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Second hand clothes business thrives in Kenya

15 October 2014, 16:46

Nairobi - Shaded by ragged squares of canvas, amid choking dust and the noise of hawkers, shoppers in Nairobi's Gikomba market can turn up Tommy Hilfiger jeans or a Burberry jacket for a fraction of the price in London's Regent Street or New York's Fifth Avenue.

But there's a catch: the clothes are all secondhand, discarded as worthless at charity shops or thrift stores in Europe or the United States and then shipped thousands of miles to another continent, occasionally in such pristine condition that an original price tag is still attached.

Kenya 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.

To critics, the business raises the perennial problem of how Africa can build its own industry when it is flooded with cheap imports. But traders in Gikomba do not see it that way.

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"It’s a source of employment," said Clement Shuma from behind a pile of secondhand trousers - his specialty - that includes British high-street makes like Topman and Next, and sometimes more internationally well-known labels like Levis or Benetton.

"Even that person who’s not well, who’s earning little, at least can afford a piece of cheap (clothing), at a lower price instead of buying new," he said, adding prices ranged from 400 to 1,000 shillings ($4.50-$11.20) per item, depending on quality and brand.

It is a common scene across Africa, with Ghana, Tanzania, Benin, Uganda and Kenya among the biggest markets. They provide clothing to many on a continent of 1 billion where economies may be growing many Africans struggle to get by.

“Before, if you see our people, the knees are torn ... you can see the thighs,” said Regina Wanjiku, a used clothes importer and wholesaler at Gikomba, describing the sartorial challenge before the business took off two or three decades ago when Kenyans depended on more expensive local products.

New competition

How the trade has grown, in part, reflects the economic changes that have swept the continent. Until the 1980s, high tariffs protected home grown garment and other businesses.

Then economic liberalization programs, backed by the World Bank and International Monetary Fund, started taking hold in Kenya and elsewhere. Tariffs were lowered and local factories had to contend with new competition. Many failed and shut.

Some industrialists say importing secondhand clothes, known in Swahili as "mitumba", undermines Kenya's own garment makers.

“That has hurt badly the domestic market,” said Rajeev Arora, executive director of the African Cotton & Textile Industries Federation.

He said 85 percent of Kenya’s textile plants had closed since the early 1990s, while cotton output was a tenth of 1990s levels.

Other experts say it was not the used clothing imports that drove factories out of business, but inefficient production.

Dorothy McCormick, a University of Nairobi professor who has researched Kenya’s textile trade, said locally produced clothing was highly subsidized by the government and had always been too expensive to supply the domestic market.

"Mitumba" filled a gap in the market, cheaply, she said.

Kenya, a nation of 44 million people, is now building up a new garment-making business, but the focus this time is on exports. Kenyan factories exported garments worth $335 million in 2013 and the business employed 40,000 people, says Jaswinder Bedi, a Kenya-based director of the International Textile Manufacturers Federation.

In part, the export business has grown because of a trade pact between the United States and Kenya, was well other African states, giving them duty free access to the U.S. market.

Hawker to importer

Nairobi City Council estimates that about 65,000 people work in Gikomba, Kenya's largest "mitumba" market, with some people sharing stalls or working on different days of the week. In addition, there are a dozen or so smaller marketsin Nairobi, and other markets around the country, creating more employment.

The informal nature of much of the trade makes it difficult to estimate precise numbers, though researchers and officials suggest it may employ hundreds of thousands.

Banks have spotted an opportunity and, since 2007, several have opened branches next to Gikomba to serve the traders.

“We actually follow the customer, from maybe a hawker to an importer,” said Benjamin Karanja, a spokesman for Family Bank, which operates at the market. “So as they grow, we also grow.”

He estimated the market's turnover was $1.1 million a month.

The route from donor to new owner, described by officials, exporters, wholesalers, traders and academics, takes the used clothes halfway around the world with the money made at each point racking up to a multi-million dollar global business.

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“It creates new livelihoods and it creates new value in a commodity, which otherwise would have been dumped,” said David Simon, a geographer at the Royal Holloway, University of London.

Charity or thrift shops in the West sift donated items, often keeping just a quarter of the items. The rest are sold to exporters for up to 90 U.S. cents a kg, then wrapped in 45-kg bales and packed in containers - a standard 40-foot container holds about 550 bales, equivalent to about 25 tonnes of clothes.

At Kenya's Mombasa port, customs agents collect duties of 1.2 million shillings or more per container, officials and traders say. Although officials did not have total revenue figures, the state statistics agency said imports amounted to 100,000 tonnes worth about $90 million in 2013 alone.

This would mean at least 4,000 containers and potential duties amounting to 4.8 billion shillings ($54 million) a year, according to a Reuters estimate.

At market, Nairobi City County profits by charging a 50 shilling fee each day from informal hawkers. Bigger shacks or shops pay 4,000 to 15,000 shillings a year. Experts estimate there are about 10,000 shops and stalls in Gikomba.

"Many families depend on Gikomba,” said Wanjiku, the Gikomba wholesaler, sipping tea in her warehouse as porters unloaded bales from a delivery truck outside.

Many people start with as little as 1,000 shillings, she said, enough to buy a clothes bundle that will earn a small profit. "And then he has food for his children," she said.

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- Reuters

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