Phasing out second-hand clothes. opportunities and challenges for Uganda’s textile industry

At the 17th Ordinary Summit of East African Community (EAC) Heads of State, in 2016, the EAC member states adopted a ban on second-hand clothing (SHC) and footwear imports to develop local textile and leather industries. The ban, to be implemented between 2017 and 2019, aimed to phase out SHC imports through gradual tariff increases.

While the proposed ban is expected to strengthen the regional textile sector, it may cause short-term job losses, reduced import tax revenue, and increased imports of cheaper new clothes from low-cost producers in Asia. Uganda has delayed the ban due to local trader opposition and US diplomatic pressure. However, in early 2024, the President reaffirmed his commitment to the ban to grow the domestic textile subsector. This policy note examines the current SHC market in Uganda, focusing on importation and local demand, using data from the International Trade Centre (ITC) Trademap and national household surveys from the Uganda Bureau of Statistics.

The analysis reveals that China is now the largest source of SHC, followed by the USA and Canada. Not all SHC imports are sold locally; some imports are re-exported to neighbouring countries. While SHC tax revenue has increased, its contribution to total tax revenue has declined. Poor households’ expenditure on SHC has increased, but their budget share for clothes has decreased. In contrast, non-poor households spend more on both SHC and new clothes. Urban households and those in Central and Western regions of Uganda spend more on new clothes. The significant expenditure on new clothes indicates a market for new clothes that the Uganda textile sector can tap into.

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cotton sector Second-hand clothes Uganda textile industry used clothes