Kenya is convinced that the only way to revive the domestic textile industry is by imposing a ban on the importation of second-hand clothes (mitumba). Indeed, were it not for objections from some of her business partners with a threat of retaliation, the ban would have been in place as early as 2015. Thanks to Covid-19, Kenya now has enough ‘reasons’ to finally impose the ban that she has been craving for all along.
The Kenya Bureau of Standards (Kebs) announced that the ban was a safety measure undertaken to avoid the spread of Covid-19, which has put the world’s activities at a standstill.
A question that one would ask is why the State could not explore other precautionary measures like fumigating the mitumba at the point of entry before rushing to impose the ban. Kebs would definitely have a hard time arguing out their case because until now, there has been no evidence that mitumba has catalysed the spread of the disease.
For this reason, one would easily conclude that Kenya imposed a ban on importation of second-hand clothes for some reasons other than preventing the spread of Covid-19. Of all the available reasons, protecting the domestic textile industry against the cheap imported clothes would the most convincing.
It is not a coincidence that the ban comes at a time when Kenya is promoting the import-competing industries through such slogans as ‘Buy Kenya Build Kenya’ and when Kenya has made development of the local manufacturing industries a key area in the Big Four Agenda.
Kenya has all the incentives to ban the importation of second-hand clothes. It should be remembered that before the trade liberalisation in the industry in the early 1990s that signalled the importation of second-hand clothes, textile industry was the best performing industry in Kenya.
In fact, it was the second largest employer after the Public Service. But this fate was to be reversed courtesy of the cheap and higher quality second-hand clothes that was flooding the market from US, Britain and China. Since then, the industry has been on its deathbed.
Thus, Kenya is justified to have the appetite for imposing a ban on the importation of second-hand clothes at the next available opportunity. In fact, Leather Apex Society of Kenya is on record urging the government to permanently lock out the cheap clothes imports to re-awaken the local sector. But is this ban good or bad for the economy?
To begin with, it is worth noting that as a result of the ban, tens of thousands of Kenyans who make a living by selling second hand-clothes are already running out of stock. If the ban persists, it will not be long before they are included to the long list of jobless Kenyans.
Someone would argue that these traders would be absorbed in the local textile industry. This is not guaranteed. Just because one sells clothes does not necessarily mean that they have skills to make clothes.
Also, in the short run, it remains largely doubtful as to whether Kenya can manufacture an equivalent of 100,000 tonnes of second-hand clothes that are imported yearly as to guarantee these traders their jobs.
The ban will, besides, have a direct bearing on the real wages of Kenyans. Due to the ban, Kenyan textile industry will have the monopoly to the market, and this implies reduced supply of clothes in the market, signalling an increment in clothes prices.
By now the prices of locally made clothes are already higher even with the fact that they are of lower quality with respect to the imported ones. Because Kenyans will have to dig deeper into their pockets to buy clothes, their purchasing power will be lowered.
That most Kenyan consumers prefer imported second-hand clothes to locally manufactured ones is a phenomenon caused by what Scottish economist Adam Smith called ‘the invisible hand of the market’ or market mechanism. You dare stop these market forces through protectionist government policies such as the ban on the importation of second-hand clothes and you risk condemning the economy to a market failure characterised by stagflation and recession.
Giving a free ride to textile industry like the Leather Apex Society of Kenya is demanding would be counterproductive and likely to backfire. It will lead to more job losses than the ones it will create but worst of all, it will shift income from consumers and non-protected sectors to the declining, non-competitive textile sector. Lift the ban!