The government has told second-hand clothes dealers to buy stock from the local Export Processing Zone (EPZ) companies to avoid imports that may expose Kenyans to further coronavirus infections.
“In a meeting held this morning with dealers in second-hand clothes, I encouraged them to strike partnerships and source goods from local manufacturers,” said Betty Maina, the CS for Trade and Industry.
In 2017, the government allowed EPZ companies to sell up to 40% of their stock in the local market, duty and VAT free, a rise from the previous 20% in a move aimed at promoting local textile manufacturing.
The move was however protested by the non-EPZ local textile manufacturers. Although there was a subsequent ban, several EPZ companies continue to sell part of their stock in the local market.
Such stock is that which is usually marked as reject or slow-moving. The locally manufactured EPZ clothes compete favourably with second-hand clothes on pricing, making them a threat to other local manufactures who do not enjoy incentives from the government.
EPZ stock to compensate the U.S, China imports
The CS imposed what is seen as a soft-ban, based on the dynamics of the second-hand clothes also known as mitumba imports in Kenya.
“The government has cautioned dealers in second-hand clothes to abide by set standards and avoid importing them from pandemic hit countries,” said the CS.
Most of the mitumba imports have been coming from China and the U.S, both of which have been hit by the coronavirus pandemic. In any case, the pandemic is global meaning dealers cannot import from any country.
Kenyans spent an average of Sh16 billion annually in 2018 and 2019 to import mitumba, according to the Kenyan National Bureau of Statistics, to the detriment of the local textile manufacturing sector.
One of the reasons for the rising mitumba imports is the threat by the U.S to punish Kenya if it bans entry of the used clothes from that country.
In 2018, America threatened to remove Kenya from the list of beneficiaries of the duty-free and preferential market access to its market under the African Growth and Opportunity Act (Agoa), which earned Kenya Sh45 billion in 2019.
The imports have however compromised President Uhuru Kenyatta’s legacy project of Big4 Agenda, whose one of the four pillars is the expansion of the textile industry.