Capital FM (Nairobi)

28 November 2012

Kenya: Mitumbas Face Likely Ban If Proposals Sails

Second hand clothes and shoes will be banned from Kenya should proposals contained in Sessional Paper Number 9 of 2012 go through, come January next year.

The Sessional Paper, which has already been approved by the Cabinet and now before Parliament, is meant to protect the textile and leather industries.

Industrialisation Permanent Secretary Karanja Kibicho says this is a move by government to create a market for local traders and manufacturers.

"These are used clothes meant to help the poor but are used as a trading tool. We are trying to strengthen the issue of counterfeit and standards especially at the points of entry. We know it is a tall order because the players are not small guys," he said.

In his Budget Policy Statement in June, Finance Minister Njeru Githae directed the Kenya Revenue Authority to revert to the lower charge per container of imported second hand clothes to Sh1.1 million on a 20-foot container.

The second-hand clothes market popularly known as 'mitumba' employs thousands of people most of whom are youths.

The industrialisation policy also seeks to ban the export of leather and place a two percent levy on imported leather products, clothes and shoes that will go to supporting local traders.

The Ministry of Industrialisation is also proposing to have the threshold of local content raised to 70 percent to ensure the country benefits from development projects in the form of capital and skilled labour.

"Most of the projects are construction. So if a project is Sh100 billion that will mean Sh70 billion must be left in Kenya. We are saying that by the end of the project the people leading it must be Kenyans," Kibicho explained.

The ministry has however made efforts to revive various sectors namely cotton, coffee, leather and pyrethrum over the last few years.

In collaboration with the World Bank (WB) as the financier and managed by auditing firm Deloitte, the Industrialisation Ministry organized a pilot funding program aimed at assisting the four sectors increase in revenue, output and create marketing links for the commodities.

Between 2006 and 2011 the WB injected $6 million in the sectors through a Value Chain Based Matching Grant Fund Program.

As a result, coffee production under the program went up by 48 percent, while under the 'cotton to garment' pilot projects, cotton production increased from under 100 kilograms to 3,000kg per acre.

The program findings also show that over the seven-year period of the program, the price of coffee per kg rose from Sh6 in 2005 to between Sh72 and Sh85 by 2011.

Sales revenue for coffee went up by over 50 percent and income per farmer rising by 348 percent from $105 in 2006 to $460 by 2011.

Over the same period, cotton prices also rose from Sh22 to Sh65 per kilogram.

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