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Why Uganda cannot do without mivumba

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A man sorts second-hand clothes in Kampala yesterday. Many people earn a living from selling second-hand clothes. PHOTO/ABUBAKER LUBOWA

The wobbly pattern of cotton production in Uganda has brought to question the feasibility of a 2018 directive by President Museveni to restrict the importation and sales of second-hand clothes. 

In the Financial Year (FY) 2019/2020, Uganda produced 173,457 bales (32.08 million tonnes) of cotton. This fetched $42.36m (about Shs155b), a significant slump from $57.83m (about Shs212b) realised from sales of 189,444 bales (35.04 million tonnes) of cotton in FY 2018/2019. 

The slump, according to the Uganda Ginners and Cotton Exporters Association (UGCEA), is attributed to the Covid-19 pandemic. Consequently, it caused production to drop up to 9.38 million tonnes and 12.77 million tonnes in 2020/2021 and 2021/2022, respectively. The slowed recovery has pointed to a significant loss of interest in growing the crop, with production figures remaining below 20 million tonnes even after the lockdowns were lifted. 

Besides the low production of the prized crop, an average of 90 percent of the produced cotton, according to records this newspaper obtained, is exported, leaving the internal textile establishments to struggle with the 10 percent balance. 

“What we produce, we cannot consume at all. We sell it to the international market. The reason is that we have an underdeveloped textile industry,” Ms Agnes Linda Auma, the chairperson of the parliamentary Committee on Agriculture, says. 

Besides the limited development of the industry, Ms Auma says the high costs of production associated with textile industries have discouraged both local and foreign investment into the sector.

“What is discouraging our cotton industry,” she notes, “is its production costs. Buyers and dealers still prefer to import new T-shirts from Bangladesh or China because they are cheap, because no one will buy those expensive ‘classic’ T-shirts from Fine Spinners Limited or Nytil.”

While the global textile market size is estimated to grow to $1.412 trillion by 2028, Uganda Manufacturers Association (UMA) records show that nearly 250,000 smallholder farmers are engaged in cotton production. These, the association says, produce an average of 68,913 bales of cotton per annum. The limited numbers of farmers engaging in the crop production chain have in effect worked against set targets in terms of volumes and value.

In its 2001/2002 annual report, the Uganda Cotton Development Organisation (UCDO) indicated that under a Cabinet-approved strategic export commodities programme, cotton production would increase to 185,000 tonnes. Yet the flagging fortunes of Uganda’s textile sub-sector are there for all to see. This is largely down to, amid lack of political will, the increasing importation of second-hand clothes. 

Since cotton is a single-season crop, farmers are usually discouraged by the low yet constantly fluctuating prices. 
“If you see the ginneries across the country, they are now being run by international private sectors because the indigenous farmers and their associations have lost interest. The government needs to put more effort in attracting more investors because the investors we have, majorly, are not dealing in cotton or textile investment,” Ms Auma says.

An October 2024 findings of research by the Economic Policy Research Centre (EPRC) indicated that pushbacks from second-hand clothes traders and importers, including diplomatic pressure from the US, impeded and delayed the implementation of the proposed ban despite past attempts. Despite President Museveni reasserting last year his government’s commitment to grow the domestic textile sub-sector, the researchers found that rising global competition has slowed down Uganda’s attempts to ban second-hand clothes or mivumba. 

“The dumping of counterfeits and smuggling of commodities, rising competition on the global market, failure of governments to promote domestic garment manufacturing, declining productivity of firms, and dominance of global value chains remain serious debilitating factors,” it said.

Asian markets such as China are said to be outcompeting local industries that have limited capacity to produce finished garments. The competition is said to take a toll on domestic firms producing for both international and domestic markets. For example, in 2017, the United States Agency for International Development (USAID) reported that China exported $1.2 billion worth of mivumba to the East African Community (EAC) countries in 2016 alone. Mivumba accounted for about 20 percent of these imports. 

The 17th Ordinary Summit of EAC Heads of State in 2016 mooted a proposal to ban second-hand clothing and footwear imports. The decision was intended to promote the development of integrated textile. Leather industries were to be implemented in a phased protocol between 2017 and 2019 through gradual tariff increments on imported second-hand clothes while encouraging member states to capitalise on the use of the regional textile and footwear supply and production capacities. 

 In the USAID document, EAC countries imported up to 12.5 percent of the world’s second-hand clothes valued at $274m (about Shs1 trillion) in 2015 alone. The number of people who earn a living from trade in second-hand clothes has grown significantly. While the number of people employed by the trade grew from 388,022 to 698,781 between 2011 and 2021 in Uganda alone, the EPRC data indicated that import of mivumba grew by 43 percent between 2013 and 2022 from $61m (Shs223b) to $106m (about Shs389b).

China, USA and Canada topped the chart. Uganda’s imports of mivumba have grown massively in the past years. As of 2023, Uganda imported mivumba worth $95.9m (Shs352b) compared to $79.1m (Shs290b) worth of new clothes. China has remained Uganda’s biggest supplier of mivumba since 2014.

In 2023, China exported mivumba and clothing accessories, blankets and travel rugs and articles worth $695.5m, according to Trademap’s 2024 data. While Kenya remained the biggest regional destination for China exports at $105m (Shs385b), Tanzania at $60m (Shs220b) and Uganda at $58.7m (Shs215b) came second and third respectively, according to Trademap.

China’s exports to Uganda at $58.7m were slowly followed by the US at $13.2m (Shs48b), Canada at $12.2m (Shs45b) and India at $6m (Shs22b). The aggregated used textile imports under product category HS Code 6309 of worn clothing and clothing accessories, blankets and travel rugs, household linen and articles (including footwear), totalled $116.7m (Shs428b) in 2023, with second-hand clothing accounting for 82 percent of the total, the EPRC research revealed.

“The emergence of China, as well as UAE, India and Pakistan as major exporters of SHC to Uganda is due to the evolution of the global trade networks of used clothing that have grown beyond the direct market between the US and Africa.”

In the past 24 years (2004-2024), China has exported the majority of the global second-hand clothes, amounting to $333m (Shs1.2 trillion), followed by the UAE ($152m or Shs557b) and the USA ($150m or Shs550b). EPRC research also revealed that China remains the leading exporter of new clothes to Uganda, exporting $66m (Shs242b) worth of articles of apparel and clothing accessories, knitted or crocheted and articles of apparel and clothing accessories, not knitted or crocheted, in 2023. Of the imported used clothes, the researchers also detailed that Uganda largely re-exported the clothes to other EAC markets. 

Total export values from 2014 to 2023 show that the DRC was the leading destination ($6.1m or Shs22b), followed by Kenya ($2.7m or Shs9.9b), and South Sudan ($2.3m or Shs8.4b), it is established. 

The research also noted that the total value of SHC re-exports to EAC countries was higher than that in the formal records given that there is a high prevalence of informal cross-border trade between Uganda and her neighbours.

The Uganda Bureau of Statistics, in 2020, reported that the top eight commodities constituting Uganda’s informal cross-border trade exports were valued at $253.2m or Shs928b) (47.6 percent) with the share of clothes (new and used) being the largest percentage at 10.2. 

In contrast, Uganda’s informal cross-border trade imports of clothes (new and used) amounted to $4.9m (Shs18b) in 2019 compared to $54.1m (Shs198b) exports of the same, confirming that Uganda is a net informal cross-border trade exporter of clothes to its neighbours. The DRC remains Uganda’s biggest market for all informal cross-border trade exports, with export value amounting to $241. 8m in 2019; followed by Kenya ($34.0m) and South Sudan ($30.0m). 

According to the Uganda National Panel Survey 2018/2019 and 2019/2020 data sets, household expenditure on mivumba indicates that total household expenditure declined from Shs331b to Shs281b.

Expenditure on new clothes fell from Shs704b to Shs689b , a decrease attributed to the Covid-19 pandemic. 

The data detailed that non-poor households averaged Shs46,590 on mivumba in 2018/2019 compared to Shs40,371 in 2019/2020, a decline of Shs6,218. However, average expenditures among poor households recorded an increase in mivumba by Shs2,146 between FY2018/2019 and FY 2019/2020, but a decline of Shs3,963 in average expenditure on new clothes. 

Mivumba, by October 2020, incurred an import duty of 35 percent or $0.40/ kg besides the environmental levy, being that they are perceived as harmful to the environment, VAT, infrastructure levy, withholding tax and a surcharge.

Despite the high taxes, URA data indicates that mivumba and other used articles rank among the top 20 commodities imported into Uganda.

According to URA, between the FYs 2017/2018 and 2020/2021, Uganda’s export earnings of used clothing grew from $5.34m to $8.68m, with $1.56m worth of imported apparel being re-exported to other countries. Its import value of SHC increased significantly, from $57.65m in FY2017/2018 to $102.71m in FY2020/21. 

Background
In August 2023, President Museveni, while speaking at the opening of 16 factories at Sino-Uganda Mbale Industrial Park, declared war against mivumba and urged Ugandans to embrace his Buy Uganda Build (BUBU) Uganda policy. He declared a ban on importation of mivumba, saying the move would promote consumption of locally made fabrics.