In what seemed like an urgent action to protect its promising indigenous clothing and textiles industry, Rwanda courageously assigned the ban on the importation of second-hand clothing in 2018. Two years prior, the authorities had increased the tariffs on imported used clothes from $0.20 to $2.50 per kilo. This was done to radically discourage importation and boost the country’s local manufacturing sector. However, what price did they pay? Should Africa follow suit? Is it an informed political decision? We’ll see!
WHY DID RWANDA INITIATE THE BAN ON THE IMPORTATION OF SECOND-HAND CLOTHING?
It is an accepted notion that the continual influx of hand-me-downs in Africa has contributed to the immediate collapse and fracture of local textile industries in Sub-Saharan Africa. The cheap attribution in prices of these discarded garments was able to stifle the growth of self-employed tailors and their workshops.
Furthermore, many African nations were once a habitat to vibrant and high-producing textile industries. Nevertheless, decades of political mismanagement, instability, and global competitiveness have overtaken the plan. Kenya accounted for half a million garment workers decades ago. The number has dwindled in an area of tens of thousands.
Another additional reason for the collapse in the productivity of local clothing is the loose government market restrictions (Market Liberalization) in the 1980s. Studies show it was a participatory force in the drop in textile and clothing jobs.
The US Agency for International Development (USAID), in a study conducted in 2015, highlighted how the East African Community (EAC) accounted for nearly 13% of global imports of used clothing worth $274 million. 67% of the East African population purchased at least a fraction of their clothes from used clothing markets.
These disturbing figures provoked the EAC in 2015 to announce the ban on second-hand apparel from their markets from 2019. In the case of Rwanda, the government perceived the wearing of used clothing as a factor that threatened the dignity of its people. The government strategically saw the move as a way to help nurture its garment industry and create more than 25,000 jobs.
WHAT PRICE DID THEY HAVE TO PAY?
Knowing fully well of its economic ramifications, a trade organization in the United States filed a petition with the Office of the US Trade Representative (USTR). The organization called the Secondary Materials and Recycled Textiles Association (SMRTA) speculated that the EAC’s 2016 decision to exterminated used clothing would impose “significant economic hardship” on America’s used-clothing industry.
It was estimated that EAC’s second-hand apparel ban could cost 40,000 US jobs and $124m in exports. Thus, you’ll understand their worries and why they want us utterly dependent on their fabric industries.
In March 2017, the USTR threatened to remove four East African countries – Kenya, Uganda, Tanzania, and Rwanda – from the Africa Growth and Opportunity Act (AGOA).
AGOA is a flagship US trade legislative policy designed to boost trade and investment in qualifying African countries by granting duty-free access to 6,500 exported products. Through the AGOA framework, Rwanda exported clothes to America duty-free.
Despite that, the intention to issue a ban on the importation of used clothing didn’t go down well with the US. A defiant Rwanda stayed adamant on their policy which led them to be removed from the list of countries that benefitted from the AGOA.
Therefore, only Rwanda adhered to the initial EAC agreement. Kenya, Uganda, and Tanzania backed out.
HOW IS RWANDA NOW? WHAT SHOULD AFRICA LEARN?
The insistent stance of Rwanda to weigh in on a patriotic option to protect the nascent domestic industry was a courageous one.
Firstly, it came from a prestigious standpoint that America’s and other Western countries’ cast-offs were a stain on the dignity of Rwandans, and therefore the move to limit the influx was important. It was a remedial action to promote local content.
As a result, evaluations have shown that there has been strong performance in Rwanda’s textile and garment sector. It highlighted an unprecedented 83 percent increase in value between 2018 and 2020.
Regardless of the 30 percent tariff on their exports to the US market, local apparel manufacturers sought suitable alternatives elsewhere. This paid off with statistics indicating an increase of $34.6 million worth of exports.
Unfortunately, the prohibitive tariff resulted in a significant fall in textile exports to the US market. The value had deteriorated from $2.5 million in 2018 to a meager $224,294 in 2020.
The AGOA garment ban reawakened local producers to establish larger enterprises with encouraging returns. It served as a motivation.
The government had an opportunity to promote the “Made in Rwanda” campaign. This translated into commensurate benefits such as jobs and invigorating the local industry in terms of entrepreneurship drives, creativity, and marketing.
The Rwanda-US AGOA garment fallout wasn’t enough to taint the zeal of the Rwandans to carry on with what many seen as unrealistic. At the end of the day, they had to put their country first.
Rwandan designers hope Kigali become Africa’s fashion capital.
In order to attract economic growth within the African continent, our manufacturing industries must be capable to compete globally with their locally made products. Rwanda’s case is a noteworthy example.