East African Community member states are divided on whether to implement the ban on importation of used clothes and leather products, amid concerns that individual countries’ interests are overriding regional policies.
Burundi, Uganda, Kenya, Rwanda and Tanzania agreed in 2016 to ban the importation of secondhand clothes and leather products and restrict the use of old vehicles in the region by 2018, in order to boost their industrialisation programmes.
But one year on, Kenya has signalled that it will not respect the 2018 deadline on the grounds that it lacks the capacity to meet both the domestic and export demand for textiles.
The decision has sparked criticism, with Dr Mukhisa Kituyi, Secretary-General of the United Nations Conference on Trade and Development, the UN body dealing with trade, investment and development, saying it is ill-advised.
The Secondary Materials and Recycled Textiles Association (Smart), a US industry association representing used clothing businesses, filed a petition with the USTR on March 21, saying the ban was undesirable.
The US imported more than $1 billions worth of textiles and apparel from sub-Saharan Africa under Agoa in 2015, according to available data.
Bowing to pressure
Observers say that Kenya is bowing to pressure by lobbyists who petitioned the US Trade Representative (USTR) to cancel the Africa Growth and Opportunity Act (Agoa) pact with East African states for proposing to ban the importation of used clothes, a multimillion-dollar business.
In its petition, Smart called for an out-of-cycle review on Kenya, Rwanda, Tanzania and Uganda’s eligibility for Agoa in view of the ban. It said the US’s used clothing exports to the EAC averaged $24 million a year while indirect exports from Canada, India, UAE, Pakistan, Honduras and Mexico were worth $100 million. The six import used clothes from the US, process them and re-export to East Africa.
“When taking into account both direct and indirect shipments, the total amount is $124 million, or about 22 per cent of the US industry’s total exports each year. We believe that as many as 40 US used clothing exporters are directly involved in trade with the EAC,” said Andrea Lynn, marketing communications manager at Fallston Group, which handles media enquiries for Smart.
“As we work to increase market access for the EAC, we remain concerned by recent trade policy developments that we believe are a step in the wrong direction,” said Neda A. Brown, a public affairs officer at the US embassy in Kigali.
In Uganda, the executive director of the Private Sector Foundation, Gideon Badagawa, has proposed an extension of the ban deadline for three years, saying that Kampala has not built enough capacity to serve the local market.
“We have Southern Range Nyanza and other garment factories that produce largely school uniforms. The country basically depends on imported clothes,” said Mr Badagawa.
It is estimated that Ugandans spend $888 million annually on textile imports.
In the region, only Rwanda has expressed readiness to implement the ban, even as the country’s textile factories, Utexrwa and C&H Garment Factory, struggle to meet demand.
Rwanda raised taxes on used clothes and leather products to discourage imports, a move that has resulted in the closure of many businesses. Currently, Kigali is financing co-operatives to venture into garment making.
In the 2016/17 budget, the government increased taxes on used clothes by 1,250 per cent, from $0.2 per kilogramme to $2.5 per kilogramme. The government also increased taxes on used shoes by 1,000 per cent, from $0.5 per kg to $5 per kg, putting the items out of the reach of low-income earners.
Pro-ban lobbyists insist that the EAC should not bow to pressure from international lobbies, saying that individual country interests should not override regional initiatives meant to create jobs and spur economic development.
The region sees a robust manufacturing sector as key to attaining middle-income status, but its contribution to GDP is estimated at 10 per cent.
Lilian Awinja, chief executive of the East African Business Council said that between 2000 and 2017, EAC partner states, save for Tanzania, have seen a shrinkage in the share of manufacturing sector to GDP. Ms Awinja said the region targets to boost the contribution to 25 per cent by 2032 for employment creation, poverty reduction and technological advancement.