Tuesday, March 15, 2005

How being in government gives some Kenyans the power to pronounce overnight poverty on their fellow law abiding, hard working, wealth creating Kenyans

If your trade
is peacefully buying
selling used clothes for fun, to feed
educate your children or
whatever other reason people have for
doing whatever they do for a
living, why should
another human
being destroy your
livelyhood, not
by offering your customers
something they prefer,
but just

By Mary Mwangi

Today is March 15, the day dreaded by all mitumba (second hand clothes) traders and wearers.
After today, smartness in empty bellies will be a thing of the past for those who survive on less than Sh80 a day. About 10 million people will lose an economic lifeline derived from imported used clothes and shoes popularly known respectively as mitumba, misumba or nguo kukuu in the East African region.
The East African Council of ministers gave importers of used clothes up to the middle of March to choose between abandoning the trade altogether or bringing in the stuff on the punitive tariffs imposed by the new East African Customs Union (EACU) ostensibly to protect local textile industry, promote cotton growing and raise revenue.
Kenyan ministers of Finance and Trade and their counterparts in Uganda and Tanzania in their "conventional" wisdom resolved to impose a tariff equivalent to 200 per cent on mitumba and shoes to stem cross border smuggling amongst other things.
The increase of import tariff from Sh20 to Sh 60 per kg on imported clothes translates to Sh 1,485,000 up from Sh495,000 per 24,750 Kg container. This is punitive.
Informal sector complements government efforts to create jobs by providing employment to schoolleavers, drop-outs, retrenchees and retirees. It defeats reason and common sense to insinuate that what open-air traders do negates economic progress.
Kamukunji MP, Norman Nyagah, is a lone voice in the crusade to save millions consigned to poverty, early deaths and family breakups when their economic lifelines terminate. His colleagues in various House committees share in the complicity to promote poverty amongst the population in the informal sector. It is not in the interest of the people for leaders to preside over plans and deliberate on ways of stifling the business environment through restrictive laws, regulations and excessive taxation.
According to political leaders, mitumba remains the sole cause of the collapse of the local textile industry. Curiously the ministers failed to address the issue of cheap and low quality textile imports, which impact negatively on local production. The Asian imports are comparatively more expensive than mitumba clothes but cheaper than locally produced apparel.
Ministers agitating for the protection of local industries are avid consumers of foreign products. Most of designer clothes ministers wear, the poor can only find in mitumba at pocket-friendly prices.
Another reason advanced is that those in the informal sector have not been paying their share of taxes. That is neither here nor there. If mitumba peddlers were not paying taxes as alleged, why would the business people bother to petition authorities on the proposed tariffs? Statistics at the Kenya Revenue Authority (KRA) bear testimony to the fact that mitumba dealers are indeed taxpayers.
The cotton industry collapsed years ago and even before Kenya was given a quota in the African Growth Opportunity Act (AGOA) to revamp the industry, rehabilitation was the most unlikely dream. This is not in dispute and Agriculture Minister, Kipruto arap Kirwa and his counterparts in Trade and Finance can bear testimony to this. They have been conspicuously silent on plans to kick-start the scheme.
There is no guarantee that cotton from Kenya will find good prices in the world market. Subsidies to cotton farmers make American cotton in the world market cheaper by 25 percent but will the Government have the money to sustain many years of subsidies?
Textile factories closed down due to mismanagement, corruption, and lack of raw materials, hypocritical policies, questionable prices and low quality. These have nothing to do with importation of mitumba into the region at all.
Independent studies confirmed that there is no link between mitumba import and the collapse of textile industry. In the year 2004, studies undertaken by Swiss Academy for Development (SAD) and German Federal Ministry of Economic Cooperation and Development (BMZ) showed that second hand clothes exports to developing countries do not ruin their domestic industry. In a global economy, local textile industry can thrive if the country achieves the right quality specifications and minimizes the cost of production. This is not the case here.
The same can be said of their key supporter, Francis Atwoli of the Central Organization of Trade Unions (Cotu). The Cotu Chief Executive, claims that the closure of textile factories resulted in job losses because of second hand clothes imports. This claim is debatable. When Cotu affiliate Kenya Textile Workers Union fails to recruit or sell their services to the informal sector, who is to blame?
Mr Atwoli, who also leads the Plantation and Agricultural Workers Union, cannot say how much acreage is under cotton crop in the country today and out of his general membership, how many are from cotton farms. Reviving the cotton industry, as those in the know would like to put it, is still an obscure project.
For the ordinary middle class Kenyan, mitumba means a lot more than the mere economic rhetoric of the cotton and textile industry. Second-hand clothes provide a break especially when spending on clothes for the majority of the low earning population who find it ironical to fancy used cars, radios, refrigerators and houses but shun used clothes. The same people who advocate or decide to slap extra duty on mitumba, most likely may not be even adorning locally made apparel.
The numbers of people who depend on the mitumba trade, both in the rural and urban areas, are massive. For the government to ignore such an obvious fact in its deliberations is to say the least a betrayal of trust and confidence. Ten million people is not a small constituency to brush aside. At least, Kenyans can afford second hand items, dress decently and still spare extra money for other needs in the face of biting poverty.
Killing mitumba business to save cotton or textile farmers is not a solution to the economic woes. It is the same as killing one sugar factory in Ramisi and starting one in Garsen as a cost saving measure yet both are entitled to equal protection from the same system.
Mitumba traders some of whom were cotton farmers are not in the business because they fancied killing the local textile trade. They could not survive in the market because ginneries never paid for their produce or there were no alternative outlets.
No one forces anybody to buy mitumba because the market presents a variety of goods for the consumer to choose from according to quality and price. Second hand products have enabled many Kenyans to live a considerable comfortable lives for sometimes as economy nosedived and purchasing capacity eroded beyond redemption.

* The writer is a businesswoman dealing in used clothes

Copyright © MMIV . The Standard Group

No comments: