Author: Dr Joseph Feyertag, Independent Development Economist

Abstract
This article presents a detailed study on the second-hand clothing (SHC) sector in Africa, focusing on its employment creation, economic impact, and related aspects. The research, which covers five African countries — Angola, Guinea-Bissau, Malawi, Mozambique, and Zambia — demonstrates that the SHC sector is a significant contributor to employment and economic development in the region. Through qualitative and quantitative analyses, the study reveals the structure of the SHC labour force, the relationship between SHC imports and textile manufacturing, and the potential for future growth and improvement in the sector.

1. Introduction

The SHC sector in Africa plays a crucial role in providing accessible and affordable clothing to a large portion of the population. It also serves as an important source of employment and revenue for many countries. However, the full extent of its impact on the economy and society has not been thoroughly explored. This research aims to fill this gap by providing a comprehensive analysis of the SHC sector in five African countries.

2. Literature Review

2.1 SHC and the Decline of Africa’s Textile Manufacturing Sector

In the 1980s and 1990s, the clothing manufacturing sectors in many African countries experienced significant declines, resulting in the loss of numerous jobs. While some have attributed this decline to the increasing liberalization of SHC imports, other factors such as unreliable infrastructure, high costs, limited access to raw materials, outdated capital stock, and lack of access to finance have also been identified as major contributors. For example, studies by Baden and Barber (2005), Brooks (2012), and Brooks and Simon (2012) suggest that the decline of textile manufacturing in Africa was a complex process influenced by multiple factors, and not solely due to SHC imports.

African textile manufacturing faced challenges in competing with Asian producers, who had a comparative cost advantage. This was exacerbated by trade liberalization policies that led to an influx of low-quality imports of new clothes from Asian countries. Despite the growth of SHC imports during the same period, it is increasingly recognized that the drivers of the decline in domestic textile manufacturing were multifaceted.

2.2 Employment Effects of SHC Imports

The decline in African textile manufacturing employment cannot be simply conflated with the growth of SHC imports. Most jobs in the SHC value chain are in the retail sector, where both SHC and new clothing are sold through informal markets. Additionally, SHC imports have created new employment opportunities in tailoring, repair, and distribution. For instance, Haggblade’s (1990) study in Rwanda indicated that while some informal jobs in tailoring were lost, they were compensated for by the creation of higher-paid jobs in handling, repairing, and restyling SHC. Field (2000) further argued that SHC imports may even complement informal domestic production of clothing.

A recent systematic review by Sumo et al. (2023) found that SHC is crucial for creating employment in various sectors such as trade, distribution, repairs, and laundry services. However, due to the lack of reliable data on informal employment, the employment impact of the SHC sector has been rarely analyzed in detail.

2.3 Structure of the SHC Labour Force

Employment in the SHC sector can be divided into five main categories: importers, wholesalers, formal retailers, informal retailers, and ancillary services. Importers hire casual labour for sorting and packing clothes and create formal jobs in business administration. Wholesalers sell bales to retailers and create transport jobs. Formal retailers operate in shops and markets, while informal retailers include hawkers and street peddlers. Ancillary services involve jobs in repairing, altering, washing, and ironing SHC.

The structure of employment varies by country, with the first three categories tending to be more formal in developed economies, while the latter two are more informal. In less-developed African countries, even some formal-looking retailers may be operating informally.

2.4 Employment Figures Cited in the Literature

Previous empirical studies have provided some estimates of employment in the SHC trade of individual countries. For example, Baden and Barber (2005) estimated that 25,380 workers were engaged in Senegal’s SHC sector. The Institute of Economic Affairs (IEA) (2021) cited evidence suggesting that approximately 10% of Kenya’s extended labour force, or roughly 2 million people, were employed in the SHC sector. However, these studies have limitations, such as outdated data, inconsistent calculations, and lack of differentiation between formal and informal employment.

In Malawi, Watson et al. (2016) provided an estimate based on the operations of DAPP Malawi, which employed around 280 staff in the processing and sale of used textile products. Additionally, around 3,000 market sellers regularly purchased SHC from DAPP, with each seller having around 2–3 workers, resulting in an estimated 9,280–12,280 workers sustained from DAPP’s imports alone.

2.5 Limitations of Previous Studies

Most studies on the economic impact of the SHC trade in Africa rely on limited data, often from literature reviews and secondary sources. This makes it challenging to estimate precise employment figures and employ robust methodologies. The lack of reliable data on Africa’s SHC sector has also hindered a more accurate understanding of its economic impact.

The environmental impact of the SHC trade in Africa is underresearched. While there have been claims of a large share of SHC imports becoming waste, more recent scientific survey evidence suggests a much lower proportion. However, the issue of new fast fashion items with shorter life cycles and their disposal remains a concern.

3. Qualitative Country-Level Data

3.1 Angola

There is limited literature on the Angolan SHC sector. A SIDA study by Peck and Pinto (2003) found that between 80–90% of Angolans dress in SHC. Assuming a minimum clothing requirement of 7 pieces per year (corresponding to 2 kilograms), the estimated demand for SHC is 24,000 tonnes per year. Another study by Nørup et al. (2019) reported that a majority of respondents in Angola purchased both new and second-hand clothing.

3.2 Guinea-Bissau

To date, there are no in-depth studies of the SHC sector in Guinea-Bissau. According to UN-COMTRADE data, the country imports around 2,000 tonnes of SHC per year (about 1 kilogram per person). The charity ADPP Guinea Bissau operates in the country and is involved in the distribution of second-hand clothes. In 2023, the organization hired 38 people in formal jobs and also provides informal jobs in logistics, sorting, and retail sectors.

3.3 Malawian ‘Kaunjika’

Watson et al. (2016) provided a useful case study of the SHC market in Malawi based on the operations of DAPP Malawi. Around 90% of Malawi’s population can only afford second-hand clothes. The SHC sector in Malawi has a structure similar to that of other African economies, with imported bales being sorted and sold to micro-entrepreneurs, who then distribute them in rural areas and townships. Almost all imports are suitable for reuse, with a very low rejection rate. DAPP Malawi employed around 280 staff in 2014/2015 and supported an estimated 9,280–12,280 workers through its imports, which totalled around 4,000 tonnes. By 2023, DAPP Malawi was employing 426 workers in formal jobs distributing and selling second-hand clothes and footwear.

3.4 Mozambique’s ‘Calamidades’

Andrew Brooks (Brooks, 2012; Brooks and Simon, 2012) conducted an extensive analysis of Mozambique’s SHC sector. The study focused on the capital city, Maputo, and found that SHC vendors face difficulties in making value-added sales and achieving profitability. Mozambican SHC is predominantly imported by Indian traders, who sort and categorize the clothes before selling them to local vendors. The charity ADPP Mozambique operates a different model, importing clothes from Europe and sorting them in an industrial sorting centre in Beira. The funds raised from the sale of clothes support ADPP Mozambique’s social development projects, mainly in education.

3.5 Zambian ‘Salaula’

Karen Tranberg Hansen’s work has been influential in documenting the importance of ‘salaula’ in Zambia’s economy and culture. Three-quarters of Zambia’s population shop from ‘salaula’, which is imported through various channels and distributed in urban and rural markets. Zambian SHC traders are diverse, and the trade creates income not only for traders but also for ancillary activities such as repair, alteration, and cleaning. Hansen argues that ‘salaula’ has kept tailors busy with more work and has not displaced them.

4. Quantitative Methodology

4.1 Methodology Steps

In the absence of detailed employment figures for the five countries, a four-step methodology was adopted. First, SHC net imports data was collected for the five countries and other relevant African countries. Second, for Ghana, Kenya, and Senegal, where employment data was available, the ratio of imports to the number of jobs created in the SHC sector was calculated. Third, an average ratio was applied to the five countries under study. Fourth, formal versus informal employment in the SHC sector was calculated using data from Senegal and Malawi and applied to the other countries.

4.2 Results

The calculations suggest that over 1.28 million people are employed in the SHC sectors of Angola, Guinea-Bissau, Malawi, Mozambique, and Zambia. The vast majority (1.23 million) are in informal employment. The estimates of SHC employment represent 5–25% of total service sector employment in each country. Given the high share of African workers in informal trade, the estimated 1.28 million people employed in the SHC sector appears to be a relatively conservative estimate.

5. Future Avenues of Research

5.1 Enterprise Surveys

Future research should focus on representative enterprise surveys of vendors in markets, especially those where the share of jobs in the SHC sector is highest. These surveys could help determine the share of SHC trade compared to other products and understand the employment relationships between different types of vendors. For example, a recent survey in Accra found that up to 91.9% of SHC vendors identified SHC as their primary source of income.

5.2 Environmental Impact

The environmental impact of the SHC trade requires further investigation. Research should focus on determining the proportion of SHC imports that end up as waste and distinguishing between different channels of waste. Additionally, the environmental consequences of replacing SHC with newly produced clothing, especially imports from cheap production in Asia, need to be better understood.

5.3 Structural Economic Transformation

Given the high levels of extreme poverty in the five countries studied, future research should explore how SHC employment can contribute to the structural economic transformation. Informal services like SHC retail can be a starting point for income diversification and livelihood strategies. Understanding the evolution of services and their impact on economic development can help formulate policies to support the formalization of jobs in the SHC sector and provide social protection.

5.4 Economic Impact Quantification

Research should quantify the economic impact of SHC beyond employment, including wages, household income, poverty reduction, and fiscal revenues. For example, in 2022, the estimated tax intake from SHC to the five countries was above $73.5 million. A recent study of retailers found that SHC traders contribute significantly to household incomes, suggesting that the sector supports a large number of people.

6. Conclusion

This research provides a comprehensive analysis of the SHC sector in five African countries. The SHC sector is found to be a significant employer, especially in the informal sector, and also contributes to government revenues and poverty reduction. However, further research is needed in various areas to enhance our understanding of the sector and support its sustainable development. The SHC sector has the potential to play an even more important role in Africa’s economic and social development with appropriate policy interventions and continued research efforts.

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