Global trade in used clothes has grown steadily in the last 20 years, being accelerated as the fast fashion and the consumer cycles in Occident has been accelerating too. The East Africa Community (EAC) imported $151 million worth of used clothes in 2015, mostly from North America and Europe, where consumers buy new clothes regularly to substitute unwanted ítems, usually cause by changes in trends. The most common destination of these unwanted cothes is donations to NGOs. According to Oxfam, 70% of donated garments end up in African markets.
Zimbabwe banned imports of second hand goods in 2015 and the EAC initiated their policies to ban secondhand clothing imports too in 2016. Rwanda has been an early adopter, when it raised taxes in 2016. Tanzania and Uganda commited to continue to raise taxes on second hand clothing imports, followed by Kenya for the ban to take full effect in 2019. These countries share the goal to protect the development of domestic textile industries with these measures.
Is it the right solution?
While the protective taxes aim at shielding the development of domestic industries, there might be a transition period to locally produced but expensive goods. The ban can cause a demand problem for East Africans with lower incomes, who usually demand the second hand clothes and might have to choose between buying new imported goods or buying domestically produced garments at higher prices.
While some importers are looking at new productions from manufacturers in Asia or Turkey, some have found the business solution in the clothing stocks markets. Stock collections allow wholesalers and retailers to import quality clothing which complies with the EU standards and also complies with the ban on second hand clothes import, as the stock clothing is new and has never been used. These stock collections offer higher quality and enter the market at comptetive and affordable prices, with brands being well known and attractive for a growing middle class in the region too.
The way forward
Fashion stocks are a solution to importing new clothing at competitive prices, but there is room for improvement.
To promote the fashion industry in East Africa, the policies should focus on reducing the manufacturing costs, so local factories can produce at a profit with a package of “industrial policies”, with successful examples of its implementations found in East Asia Tigers.
These efforts will eliminate the need for banning imports of substitutes. The countries can produce while importing new season garments, stocks garments, or second hand clothing. Participating in international trade can help these countries develop international competitiveness standards to compete in domestic economies and grow their exports.
Before the ban’s full effect in 2019, the leaders of EAC met to discuss the repercussions and decided not to move forward with the ban as the consequences would come at a higher prices, with the exception of Rwanda. Zimbabwe implemented the second-hand clothing ban in 2015 and also eased the ban in 2017. Open economies promote global competitiveness and brings a wide range of offers for different targets in the markets.