Mitumba imports defy Uhuru textile incentives to hit Sh17bn

Traders spent Sh17.77 billion on second-hand clothes imports in 2019, provisional official data shows, slowing down creation of new job opportunities in the textiles subsector.

The Sh837 million, or 4.94 percent, growth over a year ago when the imports were captured at Sh16.93 billion was, nonetheless, the slowest year-on-year growth in more than five years, statistics in the Economic Survey 2020 indicate.

The Kenya National Bureau of Statistics (KNBS) data comes on the back of renewed focus on incentivising struggling domestic textiles factories in a dragging plan which initially targets four sub-sectors under the manufacturing pillar of President Uhuru Kenyatta's “Big Four” economic transformation plan 2018-2022.

Agro-processing, leather and fish-processing are the other sub-sectors earmarked for incentives.

Superior quality and relatively lower prices for second-hand clothes, popularly called mitumba, has continued to drive demand for the merchandise at the expense of locally-made clothes, fetching traders who largely operate in informal markets higher margins.

That has kept their demand elevated over the years, with orders hitting a record high in 2019 from Sh16.93 billion in 2018, Sh13.06 billion (2017), Sh12.86 billion (2015) and Sh10.15 billion a year earlier.

The influx of mitumba clothes is, however, is expected to slow down this year after Kenya's Trade ministry in March suspended importation in line with guidelines issued by UN's World Health Organisation (WHO) as one of the measures to stem global spread of the coronavirus pandemic.

To fill the void left and cushion against reduced exports following lockdowns in key destinations such as the US, the Treasury has allowed companies operating in the tax-friendly Exports Processing Zones (EPZs) to sell all their products locally.

This was after Treasury secretary Ukur Yatani temporarily lifted the restriction that compelled EPZs to sell only 20 percent of the annual production in the local market through a letter to the Kenya Revenue Authority Commissioner-General Githii Mburu.

The lucrative second-hand clothing market had seen traders from China open shops in Gikomba, Kenya’s largest informal market for mitumba, in recent years to cash in on rising demand.

Leather, textiles and agro-processing sub-sectors were back in 2018 seen as low-lying fruits to jump-start Mr Kenyatta’s plan to revive and modernise Kenyan factories under the manufacturing pillar of the “Big Four” agenda.