alexa Fashion and textile have grown entire economies, so what holds Kenya back? - Daily Nation

Fashion and textile have grown entire economies, so what holds Kenya back?

Monday March 16 2015

By BITANGE NDEMO
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This past week, I had the opportunity to participate in a brainstorming exercise organized by Ann McCreath of Kiko Romeo. The 20-odd participants were drawn together to suggest ways of developing the fashion industry in Kenya. 

In Ann’s brief presentation, one statistic by the African Cotton Textile Industries Federation (ACTIF) caught my attention. If 100 per cent value were added to the lint currently produced in Africa, it would translate into the creation of 9 million jobs for the continent’s textile industry. This galvanised me to retrace the history of the textile industry.

The Industrial Revolution in the Western world owed its rapid economic upsurge to the textile industry as do virtually all industrialised countries of Asia. The Asian economic giants are leveraging this sector to transform their living standards.

Just about all major economies have honed their industrial skills at the anvil of textile. This fundamental fact has eluded African countries. Instead, they are engaging more and more in the (ironically) multimillion-dollar mitumba (used clothes) businessThe rest of the world uses Africa as the dumping ground the dustbin of the world! It is an indignity that we are slowly beginning to accept with "dignity".

We are assaulted by dumping from the four winds: excess production (by manufacturers in China, Turkey, etc.); last season’s new clothes from Europe and the US that haven’t been offloaded in sales (retailers); and last season’s used clothes (customers). The clothes are sold at ridiculously low prices under the guise of “helping Africa”. 

The problem here is that we suffer double jeopardy, where we kill the local industry that provides employment, and also miss out on taxing new clothing that arrives in this country as used.

While this tax evasion may be music to a few, it undermines our economic growth, leading to higher taxation. Paradoxically, we are subsidising those countries that export textiles into Kenya.

Yet, there is a flicker of hope. Finally, textiles made in Kenya may become as competitive as mitumba and put to rest our longstanding shame of wearing used clothing from the rest of the world. 

FLIGHTS TO HANOI

The major obstacle to be overcome is the problem of perception that imported clothing, new or used, is of a higher quality than local products.

The fight against perception is beginning to take root at Gikomba, the capital of mitumba, where new local designs are emerging from new manufacturers. However, the few who are challenging the might of the global fashion houses lack training, exposure and other support systems to grow the industry.

Kisumu residents buy second-hand clothes
Kisumu residents buy second-hand clothes (mitumba) at the Kibuye market in January 2014. The clothes are still costly, beyond the reach of many Kenyans living below the poverty line. Industrialisation PS Wilson Songa has proposed a ban on mitumba to help revive the struggling textile industry. PHOTO | JACOB OWITI | NATION MEDIA GROUP

The global fashion industry is a serious business commanding $1.7 trillion per annum in revenue. In the United Kingdom alone, the industry is worth more than $500 billion and employs in excess of three million people. 

Vietnam, through its conglomerate Vinatex, increased its export turnover from $12 billion in 2010. It plans to increase exports to $18 billion in 2015, a sustained growth of 15 percent and an export turnover of $25 billion (equivalent to 50 per cent of Kenya’s current GDP) by 2020.

It is for that reason that Kenya Airways started direct flights to Hanoi, the capital of Vietnam. Maina Kageni, in his daily morning show, promotes Hanoi as a new honeymoon destination, and a place where you can buy cheap clothes and shoes.

Correspondingly, Kenya Airways should be promoting Kenya in a similar fashion, but this does not happen. To our shame as Africa, when one travels east, only South African Airlines promotes authentic African creations.

If we had developed fashion design houses, we could have laid claim on Kikoy and Kitenge for developing an African product that can be promoted worldwide.

By now, Kenyans should be familiar with, and even take for granted, the story of Information and Communications Technologies (ICTs) development in Kenya, where the government went against the grain and deliberately took risks to develop the sector. 

Similarly, we must be willing to take the risk to build the textile industry value chain and explain to the public how they can exploit emerging opportunities. We should develop fashion design schools and give incentives to upcoming designers. 

USING AGOA

Further, the sector could benefit from deliberate policy interventions, comprehensive market research, building brands for manufacturers to retailers, using technology to revolutionise the entire value chain with heightened hype, developing a sector-wide think tank to provide support, and the creation of unique value propositions specific to the African market.

In as much as we seek support from the government, we must get down to work and do our bit as well. The American Growth Opportunities Act (AGOA), for instance, remains unexploited.

Its objectives of facilitating trade between the United States and the African continent as a vehicle to alleviate poverty, increase economic progress and create stronger markets in Africa are unmet. It also aimed to reform old economies by creating new incentives for good governance, sustained business enterprises and investment and job creation, but this too is a distant cry from what AGOA envisaged.

As America developed its AGOA objectives, Africa did nothing to optimally use the provision to develop core capacities to exploit internal markets and increase intra-African trade. 

The remaining few years should be used to develop local brands for the African markets by shifting manufacturing from expensive urban centres to rural towns to enhance competitiveness and to rid ourselves of the yoke of used clothing. 

Table 1 below shows Africa’s paltry exports to America under AGOA that compare miserably with similar countries in the Far East. Vietnam alone exports more textiles to the USA than Africa combined, yet Africa has the greatest land reserves for growing cotton. 

Table 1: January to December 2014 textile and
Table 1: January to December 2014 textile and apparel exports to the United States under AGOA

We have no choice but to see what is beyond the horizon. No one has critically analysed the impact of the growing expansion of malls throughout Africa. If we have no idea of the new spaces, someone will fill the gap. 

That someone is going to be the global supply chains. Once they are here, especially from high income, they themselves will shut down mitumba and force us into buying their excess stock. 

We therefore must quickly develop many distribution networks or markets (permanent and mobile), assist mitumba sellers to transition to selling new clothes, and ask the government to designate an arty and pleasant Fashion District with lower rents. We can benchmark with Maboneng in Johannesburg, which was a rundown area that was revamped to house fashion designers.

It would be even better if Kenya were to develop a Fashion & Design Council that serves as the link of government to the design sector. The main objective would be to fundraise, organise shows and exhibitions, sponsor designers to train and improve their knowledge, conduct market research, and provide PR services. 

This also can be linked to the Tourism Board to integrate the promotion of Kenyan fashion and design into its strategy.

We must then link all these initiatives to private sector initiatives such as Equity Bank’s Vijana na Equity, an innovative project that aims to nurture the youth and transform their dreams of being entrepreneurs in the creative scene.

COTTON FROM EGYPT

Since the bank has set aside Sh100 million for this purpose, it should expand its training into a regional Fashion School that will see future designers take the market by storm.

In Kenya, the Export Processing Zone has a developed apparel industry, where the big design houses get their garments produced locally because of cheaper labour.

However, the cotton used comes from Egypt and other destinations because we don’t or can’t produce the required quantities. Individual efforts like that of Beatrice Obara are growing cotton and bringing back to life once-vibrant trade in Nyanza.

Industrialisation and Enterprise Cabinet
Industrialisation and Enterprise Cabinet Secretary Adan Mohamed (centre) visits Rivatex East Africa Limited in Eldoret Town on April 9, 2014. Mr Mohamed said the high cost of electricity and an inadequate supply of cotton are slowing down the growth of textiles in the country. PHOTO | JARED NYATAYA | NATION MEDIA GROUP

It is self-evident that we can create a vibrant cotton industry especially now when technology has improved seed quality. It must be remembered that we had thriving textile industries Kicomi, Rivatex, Raymonds that held their own in global markets. We can do it again.

We must begin to grow the textile value chain now and create opportunities for cotton growers, as well as attract investments into processing and ultimately support the growth of the fashion industry in Africa. 

We can choose to create new opportunities on our own terms, or wait until we are dictated to by someone else. We must leverage on Equity Bank’s generosity and seek the government’s intervention to develop deliberate policies to grow the sector.

The writer is an associate professor at University of Nairobi’s Business School. Thanks to Ann McCreath of KikoRomeo for supplying some of the data used herein. Twitter: @bantigito.