AGOA eligibility for Tanzania, Uganda and Rwanda. The message was simple, lift the ban on used clothes or lose the AGOA trade deal.

The petition was been pushed by the U.S. Secondary Materials and Recycled Textiles Association, which had no qualms pointing out bluntly that ‘…the move to curb incoming used clothing is a barrier to U.S. trade, which goes against certain requirements under AGOA.’

The certain requirements is just a nice way of phrasing an AGOA pact clause that states there would be no “barriers to U.S. trade.”

It was then reported that ‘SMART, a group of 40 used clothing exporters, says that 40,000 American jobs, like sorting and packing clothes, are at risk.’

The report, published in the New York Times article titled ‘For dignity and development’ the US traders went on to say, the export of used clothes to Africa cannot be stopped because, well, they have nowhere else to take them.

Clothing thrown away by Americans, the association says, will end up in landfills in the U.S. and damage the environment if not sold abroad. – SMART

Covid-19 and import of used clothes

Well, AGOA may have forced East Africa to continue importing used clothes but with a new global threat, Covid-19, Africa may just have found some wiggle room.

Kenya for example, recently said it cannot lift its ban on the importation of second-hand clothes because they are simply following the health safety protocol of Covid-19.

“Currently, Mitumba imports from countries that are facing the Covid-19 pandemic are restricted. The protocols in place restrict importation of second-hand clothes from virus prone countries. We are only trying to comply with that protocol.” Media quoted the country’s Cabinet Secretary for Industry, Trade and Enterprise Development, Betty Maina.

Notably, Kenya imports second-hand clothes from China, the US and Europe and as per the protocol, these are the very areas where the pandemic is at its worst.

So what happens now, well, before they start petitioning and waiving the AGOA pact threat, Kenya’ Cabinet Secretary has some advice; “I advised them to develop protocols for dealing with used clothes in the context of the pandemic.”

Source: The Exchange

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: