Eliminating Caguwa: The buck stops with regional governments

In the latest effort geared at eliminating used clothes and leather products choking regional economies, the East African Community Heads of State recently directed the EAC Secretariat to work out measures that will see importation of secondhand clothes, locally known as caguwa, and related goods virtually banned. The EAC Secretariat cannot do much beyond studies, reports and updating strategies on paper with no implementation. And besides Rwanda’s EAC affairs minister Valentine Rugwabiza saying that 80 per cent of our cotton is exported unprocessed, we need living statistics, telling us of the latent capacity of the region to produce textiles and leather products, as well as a discernible roadmap that will give us, citizens, the hope of reaping real integration fruits. The buck stops with our governments, especially the Heads of State. They owe it to us the citizens. People opposed to the ban of used textiles and leather do so because they see no immediate alternative to their source of livelihood. It is time to walk the talk and undertake the following measures that will have a practical tangible impact on our lives. The EAC Secretariat, in partnership with the East African Business Council, the private Sector bodies across the partner states, relevant ministries and academic institutions, need to meet and establish a Dream Team of experts that will spearhead the incorporation of East African Development Corporation (EADC) as the investment arm of the EAC, owned fully and only, by the governments of the partner states. The EADC would be a holding company, with subsidiaries across the Community. Then it would draw up a five-year strategic plan for the gradual elimination of used textiles and leather goods, with specific target investments that would give hope to all of us about the good times ahead. Then, work with the respective EAC governments to establish EADC subsidiaries proportionately across the region, in public-private partnerships with national, regional and international investors. With our lower costs of production, we should attract world-established firms in the textile and leather sectors to manufacture, from here, for their markets and our home markets. The case of Ethiopia’s leather and other footwear industries is an instructive benchmark. We would need to establish a structured system of producing the essential fibres and other raw materials for the textile and leather industries. True, we do export raw cotton and hides, but would this be enough to sustain home factories? Or we shall need to import fibres, yarn and tanned leather? What capacity of synthetic fibre production shall we need? Pure natural fibre (cotton or silk) is no longer sufficient to meet textile manufacture needs, thus the current practice of mixing fibres: (‘65% polyester, 35 per cent cotton). Structured production shall be assured through producer cooperatives of the old days, where farmers get inputs and are assured of markets. The experience of silk mulberry growing by smallholder farmers in Rwanda is a success story to build on. In Uganda, for example, cotton production was structured under Bukedi Cooperative Union in the east, Lango Cooperative Union in the north, and Nyakatonzi Cooperative Union in the west. This last one is still soldiering on. The livestock sector for hides and skins needs a similar approach, with cooperative unions supervising production and primary marketing. There is need to spearhead investment in linked sectors to maximise vertical integration within the two sectors. Manufacturing of textile dyes and leather polishes, for example, will create jobs and ensure incomes essential for effective local demand of the produced goods. Also, there is need to study and exploit the provisions in international trade agreements and conventions that support the protection of domestic infant industries. This is essential to guard against retaliatory measures from our export markets, most of which are the origin of the target goods to be banned. Equally important is the need to establish an intra-Africa trade system across regional communities like COMESA, CEPGL, SADC, and ECOWAS/CEDEAO. By the end of 1992, data at the PTA/ZEP Bank indicated that the then PTA Zone could meet 80 per cent of its needs through intra-regional trade. What became of this potential? Then, we have got to work out a skill-development strategy for the textile, leather and linked sectors. The young energies hawking caguwa will need to be absorbed at the different stages of the production chain, from the farm to the wardrobe. Risk of replacing Caguwa with counterfeits Without concrete measures as suggested above, we risk replacing used clothes and leather with counterfeits, factory rejects and substandard synthetics. A visit to the central business districts of our capitals will attest to this: all manner of ‘new’ garments, shoes, handbags, belts, and related articles, from China, Thailand, Malaysia, flooding the shops. Actually one factor that has led to the growth of caguwa sector is that these items tend to be of a better quality than new ones from China and other Asian countries. To our leaders, please let us have a business unusual approach to this problem – that goes far beyond conference speeches. The author is a partner at Peers Consult Kampala and CET Consulting, Kigali. bukanga@yahoo.com

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Eliminating Caguwa: The buck stops with regional governments