The recent move by the Malawi Revenue Authority (MRA) to rescind its decision on hiking duty on second-hand clothes to $2.5 per kilogramme (kg) is attracting mixed views from members of the public with opponents saying the stance was retrogressive.
Banking and finance expert Misheck Essau holds that there is a need for national dialogue and more importantly some national action on the matter.
“Second-hand clothes are not just draining forex but putting hundreds of countrymen, women and youth out of jobs. Imports of these clothes are estimated to be in excess of $35 million per year. Add to this the fact that there are a lot of the youth that the agriculture sector can employ if we produced cotton to the levels that we once produced, of up to 500,000 metric tonnes (mt) in one year in the 80s instead of the current 10,000 mt per year in recent years.
“What if we just made the over 15 installed cotton ginneries work at least at 50 percent capacity in a year instead of being parked to deteriorate with rust? What if we were producing Zitenje for the entire Sadc and Comesa and Africa? Many friends in Africa already dress in African attire. The market is huge,” Essau said.
He added that the right economics is to show the citizens how no one will walk naked if second-hand clothes are banned and how more will be employed if the replace the same with local attire made here from cotton, yarn and garments.
“The business opportunities that so-called kaunjika brings will be multiplied in numbers never seen before. This is the economics that should be developed and practiced. I felt sorry for the tax collection agency that was put in a tight corner for the kaunjika economics that was not created by them,” Essau added. But in an earlier interview, tax expert Misheck Msiska said the reaction from the vendors was evident that the move by MRA was bad.
“There is no doubt that the move would have ripple effects on the income of vendors considering the levels of disposable income among Malawians. The necessary thing to do was to conduct careful consultations before the tax was introduced to avoid such incidents,” Msiska said.
