Socio-Economic Contribution of Second-Hand Clothing Underexplored; Sector Contributed Billions to EU27+ and 3 African Economies

SOCIO-ECONOMIC IMPACT IN GHANA, KENYA, AND MOZAMBIQUE: The socioeconomic impact of SHC trade between the EU27+ and Ghana, Kenya, and Mozambique also generated substantial economic impacts in the three African countries.

• In Ghana, the direct economic impact was substantial, with an estimated contribution of $35 million to the country's GDP in 2023. This impact is primarily driven by salaries and wages paid to employees, accounting for 71% of the direct GDP contribution. The industry also created approximately 14,000 formal jobs through the import of SHC from the EU27+.
• Similarly, the SHC trade between Kenya and the EU27+ provided a direct GDP contribution of around $9.2 million and supported approximately 3,600 formal jobs.
• In Mozambique, there was a direct GDP contribution of $2.7 million, driven largely by high salaries and wages paid to the industry's employees. The industry also created about 1,000 formal jobs within the SHC sector by importing used clothes from the EU27+.

HUGE IMPACT IN AFRICAN COUNTRIES: The total economic impact of EU27+ SHC imports in the three African countries studied extends beyond direct contributions by stimulating economic activities through supply chain and wage-funded consumption spending.

• In Ghana, the total socioeconomic contribution of these imports across all three channels of impact was approximately $76 million and 22,000 formal jobs. Consequently, the industry stimulated a GDP multiplier effect of 2.2, with each Dollar in GVA generating an additional $1.20 elsewhere in the economy. Similar patterns were observed in Kenya and Mozambique, where the SHC trade with the EU27+ stimulated GVA of $24 million and 6,300 formal jobs in Kenya, and €11 million in GVA and 5,700 formal jobs in Mozambique.
• The SHC trade with the EU27+ generated jobs for 43,000, 68,000, and 15,000 informal workers in the SHC industries in Ghana, Kenya, and Mozambique, respectively.
• Next to those working directly for SHC wholesalers and retailers, this includes employment opportunities for ancillary workers such as unloaders or transporters working within the sector.
• The informal industry supports several opportunities for women and youth. For example, 77% of the interviewed informal retailers in Ghana, Kenya, and Mozambique were women, and approximately 70% younger than 45 years old.
• The quality and consistency of jobs can vary depending on the formality of the employment and the country. Most of the interviewed traders reported relying on SHC trade as their sole source of income. While the formal industry enables full-time workers to earn “living wages” within Ghana, Kenya, and Mozambique, the employment provided by informal traders is characterised by low wages, as several informal traders reported that their workers also rely on other sources of income.
• One of the leading social benefits of the SHC industry is that it allows for affordable access to quality clothing. The affordability of SHC is the leading source of the growing demand—especially as quality is reported to be higher than of comparably cheap, newly produced clothing. However, the ultimate disposal of used clothing items after being worn in importing countries raises concerns regarding the environmental impact of the industry in importing countries.
• Even though only a relatively small fraction of SHC imports can be considered waste (around 4%), this still amounts to a non-negligible absolute amount of waste due to the high volume of overall imports.
• As a result, countries importing SHC are often not equipped to handle any accruing waste when relying on their inadequate waste management infrastructure. While this is largely an issue resulting from lacking infrastructure—and does not only affect SHC but all industries and waste streams—it does affect the SHC traders’ ability to properly dispose of possible textile waste.