The U.S has made a fresh call for the East African Community not to phase out imported used clothes and leather products locally known as “Chagua”, but Rwanda says the U.S should not shift goals on what was agreed by the parties in 2015 when the African Growth and Opportunity Act (AGOA), pact was renewed.
How it all started
In 2015, the East African Community (EAC) Heads of State adopted a three-year gradual process to phase out the importation of second-hand clothes and footwear to promote textile, apparel and leather industries in the region and instead focus on evolving domestic industries.
This move, was deemed to make EAC textile and leather factories self-sufficient to serve the local and international markets, including AGOA market which had kept the window wide open for African exports into the American market same year.
Despite Kenya rescinding on the decision at a later stage, Rwanda, Uganda and Tanzania have remained “solid” on their stance to phase-out second hand clothing.
The government of Rwanda deliberated on a strategy to develop the textiles, apparel and leather industrial sectors and a blueprint was consequently designed on how to implement such a strategy.
A draft 2017-2019 strategy for the transformation of textiles, apparel and leather industrial sectors aim to increase the quality and quantity of textile, apparel and leather for both local and foreign markets.
Rwanda’s strategy estimated that, if everything is implemented, this could create 25,655 jobs, increase exports to $ 43 million and decrease imports to $ 33 million by 2019 (from $124 million in 2015). The impact on trade balance will result in savings of $ 76 million over the 3-years period.
As a result, in 2016 Rwanda increased taxes on used clothes from $0.2 to $2.5 per kilogramme, while taxes on used shoes increased from $0.2 to $3 per kilogramme.
In the 2017/18 Budget estimates, the Government also eased taxes on inputs under the Made-in-Rwanda initiative, which is expected to facilitate growth of the local textile industry.
However, during a teleconference last week, Harry Sullivan, the U.S. Bureau of African Affairs Acting Director for Economic and Regional Affairs told The New Times that the regional move to reduce on the importation of second-hand textile and leather products from the U.S. and other countries “will not” help the region achieve its primary target of rebuilding local textile sector-which had started booming in the early 1980 and 90s.
“While we understand the East African Community’s desire to build a domestic textile sector, we firmly believe that the EAC’s ban on imports of used clothing will not help achieve that,” Sullivan said.
“First, it’s job-destroying. The proposed ban will hurt an estimated 300 thousand men and women that work in the used clothing business all across the East African Community and it will also negatively impact at least 40,000 U.S. jobs in the used clothing sector in the United States,” he added.
On the proposed phase-out of second-hand clothes, Sullivan argues that the move would “limit” EAC citizens of variety in choice.
He questions whether the consumers of used clothing will be able to afford the new apparel being made in the EAC market.
He added that rather than banning imported used clothing, the most effective domestic growth strategy for the local fashion and apparel industry would be to build its brands and markets for the growing middle class, which prefers to buy new apparel in shopping malls and other places anyway.