i

CATHOLIC UNIVERSITY COLLEGE OF GHANA, FIAPRE

FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION

ASSESSMENT OF THE EFFECTS OF SECOND HAND CLOTHING ON THE

PERFORMANCE OF THE GHANAIAN TEXTILE INDUSTRY: THE CASE OF

LOCAL CLOTHING INDUSTRY IN THE SUNYANI – EAST MUNICIPALITY

BY

DEBORAH OLAWUNMI OJEIFO

A LONG ESSAY SUBMITTED TO THE FACULTY OF ECONOMICS AND

BUSINESS ADMINISTRATION IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE AWARD OF BACHELOR OF SCIENCE

DEGREE IN ECONOMICS AND BUSINESS ADMINISTRATION

JUNE, 2015

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DECLARATION

CANDIDATE’S DECLARATION

I, Deborah OlawunmiOjeifo, hereby declare that, this research work is the result of my

own original research, in spite of references made to other related literature prepared by

other people. This piece has not been presented for an award of any certificate in this

university or elsewhere.

Candidate‟s Name: Deborah OlawunmiOjeifo

Signature:……………………………………Date:………………………………

SUPERVISOR’S DECLARATION

I, Msgr. Seth OseiAgyemang, hereby declare that, the preparation and presentation of this

research work was supervised in accordance with the guidelines on supervision of

research work laid down by the regulations of the Catholic University College of Ghana,

Fiapre.

Supervisor‟s Name: Msgr. Seth OseiAgyemang

Signature:…………………………………………Date:……………………………

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ACKNOWLEDGEMENT

I would want to acknowledge the Almighty God for the grace given me in the course of

the study. I wish to express my heartfelt gratitude to all my lecturers at the Faculty of

Economic and Business Administration most especially my supervisor, Msgr. Seth

OseiAgyemang for the pains in taking me through my research work. God bless you all.

To all my friends, course mates and relatives I say thank you for being there for me

through my studies and the conduct of the study.

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DEDICATION

I dedicate this research to The Almighty God, the Ojeifo Family for guiding and

providing for me throughout my course especially my parents Mr. Dare Lewis Ojeifo and

Mrs. Flora Ojeifo and also my wonderful siblings MifuelayoOjeifo,EguarojeOjeifo,

David Ojezele, Joshua Ojezele and Daniel Sado Denis. I am also very grateful for the

support from my friends Yaw Baah-Nuakoh and IfetoluwaboriAkerele.

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TABLE OF CONTENT

TITLE PAGE ..................................................................................................................... i

DECLARATION............................................................................................................... ii

ACKNOWLEDGEMENT ............................................................................................... iii

DEDICATION.................................................................................................................. iv

TABLE OF CONTENT .................................................................................................... v

LIST OF TABLES ......................................................................................................... viii

LIST OF FIGURES ......................................................................................................... ix

ABBREVIATIONS ........................................................................................................... x

ABSTRACT ..................................................................................................................... xii

CHAPTER ONE: INTRODUCTION ............................................................................. 1

1.1Background of the Study ............................................................................................... 1

1.2Statement of the Problem ............................................................................................... 4

1.3Research Objectives ....................................................................................................... 6

1.3.1General Objective ....................................................................................................... 6

1.3.2Specific Objectives ..................................................................................................... 6

1.4Research Questions ........................................................................................................ 6

1.5Significance and Justification of the Study .................................................................... 7

1.6Scope and Limitation of the Study................................................................................. 7

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1.7Organisation of the Study .............................................................................................. 8

CHAPTER TWO: LITERATURE REVIEW ................................................................ 9

2.1Introduction .................................................................................................................... 9

2.2The Global Textile Industry ........................................................................................... 9

2.3The Ghanaian Textile Industry in Perspective ............................................................. 10

2.4Effects of Foreign Textiles on the Local Economy ..................................................... 13

2.5Preference for Local or Foreign Textile....................................................................... 17

2.6Conclusion ................................................................................................................... 19

CHAPTER THREE: METHODOLOGY .................................................................... 21

3.0Introduction .................................................................................................................. 21

3.1 Background of the Study Area ........................................................................... 21

3.2 Study Design and Type ...................................................................................... 22

3.3Study Population ...................................................................................................... 23

3.4 Sampling Techniques and Sample size .............................................................. 24

3.5 Data Collection Methods and Tools ................................................................... 24

3.6 Data Analysis Method ........................................................................................ 25

3.7Limitations of the Study ........................................................................................... 25

3.8Ethical Considerations.............................................................................................. 26

CHAPTER FOUR: ANALYSIS AND DISCUSSION OF RESULTS ....................... 26

4.1 Introduction ........................................................................................................ 27

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4.2 Presentation of Results ....................................................................................... 27

4.2.1Personal Characteristics ..................................................................................... 27

4.2.3Perception of the General Population, who Purchases cloths towards second

hand clothing ............................................................................................................. 30

4.2.4Reasons that Influences Preference for local textile to Second-hand clothing31

4.2.5Effect of Second Hand Clothing on Local Textile Industry .............................. 33

4.3 Discussion of Results ......................................................................................... 34

4.3.1 Personal Characteristics .............................................................................. 34

4.3.2 Perception of the General Population, who Purchases cloths towards second

hand clothing ............................................................................................................. 35

4.3.3 Preference of the General Population for Second Hand to Local Clothing 35

4.3.4 Reasons that Influences Preferences for local textile to second-hand

clothing ..................................................................................................................... 36

4.3.5 Effect of Second Hand Clothing on Local Textile Industry ....................... 37

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECCOMMENDATIONS 39

5.1 Introduction ........................................................................................................ 39

5.3 Conclusion .......................................................................................................... 40

5.4 Recommendations .............................................................................................. 41

REFERENCE .................................................................................................................. 42

APPENDIX ...................................................................................................................48

viii

LIST OF TABLES

Page

Table 1: Personal Characteristics of Students ................................................................... 27

Table 2: Perception of Second Hand Clothes ................................................................... 30

Table 3: Foreign Textiles are causing the Collapse of Local Industries ........................... 33

Table 4: Importation of Second Hand Clothing Has Caused Loss of Jobs ....................... 33

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LIST OF FIGURES

Page

Figure 1: Preference for Local and Foreign Textiles ........................................................ 29

Figure 2: Strong Patriotism as an influence for local textiles ........................................... 31

Figure 3: National Pride as a Reason for Patronising Local Textiles ............................... 32

Figure 4: Consumer Ethnocentrism as a Reason for Preferring Local Textile .................32

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ABBREVIATIONS

AGOA African Growth and Opportunity Act

CMT Cut, Make and Trim

EMS Express Mail Services

GDP Gross Domestic Product

ISI Import Substitution Industrialization

MFA Multi Fibre Agreements

MPCU Municipal Planning Coordinating Unit

NHIL National Health Insurance Levy

OEM Original Equipment Manufacturing

RTA Regional Trade Agreement

SAPs Structural Adjustment Policies

SHC Second-hand clothing

SOEs State-Owned Enterprises

SPSS Statistical Package for Social Sciences

SSA Sub-Saharan Africa

T&C Textile and Clothing

xi

VAT Value Added Tax

WTO World Trade Organization

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ABSTRACT

The study was conducted in the Sunyani municipality with the general objective of

assessing the effects of importing second hand clothing on the local clothing industry in

the Sunyani municipality. The study adopted a cross section study design. Data was

collected on a sample size of 200 respondents with the aid of questionnaires and the

statistical package for social science analysis software was used in analysing the data.

From the results of the study the study can make the following conclusions. The fact is

that most of the respondents preferred second hand clothing to the local textiles. This was

as a result of it being perceived to be cheap, stylish, durable and with popular designers

among others. People who patronized local textiles did so mainly based on some form of

a sense of pride. The second hand clothing industries have caused the collapse of local

textile businesses and many have lost their jobs coupled with the fact that the low quality

of local textiles is exposed. Further studies can be conducted from the perspective of the

local textile companies. This should be done to identify their prospects as well as the

challenges they face in their operations in the wake of second hand clothing competition.

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CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

Despite several trade initiatives, textile exports have not improved while imports have

surged more than before. As a result of trade liberalization, protection granted to the

industry was removed and the sector was exposed to intense competition that led to

notable decline in production and closure of some of the firms. There has been declined

in production had notable effects on the labour markets in three aspects. There is marked

decrease in labour demand and hence low level of formal employment and wages, given

cut in production and factory closures (IPP Media, 2007).

The total global trade in textiles and clothing is worth more than $200 billion each year.

The Second Hand Cloth (SHC) trade has grown ten-fold since 1990 but, at roughly $1

billion per year, still represents less than 0.5per cent of this total in value terms (Field,

2000).In volume terms the proportion is higher, since SHC sells at around 10–20 per cent

of the price of new clothes, but it still comprises less than 5 per cent of the total global

trade. However, this proportion varies considerably according to the receiving country

(Baden & Barber, 2005).

The international textiles and apparel trade has been one of the most contentious trade

issues between the developed and developing countries. Restrictions have been imposed

in terms of quota and tariffs on imports since the 1950s. In January 2005, after the

phasing out of the multi fire arrangement, the quantitative restrictions will be removed,

allowing for free competition between countries for market access. The biggest share of

the market will be occupied by countries having a competitive advantage in terms of cost,

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product quality, responsiveness to market requirements and manufacturing flexibility.

Developing economies in the African region which will have to adapt to new market

conditions for sustained competitiveness; failing to do so will force them out of the

market (Hurreeram& Little, 2004).

Almost all countries are involved in the trade, either as exporters, processors and re-

exporters, or importers, with some countries playing more than one role. Developing

countries are the major consumers of second-hand clothing. It should be noted that the

SHC industry in exporting countries is considered by some commentators to be in

difficulties (Textile Recycling Association, 2005).This is largely attributed to the rise in

cheap but lower-quality new clothing imported from Asia.

However, in relative terms, the trade hashada very positive impactonpoverty alleviation

during thecurrentharsheconomic climate. At the present time, theKenyaneconomy for

instance isnotcapable of providing substitute jobsforthe unemployedor alternative

clothingthatisaffordable tothemassof the population. In contrast, the second-hand

andclothingtrade issoakinguplabour andofferingconsumersacheaperclothingalternative

inthe face ofincreasingpoverty, decliningrealwagesandrisingunemployment.Ifthe

Europeantextile recycling trade were todecline,the poverty alleviating nature of

thetradewouldalsodiminish (Baden & Barber, 2005).

In the attempt to regulate the influx of SHC into the country in order to create some form

of competition, working through the International Trade Centre, the Swiss Government in

partnership with Ghana‟s Trade Ministry have provided a USD$3.5 million grant, which

will be used to support young Ghanaian entrepreneurs within the local fabric and fashion

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industry. Delivered through the Ethical Fashion Initiative Ghana Project, the funds are

intended to help recipients expand their businesses and become more self-reliant; produce

goods that can increase competitiveness in international markets, in the process fuelling

job creation; and establish sustainable supply chains within the industry (Vibe Ghana,

2012).

This initiative recognizes the effects that trade liberalization have had on the economy at

all levels including the textile industry. When textile trade liberalization factors are

combined with the exchange rate losses suffered by many firms and the increasingly high

cost of credit, it is clear that local firms were unable to adjust properly and promptly to

face external competition. The result was that many local firms, especially small and

medium-sized enterprises, went out of business (Britwum, et al., 2001).

The decline in Ghana‟s manufacturing sector is reflected in the decline of its share in

GDP and of its contribution to employment, compared to the growing preponderance of

the service sector. Many local firms remain unable to gain access to capital, technology

and managerial expertise and continue, therefore, to face unfair competition. It is

believed that some firms that survived only did so by becoming capital intensive.

Furthermore, the cessation of support for state-owned enterprises (SOEs) and their

eventual divestiture or liquidation cannot be justified in all cases on grounds other than

those of ideology. 17 The manufacturing sector, which adds value to goods, is crucial for

enhancing the international competitiveness of countries. Therefore, the perceived demise

of the local manufacturing sector in Ghana especially firms in the medium-scale

category, which is crucial for employment creation and innovation, is a matter of great

concern (Britwum, et al., 2001).

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In the aftermath of liberalization effects, production in the textile sector has become less

labour intensive due to increased reliance on automated and computerized technology.

After trade liberalization the textile sector is characterized by frequent industrial disputes

and labour unrests indicating that industrial organization issues are important in gauging

the poverty reduction impacts. There winners and losers in the textile sector after

liberalization. This can be examined on how liberalization affects the different agents in

the supply chain. These agents include cotton farmers, transporters, ginneries, textile

factories, workers and the government. Cotton farmers for instance are mostly net losers

from liberalization and victims of poverty (IPP Media, 2007).

1.2 Statement of the Problem

Although countless researches have been done in this regard, surprisingly, the impact of

the SHC trade is less clear-cut on employment in developing countries than it is on

consumption. On one hand, the increase in SHC imports is often held responsible for the

decline of domestic textile and/or clothing production. On the other, the SHC trade

generates employment as people repair and distribute clothing. Impact on domestic

production Industry organizations and individual businesses frequently cite increased

SHC imports as destructive to local livelihoods. For example, Neil Kearney, General

Secretary of the International Textile, Garment and Leather Workers‟ Federation, says

that „unable to compete, local industries are collapsing, leaving hundreds of thousands of

workers jobless‟ (ITGLWF, 2003). The actually effect of SHC on the economy is not

clear cut.

To critics, the business raises the perennial problem of how Africa can build its own

industry when it is flooded with cheap imports. While players in the market frequently

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blame SHC for the decline in their fortunes, the authors of studies on the sector are

somewhat more circumspect in their conclusions. Hansen (1995; 1999; and 2000) and

Field (2000) suggest that the decline of textile and clothing companies in

ZimbabweandZambia has been primarily due to structural adjustment policies (SAPs).

While second-hand clothing represents only a very small proportion of the global

clothing trade, it represents more than 30 % of imports and over 50% by volume of

clothing imports too many sub-Saharan countries. At the crux of the issue is the

determination regarding if local garment industries are damaged by the import of cheap

used clothing from developed nations. Ultimately this is an issue that is championed by

textile trade associations on behalf of member companies and one addressed by trade

policy internationally and one that affects export prospects going forward for the garment

recycling industry participants.

One cannot help but ask what is the actual effect of SHC on the operations of the textile

industry and the economy? The paragraphs above seem to suggest that the effects of

second hand clothing on the local clothing industry is not clearly defined especially when

compared to the macro and micro economic benefits that it presents. This study would

want to assess the impact of second hand clothing on the local clothing industry in the

Sunyani municipality, which seems to been an avenue of second hand clothing in recent

years. This will be done by collecting data from members of the general public who

purchase cloths at various places in the municipality. To get the perspective of the

industry players, those who sell cloths in the municipality too would be included.

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1.3 Research Objectives

1.3.1 General Objective

The general objective of the study is to assess the effects of importing second hand

clothing on the local clothing industry in the Sunyani municipality.

1.3.2 Specific Objectives

1. To examine the perception of the general population, who purchases cloths,

towards second hand clothing in the municipality

2. To assess the preference of the general population, who purchases cloths, for

second hand and local clothing in the municipality

3. To examine the reasons that influences the preference for second hand and local

clothing in the municipality

4. To identify the effect the second hand clothing on local clothing industry in the

municipality

5. To identify some of the measures that can be put in place to ensure that the local

textile industry does not collapse completely as a result of SHC.

1.4 Research Questions

The general research question is to identify the effects of importing second hand clothing

on the local clothing industry in the Sunyani municipality.

In order to address the objectives of the study, the researcher seeks to answer these

questions:

1. What is the perception of the general population , who purchases cloths, towards

second hand clothing in the municipality

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2. What is the preference of the general population, who purchases cloths, for

second hand and local clothing in the municipality

3. What are the reasons that influences the preference for second hand and local

clothing in the municipality

4. What are the effect the second hand clothing on local clothing industry in the

municipality

5. What are some of the measures that can be put in place to ensure that the local

textile industry does not collapse completely as a result of SHC?

1.5 Significance and Justification of the Study

The introductory notes to the study pointed out that there is some form of gap in terms of

the literature available on the actual effect of SHC on the operations of stakeholders in

the textile industry. The results can serve as a body of knowledge, reference or

educational material for textile students, lecturers and other researchers on the challenges

and prospects of the textile industry in Africa. This study will also offer policy makers

and implementers an empirical data on the possible challenges and prospects that the

second hand clothing presents in the municipality.

1.6 Scope and Limitation of the Study

The scope of the study geographically is the Sunyani municipality. The study is limited to

those present at the time of the study. The concept that would shape the entire study

would be related to the personal characteristics of the respondents which include their

income status, educational background, occupation and age among others. How these are

related to the patronage of second hand and local clothing would be looked at. Issues with

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perceived quality, social class classification of clothes, factors that accounts for patronage

from the individual as well as economic perspectives would be assessed.

1.7 Organisation of the Study

The study is will be organised into five (5) chapters. Chapter one: provides the

introduction that includes background statement, problem statement, justification,

objectives, scope, significance, and the organisation of the study. The Chapter two:

presents literature on the areas captured under the objectives of the research. This

includes perceptions of SHC, preference for local and foreign cloths, reasons that

accounts for the preferences for the two types of clothing lines and the effect of SHC on

the local textile industry. Chapter three: deals with the methods applied in the study.

Chapter four: presents the study findings and their interpretation; while chapter five has

conclusions and policy indicators.

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CHAPTTER TWO: LITERATURE REVIEW

2.1 Introduction

This chapter of the project reviews literatures that are relevant to the issue of local and

foreign textiles. The review was done with literature from online sources like peer review

journals, books and articles. The data were both theoretical and empirical in nature. These

were grouped under the various necessary thematic perspectives to the study.

2.2 The Global Textile Industry

The clothing industry is labour-intensive and it offers entry-level jobs for unskilled labour

in developed as well as developing countries. Job creation in the sector has been

particularly strong for women in poor countries, who previously had no income

opportunities other than the household or the informal sector (Nordau, 2003). Moreover,

it is a sector where relatively modern technology can be adopted even in poor countries at

relatively low investment costs. These technological features of the industry have made it

suitable as the first rung on the industrialization ladder in poor countries, some of which

have experienced a very high output growth rate in the sector (e.g. Bangladesh, Sri

Lanka, Viet Nam and Mauritius).

These characteristics, however, have also made it a footloose industry that is able to

adjust to changing market conditions quickly. At the same time, the textile and clothing

industry has high-value added segments where design, research and development (R&D)

are important competitive factors (OECD, 2004; Nordås, 2003). Thus the textiles and

clothing (T&C) comprise a unique industry in the global economy mainly for three broad

reasons. First, apparel production is a springboard for national development, and often is

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the typical starter industry for countries engaged in export-oriented industrialization

(Adhikari, & Yamamoto, 2007; Gereffi, & Frederick, 2010).

Second, this industry has very low entry barriers due to its low fixed costs and emphasis

on labour-intensive manufacturing (Naumann, 2006; Gereffi,& Frederick, 2010).Third,

this industry is the most protected of all manufacturing industries in the global economy,

both in developed and developing countries. Protectionist interests have been extremely

ingenious in creating new protectionist instruments in the past 50 years (Adhikari, &

Yamamoto, 2007; Naumann, 2006).

2.3 The Ghanaian Textile Industry in Perspective

Production and Textile Imports Ghana‟s textile industry is mainly concerned with the

production of fabrics for use by the Garment industry and also for the export market. The

sub-sector is predominantly cotton-based although the production of man-made fibres is

also undertaken on a small scale. The main cotton-based textile products include: African

prints (wax, java, fancy, bed sheets, and school uniforms) and household fabrics (curtain

materials, kitchen napkins, diapers and towels). These products form the core of the sub-

sector. The main products of the man-made fibres (synthetics) and their blends include:

uniforms, knitted blouses, socks etc. These are mainly made from polyester, acrylic and

other synthetics. There are also a number of small firms hand-printing their designs onto

bleached cotton fabrics, also known as tie and dye or batik cloth. Also, traditional or

indigenous textiles such as Kente cloth (traditional woven fabric), Adinkra cloth

(traditional hand printing fabric) and other types of woven fabrics used for various

purposes such as smock making etc. are proposed. Total industry output peaked at 129

million yards in 1977 with capacity utilization rate of about 60 %. GTP maintained the

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lead in the industry with an annual production of 30.7 million yards (includes the outputs

of Juapong and Tema plants). This was followed by GTMC, ATL, and Printex with

production levels of 15 million, 13 million and 6 million yards respectively.

Unfortunately, total industry output declined from its 1970 level to 46 million yards in

1995 but recovered to 65 million yards in 2005. As at March 2005, GTP was producing 9

million yards, ATL 18 million yards GTMC 2.24 million yards and Printex 9.84 million

yards. A total annual output of 39.04 million yards was produced by the industry as at

March 2005, which translates to an average of 49.4% of initially installed capacity of the

four firms. Thus output had declined from 65 million yards in 2000 to 39 million yards in

2005.

Nearly two decades after independence, the textile sub-sector was the major key player in

Ghana‟s industrial sector, contributing significantly to employment and growth in the

economy. However, the sub-sector which was once the leader in Ghana‟s industrial sector

has undergone a considerable decline over the years due largely to the liberalization

program which made it almost impossible for Ghana‟s textile products to compete with

the cheap imports, particularly from Asia. Textile exports are an important source of

foreign exchange and revenue to textile manufacturing firms (Quartey, 2006).The

adoption of import substitution industrialization in the 1960s and 1970s saw the

establishment of many textile manufacturing companies such as Akosombo Textile

Limited (ATL) and Ghana Textile Product (GTP). However, a shortage of foreign

exchange to purchase raw materials needed in production saw the collapse of many of

these companies. This resulted in an influx of cheaper textile imports. Currently, these

fabrics largely tend to be good imitations of the original products of local manufacturers,

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which make them desirable to the average Ghanaian (Quartey, 2006).Textile exports

generated $ 27.2 million dollars in 1992 and this increased to $ 179.7 million in 1994 but

revenue from exports declined consistently thereafter and by 1998 they had fallen to US $

3.173 million (Egu, 2009; Quartey, 2006).

Ghana‟s post independent ISI policy and its membership of the multilateral trading

system, both to a larger extent; have been the onerous genesis of the current problems

face by the T & C sector in Ghana. The one major problem identified with the sector,

especially under WTO‟s agreement of textile and clothing (ATC) regulating regime, has

been the China factor, which is characterized by influx of imitated and substandard textile

products on the Ghanaian market. ATC ended the 40 years of quota system under multi-

fibre arrangement (MFA); the latter regime witnessed the fragmentation of textile and

clothing production to countries that did not have the comparative advantage and the

efficiency.

The MFA again, kept the low-cost producers (least developed countries) of the textile and

clothing production sector in its embryonic stage; assembly/cut, make and trim (CMT) of

the international production system (see Exhibit 5in appendix for the stages of upgrading

in the apparel value chain) which, according to Gereffi‟s “buyer-driven” commodity

chain concept could not gain in the global textile and clothing supply chain. There is no

doubt that China is the greatest beneficiary of the end of the MFA quota regime (Morris,

2006). Few countries are able to compete against it on price as is evident from the fact

that its exports of clothing have already increased to approximately a quarter of the world

total since it joined the WTO in 2001 (de Janquieres, 2004 as cited by Morris, 2006).

13

For over two decades after ISI was started, the textile sub-sector dominated the

manufacturing sector and contributed significantly to livelihood. African wax prints

produced by these companies were in high demand on the Ghanaian market for making

traditional apparels like “kaba and slit” and other exquisite Africa wears (Egu, 2009). It

employed about 25,000 of the labour force, accounted for 27% of total manufacturing

employment and operated at about 60% of plant capacity (MOTI, 2004 as cited in

Quartey, 2006). The textile and clothing products were and still are uncompetitive in the

global market especially for those countries (Latin America and SSA) who adopted the

dependency and structuralism theory of the ISI policy (Schmitz, 1984; Ajei, 2007).

The indiscriminate nature of the policy led to the development of deeply inefficient and

high cost industries to successfully compete with their counter parts, China and other

Asian countries who adopted export-oriented ISI policy. The influx of imitated and

substandard products and the stiff competition from China could be solved by the

government of Ghana application of the Safeguards provision in WTO as a “political”

instrument to relieve pressure on government by Trade Unions and also as a measure to

restore “efficiency” to domestic industries (Ghori 2010). The theory rationale behind the

latter especially, is that safeguards provide time for local industries to raise investments

in order to improve their competitiveness (Ghori, 2010).

2.4 Effects of Foreign Textiles on the Local Economy

In an integrated world economy, no single country can be analysed in isolation from the

world-wide regime. This is true not only because countries engage in trade but because

there are many regulating regimes at multilateral and/regional levels, constraining

nations‟ trade and economic policies both legally and practically. Since the beginning of

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the last decade, Regional Trade Agreements (RTAs) have become an important feature of

the global trading regime, imposing major changes in the international trade structure.

Hence, national strategies and policies cannot be discussed independently of the

prevailing global geopolitical regime (Monte, &Memis, 2006).

In the 21st century of global challenges in all hemisphere of life, the innovations and

dynamism in the fashion industry cannot be over emphasized. A great competition is

therefore set among fashion industries in the developed and the under developed world

causing most vulnerable local industries to collapse. The fashion industry of Ghana is not

exempted in this regard with the independent fashion designers being the most affected.

Their businesses have been crippled by the influx of foreign clothes and textiles on the

Ghanaian market on the ticket of Trade Liberalization in the global front. It is an arguable

fact that the liberal trade in the global world has had a negative impact on the local

fashion industries. In order to sustain the businesses of the local designers, the local

industrialists have the hope that the ban of unnecessary importation of foreign clothes and

textiles, especially the second-hand types, can go a long way to revive the clothing and

textiles sub-sector (Sarpong, et al., 2011).

This is arguably not realistic as Ghana is a member of WTO whose policies encourage

liberal trade and frown on protectionism. What Ghana ought to do is to device means of

improving the skill and competency base of its fashion producers to make them efficient,

experts, and result oriented, and to be abreast with modern technology in fashion. Whiles

doing this, the government must equip and develop the sub-sector to be viable by

resourcing the independent fashion producers financially to enable them acquire modern

15

and efficient fashion machinery so as to produce quality garments to meet international

standards (Sarpong, et al., 2011).

For over two decades after ISI was started, the textile sub-sector dominated the

manufacturing sector and contributed significantly to livelihood. It employed about

25,000 of the labour force, accounted for 27% of total manufacturing employment and

operated at about 60% of plant capacity (MOTI, 2004). The textile sub-sector has also

been an important source of foreign exchange in Ghana.

Ghana‟s textile industry employed some 25,000 people and accounted for 27 % of total

manufacturing employment in 1977. However by 1995, employment within the sub-

sector had declined to a mere 7,000 declining further to 5000 by the year 2000. As the

situation continues to deteriorate, employment continues to decline; as at March 2005 the

four major textile companies in Ghana employed a mere 2961 persons. A survey of 40

textile and garments industries in 2005 also confirmed that the situation is getting worse.

Ghana‟s current trade policy, which aims at promoting accelerated economic

development and reducing poverty, supports two parallel strategies, namely, export-led

industrialization and domestic market-led industrialization based on import competition.

The success of both strategies depends on the competitiveness of local producers in both

the domestic and international markets. For some years now, import competing industries

have been facing a number of challenges which are alleged to have inhibited their growth

(Quartey, 2006). The key factors usually noted as being responsible for aggravating the

situation have included the illegal inflow of goods through unfair trading practices,

infringement on intellectual property rights and the importation of imitation products that

16

may usually carry lower prices to mention but a few. Local manufacturers of textiles in

particular, are those significantly affected by these developments.

For instance, while in the mid 1970‟s, the textile industry‟s production capacity was

approximately 130 million metres and employed about 25,000 workers; by 2002,

production capacity and employment levels had dropped to 36 million metres and 2,000

workers respectively (Ministry of Trade and Industry, 2002). In some African countries

where this has happened, governments have responded to reverse the declining trend. For

instance, the Federal Government of Nigeria in September 2002 took various drastic

measures which included a total ban on importation of all finished textiles in order to

assist the Nigerian Textile Industry and save it from total collapse. Thus, while the textile

industries in Nigeria enjoy duty incentive of 10%, export expansion grant of 30% and;

0% Value Added Tax (VAT) and National Health Insurance Levy (NHIL), Ghanaian

industries have no duty incentives and export expansion grant, but rather are made to pay

a 12.5% VAT and 2.5% NHIL on their finished products, thereby, making Ghana‟s

products more expensive. The limited incentive structure has led to unemployment, loss

of government revenue and loss of access to the African Growth and Opportunity Act

(AGOA) (Quartey, &Abor, 2011).

Local producers of textiles have identified some „safeguard options‟ in the World Trade

Organization (WTO) stipulations such as Bi-lateral negotiations to limit exports,

emergency measures to limit imports and countervailing duty which Ghana can take

advantage of. Stakeholders have advocated for certain measures to revive the textiles

sector, namely, removal of duty on inputs for the production process; increase in duty on

finished fabrics imported; proper collection of duties and taxes on import seizure of

17

goods which are found to be undervalued, misrepresented, pirated, copied or sub-

standard. Ironically, while the job losses continue and stakeholders continue to advocate

for a ban on imported textile, Ghanaians continue to patronize imported textile products

(Quartey, &Abor, 2011). One may therefore ask, why do Ghanaians continue to import

these products at the expense of local substitutes?

2.5 Preference for Local or Foreign Textile

The country-of-origin effect has been identified as an important factor explaining

customers‟ product preference (Agrawal,&.Kamakura, 1999; Verlegh,&Steenkamp,

1999; Bhaskaran,&Sukumaran, 2007).Opoku and Akorli(2009) define country-of-origin

image as how a product designed, manufactured, or branded in a developed country is

perceived in a developing country. Knight (1999) argues that the country of manufacture

and product quality strongly influence consumer decision making in globally available

product categories. The extant empirical literature from developed countries suggests that

consumers in those countries tend to prefer products from developed countries to those

from less developed countries (Jaffe,& Martinez, 1995). They explain that consumers

prefer products from their own countries first, followed by products from other developed

countries before considering those from other countries. Normally (in Mexico),

consumers tend to have a preference for local products in countries where there is strong

patriotism, national pride, or consumer ethnocentrism (Heslop,& Papadopoulos, 2000).

Knight (1999) also suggests that consumers prefer domestically manufactured goods and

are willing to pay higher price for them. It is only when imported goods are of a

significantly superior quality that consumers will move to obtain those. With respect to

developing countries, the existing literature suggests that customers prefer western to

18

domestic products. Khan,&Bamber (2007) for instance found that consumers in the

former socialist countries of eastern and central Europe prefer western to domestic

products.

Okechuku and Onyemah (2000) in a Nigerian study found that the Nigerian consumer

obsession with foreign-made goods has had a detrimental effect on the domestic

manufacturing industry. They found that the country-of-origin is significantly more

important than price and other product attributes in consumer preference. Nigerian

consumers have a negative image of the „Made in Nigeria‟ label, rating it lower than

labels from more economically developed countries. They also found that the superior

reliability and technological advancement of foreign products are the most important

correlates of the Nigerian consumer‟s likelihood to purchase foreign products.

Saffu and Walker (2006) examined the impact of country-of-origin effects and consumer

attitudes towards buy local campaign initiatives. They found that, the attitudes of

consumers to buy locally-made campaigns can be characterized as protectionist,

nationalistic, and self-interest seeking. In a study on five West African countries,

Ferguson, Dadzie and Johnston (2008) investigated the country-of-origin effects in

service evaluation and found that situational personal characteristics, such as motivation

and ability to process information, may influence use of country-of-origin attributes in

evaluating a service. Besides, individual characteristics, such as ethnocentrism and

culture orientation, may influence country-of-origin preference in service evaluation.

In a Ghanaian study, Opoku and Akorli (2009) examined consumer attitudes towards

local and imported products in a developing country market. They found that the country-

19

of-origin of the products is more important than price and other product attributes. They

showed that the Ghanaian consumer holds the „Made in Ghana‟ label in low regard

relative to foreign labels, whilst superior quality and consumer taste are the second most

important reasons for the Ghanaian consumers‟ preference for foreign products. Clearly,

the empirical literature suggests that consumers consider products from developed

countries more favourably than those from less-developed and developing countries.

Following from this hypothesis, this study is therefore positioned to ascertain Ghanaians‟

preference for imported textiles to locally manufactured ones.

2.6 Conclusion

The global textile and clothing sector is characterized as buyer-driven commodity chain,

which is usually apply to industries where design and marketing play an important role,

but where production is relatively labour intensive (Gereffi, 2002; Farfan, 2005;

Naumann, 2006). Again in the production sector, there are low entry barriers for new

entrants due to easy-to-replicate sources of competitive (low skilled labour) advantage

and there are also a large number of competitors due to global fragmentation and new

entrants after the wave of trade liberalization and the phenomenon of globalization

(Gereffi, 2002). This means those involved in the Pre-production intangible (R&D,

Design and purchasing) activities and Post-Production intangible (Distribution,

Marketing and services) usually earned higher profitability and has increasing bargaining

power in the T&C trade. Those in Production (tangible activities), however, get lower

profitability as well as have decreasing bargaining power because it is assumed, they

contribute little to the “value-added” stage in the apparel global value chain (see Exhibit6

in appendix : Curve of value-added stages in the apparel global value chain)

20

(Gereffi,&Frederick, 2010). It is observed that the key to success in East Asia‟s buyer-

driven chains was to move from the mere assembly of imported inputs (traditionally

associated with export processing zones) to a more domestically integrated and higher

value-added form of exporting known alternatively as full-package supply or OEM

(original equipment manufacturing) production (Gereffi, 2002).

Apparel thus embodies two contrasting production systems characteristic of buyer-driven

chains: the assembly and the OEM models. Whereas the assembly model is a form of

industrial subcontracting in which manufacturers provide the parts for simple assembly to

garment sewing plants, the OEM model is a form of commercial subcontracting in which

the buyer-seller linkage between foreign merchants and domestic manufacturers allows

for a greater degree of local learning about the upstream and downstream segments of the

apparel chain (Exhibit 3 in Appendix: Global Value Chain) (Gereffi, 2002). There is

therefore clearly a relationship between value chain dynamics and quotas, particularly in

buyer-driven value chain, as is the case in textiles and clothing. Quotas have resulted in

the global fragmentation of textiles and clothing production to regions where low-cost

could not have been the determinant factor.

21

CHAPTER THREE: METHODOLOGY

3.0 Introduction

This chapter of the thesis outlines the procedure or strategies that the researcher adopted

to carry out the research work. This includes the study type and design, the methods used

in data collection, sampling techniques, data analysis and presentation styles and ethical

considerations among others.

3.1 Background of the Study Area

Sunyani Municipality is one of the twenty-two administrative districts in the BrongAhafo

Region of Ghana. It lies between Latitudes 70 20‟N and 70 05‟N and Longitudes 20

30‟W and 2010‟W and shares boundaries with Sunyani West District to the North,

Dormaa District to the West, Asutifi District to the South and Tano North District to the

East. The municipality has a total land area of 829.3 Square Kilometres (320.1square

miles). Sunyani also serves as the Regional Capital for BrongAhafo. One third of the total

land area is not inhabited or cultivated which provides arable lands for future investment.

The population density of the municipality is 122 persons per square kilometre (MPCU

Computation, 2010). On the average these areas have 18 persons per house. Given the

criterion that persons aged 15 years and above who complete basic school (Primary, JSS

or Middle school level) are literates, about 76% of the population of the municipality are

literates (GhanaDistricts.com, 2006).

The City of Sunyani is outfitted with modern communication facilities which include

fixed telephone and fax lines, mobile phones, internet and e-mail services. The mobile

telecommunication in the municipality includes brands like MTN, Tigo, Expresso, Airtel,

and Vodafone (the case under study). Additionally; postal services are available in the

22

form of post office, as well as expedited mail services provided by EMS (Express mail

service), DHL and FedEx. The Sunyani Municipality abounds in conditions which are

potent for the promotion and sustenance of diverse investments. The nature of roads in

the district and their network is among the best nationwide and this facilitates easy

movement of people and goods. Its proximity to Kumasi, which is the second largest

commercial/industrial city in Ghana, is also an added advantage to potential investors.

Most of the industries are into trading of general goods, provisions, tourism and

hospitality, health and communication.

3.2 Study Design and Type

A research design is a detailed outline of how an investigation will take place. A research

design is a blueprint for the procedure on how data is to be collected, what instruments

will be employed, how the instruments will be used and the intended means for analysing

data collected.

The descriptive research attempts to describe, explain and interpret conditions of the

present i.e. “what is‟. A descriptive research is concerned with conditions, practices,

structures, differences or relationships that exist, opinions held processes that are going

on or trends that are evident. Thus, this research design will be suitable for our data

gathering and analysis of the effect of SHC on the local textile industry.

Type

The research is a cross sectional survey of the Sunyani-East Municipality. This design

was chosen based on the purpose of the study, which is to describe the population with

respect to an outcome (effects of second-hand clothing). The cross sectional survey

23

allows the researcher to observe a large group of people at a single session and estimates

the prevalence of the outcome of interest for the population. Data can also be collected on

individual characteristics alongside information about the outcome. In this way cross-

sectional studies provides a „snapshot ‟of the outcome and the characteristics associated

with the research problem, at a specific point in time.

3.2 Study Variables

The independent variables that were considered in the study included the demographic

and personal characteristics of the study population like their educational background,

ethnicity, sex and professions. These are identified to have an influence on perceptions of

adverts. The dependent variables under consideration included preference for local and

foreign textiles, effect of foreign clothing on the local textile industry among others.

3.3 Study Population

The main objective of this study is to assess the effects of importing second hand clothing

on the performance of the Ghanaian textile industry with Sunyani-east municipality as the

case study.

The Ghanaian textile industry is made up of various players from the farmers involved in

the production of raw materials, such as cotton and wool, to those involved in the

transformation of raw or intermediate materials into textiles and clothing such as

dressmakers, tailors and those who supply services to consumers and businesses, such as

buyers and sellers of textiles and clothing both locally and internationally ,unions and

companies in the textile industry (The Textiles, Garment and Leather Employees Union

(TEGLEU) of Ghana, Akosombo Textile Limited (ATL), Ghana Textile Print (GTP) and

24

Printex).However, for this study, our local textile industry is defined by the buyers,

sellers and producers of clothing and textile both local and second-hand in the Sunyani-

East municipality.

The population for this study includes members of the general public preferably persons

15 years and above who are regarded to be a better position to make choices based on the

options presented to them in terms of local and foreign fabrics., tailors and dressmakers,

producers of local fabrics, (kente, smock etc,) buyers and sellers of clothing both local

and foreign.

3.4 Sampling Techniques and Sample size

Through a purposive sampling technique, the study population was chosen. A simple

random sampling was done with the help of cards to inscribed with „Yes‟ and „No‟. The

respondents who picked the „Yes‟ cards that amounted to the sample size formed part of

the study. This was intended to give some equal level of opportunity for the study

population to be a part of the study. The study conveniently took a sample size of 200

respondents which comprises of 40 tailors and dressmakers, 30 traders in local textiles

(smock, kente, kaba, GTP, Printex, and ATP), 30 sellers of SHC and 100 buyers of

clothing who are not involved in the production process or sale of any form of textile.

3.5 Data Collection Methods and Tools

The research used both primary and secondary data source. For primary data source, a

questionnaire with both open and closed ended questions was used to collect the data.

The structured questionnaire was grouped under five parts. The first part is about the

personal characteristics of the respondent, the second part seeks to identify thepreferences

of the respondents for local textile or foreign second-hand textile. According to

25

(YeboahFrimpong, 2013) there are certain factors that are responsible for why most

consumers inGhana show little interest in local goods.

Economic factors such as product quality, price, and product availability favour Ghanaian

consumers‟ preference for foreign goods, hence the third part of the questionnaire seeks

to understand how these variables chosen influence the preferences of the general

population who purchase clothing towards SHC.Thefourth part presents the respondents

with options of choosing if national pride, strong patriotism and ethnocentrism are factors

influencing their preferences for local textiles or not.

The final part of the questionnaire looks at the effect of second hand clothing on local

clothing industry. Secondary data on the other hand was from scholarly articles and other

literature by other others that are relevant to the objectives of the study.

3.6 Data Analysis Method

Statistical Package for Socials Sciences (SPSS) Statistical software version 20.0 for

windows was used for the data analysis. Results were being presented in the form of bar

graphs, tables and pie charts. These had their appropriate corresponding frequencies and

percentages.

3.7 Limitations of the Study

The study was limited by time and financial demands. Since it was combined with usual

undergraduate academic work it presented some form of constraints. All the expenses

associated with the research were borne from the pocket money of the researcher. The

sampling technique used presented some form of challenges when it comes to the

generalisation of findings but the sample size and the random sampling introduced

reduced some of the biases associated with the technique.

26

3.8 Ethical Considerations

The study sought approval from the University and the Faculty to make sure it conforms

to the standards of social sciences research. Ethical clearance was also obtained from all

the major stakeholders before data collection. Informed consent was sought from

respondents before questionnaires were administered after respondents have been briefed

of the purpose and the nature of the research. All secondary data used were rightly cited.

27

CHAPTER FOUR: ANALYSIS AND DISCUSSION OF RESULTS

4.1 Introduction

This chapter of the research presents the results of the study. The results are presented in

the form of tables and figures under the research objectives of the study. After the

analysis or data presentation the study discusses the results in line with the objectives of

the study and the literature review.

4.2 Presentation of Results

4.2.1 Personal Characteristics

Table 1:

Personal Characteristics of Students

Personal Characteristics Variables Frequency Percentages

Gender Male 87 43.5

Female 108 54.0

No Response 5 2.5

Age of Respondents 15-18 years 13 6.5

19-25 years 39 19.5

26-30 years 71 35.5

31-55 years 48 24.0

Above 55years 26 13.0

No Response 3 1.5

Marital Status Single 99 49.5

Married 87 43.5

Divorced 9 4.5

Widowed 3 1.5

No Response 2 1.0

28

Educational Background No Formal

Education 22 11.0

Primary/Middle

Sch. 69 34.5

JHS/SHS 60 30.0

Tertiary 30 15.0

No Response 19 9.5

Occupation of Respondents Farming 6 3.0

Trading 90 45.0

Students 33 16.5

Civil Servants 59 29.5

No Response 12 6.0

Income of Respondents GH¢50-GH¢100 6 3.0

GH¢100-GH¢200 11 5.5

GH¢200-GH¢300 12 6.0

GH¢300-GH¢400 54 27.0

GH¢500 and

Above 84 42.0

No Response 33 16.5

Religion of Respondents Christianity 102 51.0

Moslem 95 47.5

Traditional 3 1.5

Source: Field Data, 2015

Table 1 reveals in relation to the gender of the respondents, that most of them were

females, 54% (108), males were 43.5% (87) while the rest, 2.5% (5) did not indicate their

29

gender. The age distribution in the table indicated that while majority 35.5% (71) was

between 26 – 30 years, 24% (48) were between 31-55 years. The occupational

distribution of the respondents in indicated that most of them were trader followed by

civil servants then students. The least were farmers. The educational background of the

respondents indicated that 34.5% (69) were in primary/middle school, whiles30% (60)

were in JHS/SHS. AND 15% (30) were in Tertiary. In terms of the occupation of the

respondents, 45% (90) were into farming, and 29.5% (59) did not indicate their

occupation and 16.5% (33) were into Teaching. The distribution for the income showed

that most of them 42% (84) received monthly income of GH¢ 500 and above while the

least was 3% (6) of the population receiving GH¢ 50 – GH¢ 99. The religion of the

respondents indicated that 51.0% (102) were Christians, 47.5% (95) were Muslims, and

1.5% (3) was Traditionalist.

4.2.2 Preference of the General Population for Second Hand and Local Clothing

Figure 1: Preference for Local and Foreign Textiles

Source: Field Data, 2015

36%

64%

local textile second hand

30

Figure 1 suggests that most of the respondents 64% preferred foreign textiles to local

textiles but 36% preferred local textiles to foreign textiles.

4.2.3 Perception of the General Population, who Purchases Cloths Towards Second

Hand Clothing

Table 2:

Perception of Second-Hand Clothes

Variable Response Frequency Percentage

Cheap Yes 123 61

No 40 20

No Idea 37 19

Stylish Yes 103 51

No 92 46

No Idea 5 3

Durable Yes 131 65

No 61 31

No Idea 8 4

Readily available Yes 151 75

No 30 15

No Idea 19 10

Popular Designers Yes 170 85

No 28 14

No Idea 2 1

Source: Field Data, 2015

Table 2 indicates that in terms of the perception of second hand clothing in relation to it

being cheap, 61% (123) said it is the case but 20% (40) thought otherwise. When it came

to the style, about half of the respondents 51% (103) said it is more stylish than the local

textiles but 46% (92) however did not agree to this assertion. In terms of durability of

textiles, most of the respondents 65% (131) said it was durable than local textiles while

31

31% (61) indicated otherwise. Most of the respondents indicated that the second hand

clothing is readily available to the general public as compared to local textiles. Those

who said yes were 75% (151) of the respondents while those who said no made up of

15% (30). Most of the respondents 85% (170) thought foreign textiles have popular

designers as compared to local textiles but 14% (28) thought otherwise.

4.2.4 Reasons that Influences Preference for Local Textile to Second-Hand Clothing

Figure 2: Strong Patriotism as an Influence for Local Textiles

Source: Field Data, 2015

Figure 3shows 60% the respondents patronised local textiles as a result of strong

patriotism but 40% indicated otherwise.

120, 60%

80, 40%

yes no

32

Figure 3: National Pride as a Reason for Patronising Local Textiles

Source: Field Data, 2015

Figure 4 shows that 52% chose national pride as a reason for patronising local textiles but

48% indicated otherwise.

Figure 4: Consumer Ethnocentrism as a Reason for Preferring Local Textiles

Source: Field Data, 2015

52%

48%

yes no

72%

28%

yes no

33

Figure 5 shows 72% of the respondents indicated that they are influenced by

ethnocentrism in terms of their preference for local textiles, while 28% indicated

otherwise.

4.2.5 Effect of Second Hand Clothing on Local Textile Industry

Table 3:

Foreign SHC Textiles are Causing the Collapse of Local Industries

Variables Frequency Percentage

Yes 105 52

No 95 48

Total 200 100

Source: Field Data, 2015

Table 3 shows that 52% (105) of the respondents thought foreign second-hand clothing

causes the collapse of local textile industries, while 48% (95) of the respondents thought

otherwise.

Table 4:

Importation of Second Hand Clothing Has Caused Loss of Jobs

Variables Frequency Percentage

Yes 60 30

No 110 55

No Idea 30 15

Total 200 100

Source: Field Data, 2015

Table 4 shows in terms of whether second-hand clothing has caused any job losses, 55%

(110) said no, 30% (60) said yes and 15% (30) of the respondents had no idea.

34

4.3 Discussion of Results

4.3.1 Personal Characteristics

This study investigates the effect of importing second-hand clothing on the local textile

industry, with a sample size of 200 respondents which comprised of 40 tailors and

dressmakers, 30 traders in local textiles (smock, Adinkra cloth, GTP, Printex, and ATP),

30 sellers of SHC and 100 buyers of clothing who are not involved in the production

process or sale of any form of textile.

The data reveals that the respondents were well represented in terms of gender, age,

education, marital status, occupation, employment and income levels. Out of the 200

respondents, 54% (108) were female while 43.5% (87) were males, while the rest 2.5%

(5) did not indicate their gender. The uneven gender distribution reflects the

predominance nature of females in activities pertaining to buying and selling of textiles.

The data gathered on age distribution indicated that majority of the respondents (35.5%)

were between 26 – 30 years, an indicative of youthfulness of the sample. The

occupational distribution of the respondents in indicated that most of them were traders

followed by civil servants then students and least were farmers, so generally the

surveyed population were educated, although without any form of high academic

achievements. The respondents can be said to be relatively high income earners since

most of them receive GH¢ 500 and above. Christians were the majority with a substantial

number being Muslims.

35

4.3.2 Perception of the General Population, who Purchases Cloths Towards Second

Hand Clothing

The study noted that majority (64%)of the population in the municipality have preference

for second-hand clothing due to a number of important factors we considered. From the

data gathered in table 2, it can be noted that more than half of our respondents considered

the cheapness of second-hand clothing as a reason for their preference for it. They also

consider second-hand clothing to be very stylish, durable, have relatively more popular

designs and also readily available on the market.Quartey and Abor (2011) investigated

the perception of Ghanaians on their preferences about local and imported textiles. . In

response to their preference of textiles type, more than half of the participants stated a

preference for the local textiles with reasons being the good quality, attractiveness and

affordability of the local textiles. Those who stated that they preferred imported textiles

mentioned that they were cheap and very affordable. Majority of the consumers,

especially low income earners, purchase SHC because they perceive the clothes to be

very cheap and affordable.

4.3.3 Preference of the General Population for Second Hand to Local Clothing

The study identified that most of the respondents preferred second-hand clothing to local

textiles. This is evident in our study (figure 1) which graphically represents the results

from our chosen area of study of the preference for second-hand clothing to local textiles.

The data collected reveals that 63.5% (127) of our respondents have preference for

second-hand clothing, while 36.5% (73) of the respondents chose local textiles over

second-hand clothing.From table 2, it is evident in the data gathered on most of the major

variables that influencetheirpreference for cloth ( prices, style, the durability of these

36

cloths, availability and the popularity of their designs),that more than half of the total

number of respondents on each variable choose second-hand clothing over local textile.

Baden and Barber (2005) reported in their analysis of the impact of SHC on developing

countries, that SHC appeals to all persons of the socioeconomic ladder and, while SHC is

noted to be relatively cheap and affordable, most people are purchasing them because of

the popularity of western clothing styles. Knight (1999) also suggests that consumers

prefer domestically manufactured goods and are willing to pay higher price for them. It is

only when imported goods are of a significantly superior quality that consumers will

move to obtain those. With respect to developing countries, the existing literature

suggests that customers prefer western to domestic products.

4.3.4 Reasons that Influences Preferences for Local Textile to Second-Hand

Clothing

This study suggests that the three major factors that influence preferences for locally

produced textiles are; Ethnocentrism, national pride and strong patriotism.

Data gathered on our study(figures 3, 4 and 5) on the factors influencing the preference

for local textiles over second-hand clothing reveals that the major reason for preference

of local textile to second-hand clothing was consumer ethnocentrism 72.5% (145)

followed by national pride and strong patriotism. African textiles are not just seen as

mere clothing for the body, but a representation of heritage, culture and belonging to a

particular community, tribe or ethnic group. An apparent phenomenon that projected

African prints in the 1960‟s and 1970‟s to be accepted and customized as valuable and

prestigious cloth in Ghana and other countries in the sub-region is the aesthetic values

and most significantly the symbolic meanings they carried. (Howard, et al., 2012) African

37

prints have philosophical significance. The prints have names that could easily depict or

explain the beliefs, practices and culture of Ghanaians (Orhin, 2007). The patterns in

African prints tell stories of relevance to the wearer, such as proverbs, poems and

traditional African fables. The colours also hold philosophical significance as they can

represent social standing, age, tribal orientation and marital status. (Wendren, 2008)

4.3.5 Effect of Second Hand Clothing on Local Textile Industry

The data gathered from the study (tables 3, 4 and 5) indicates that second hand clothing

causes collapse of the local textile industry with respect to our chosen area of study.

Generally, a survey of the manufacturers of local textiles in Ghana showed that about

75% of them had reduced production by 20% to 50%. Reasons stated for this reduction

were the low demand for local textiles, high production costs, high wages, high cost of

raw materials, and the influx of imitated textiles that were sold cheaply. (Quartey,&Abor,

2011).

Local textile trading businesses have been crippled by the influx of foreign clothes and

textiles on the Ghanaian market on the ticket of Trade Liberalization in the global front. It

is an arguably fact that the liberal trade in the global world has had a negative impact on

the local fashion industries. In order to sustain the businesses of the local designers, the

local industrialists have the hope that the ban of unnecessary importation of foreign

clothes and textiles, especially the second-hand types, can go a long way to revive the

clothing and textiles sub-sector (Sarpong, et al., 2011). With regard to the competition

posed by the importation of new and used clothing and textiles, a collective approach is

required to address the issue. In support to the opinions expressed by Boakye (2010) and

38

Adamptey (2009), the study calls for all fashion producers especially small-scale

manufacturers in Ghana to form strong alliance in order to stand and gather effective

force to put their grievances forward to parliament and other stake-holders who formulate

and implement policies to ad- dress importation of fashion goods that compete unfairly

with the Ghanaian products. For example, only textile fabrics that are not easily produced

and are needed in the country should be imported to save the local textiles and clothing

industry from collapsing. This means that, some restriction on importation of textile

products should be enforced. (Sarpong, et al., 2011).

39

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECCOMMENDATIONS

5.1 Introduction

This chapter of the study presents a summary of all the major points that was realized in

the course of the study. From this the study identified some issues that are worth

addressing by giving out some recommendations.

5.2 Summary

The general objective of the study is to assess the effects of importing second hand

clothing on the local clothing industry in the Sunyani municipality, specifically

understanding the perception of the general population who purchases cloths towards

second hand clothing in the municipality, assessing their preferences for second hand and

local clothing in the municipality and examining the reasons that influence their

preferences for both second-hand and local textiles. The study also attempts to identify

the effect the second hand clothing on local clothing industry in the municipality. The

study adopted a descriptive research design and cross section type of research. Both

quantitative and qualitative data was collected with the aid of questionnaires and the

statistical package for social science analysis software was used in analysing the data.

The questionnaire was designed to provide data on the personalities of the respondents,

their perception of the type of clothes they choose to purchase, their preferences for local

textile and second hand textiles and the factors that influence their preference for local

textiles to second-hand clothing. Finally, the questionnaire sought their idea on the effect

of second-hand clothing on the local textile industry. The result of the study reveals that

most of the middle-aged female respondents in the municipality preferred second hand

40

clothing to the local textiles. This was as a result of it being perceived to be cheap,

stylish, durable and with popular designers coupled with the fact that the importation of

SHC awakened respondents in the municipality to the low quality of local textiles.

People who patronized local textiles did so mainly based on some form of a sense of

pride. The study shows that the importation of second hand clothing has caused the

collapse of local textile businesses and many have lost their jobs.

5.3 Conclusion

In conclusion, the study found out that indeed the importation of SHC has a great impact

on the local textile industry with respect to our chosen area of study. The adverse effect

of SHC on the local textile industry is a problem that deserves to be analysed critically.

The findings from the study reveal that it has brought about a collapse of the local textile

industry and job loss for the traders in local textile. The study also prove that second-

hand clothing brings people‟s awareness to the poor quality of the local fabrics but in a

better light, the local textile industry can attempt to upgrade the quality of the textiles

produced to that of the second-hand clothing imported. It can also be concluded that

residents of the municipality still have preference for local textile due to their national

pride, ethnocentrism and strong patriotism.

41

5.4 Recommendations

Based on the finding of this study, the following recommendations would be

necessary;

The major players in the local textile industry need to put in place measures that

can assist the industry meet some of the perceived nature of second hand clothing

for which people patronize it the more. Issues that pertain to prices, style and

durability among others need to be tackled.

Emergency measures to limit imports and countervailing duty should be put in

place to revive the textiles sector like the removal of duty on inputs for the

production process and increasing duty on finished fabrics imported.

An issue that pertains to trade restrictions and taxes need to be well designed in

order to keep the local businesses operating.

Issues that pertain to patriotism, pride in culture and ethnicity need to be hyped in

order to get more people to patronize local textiles. This is based on the fact that

most people preferred to use local textiles because of issues that have got to do

with national pride and interest. If for instance the African wear for Fridays are

well developed it will open the local market to more income.

Finally, in agreement with the suggestions of Boakye (2010) and Adamptey

(2009), small scale producers of local textiles in Ghana should form strong

alliances and forward their grievances to parliament and other stakeholders who

formulate and implement policies to address importation of fashion goods that

compete unfairly with the Ghanaian products.

42

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46

APPENDIX I

CATHOLIC UNIVERSITY COLLEGE OF GHANA - FIAPRE

FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION

ASSESSMENT OF THE EFFECTS OF SECOND HAND CLOTHING ON THE

PERFORMANCE OF THE GHANAIAN TEXTILE INDUSTRY: THE CASE OF

LOCAL CLOTHING INDUSTRY IN THE SUNYANI – EAST MUNICIPALITY

QUESTIONNAIRE

I am a final year student of the Catholic University College of Ghana. I am collecting this

data to aid me in my long essay. I assure you that data collected will be used for this

research only and with outmost confidentiality. You may refuse to answer any of the

questions that you do not feel comfortable to answer. Results of the study will be

available upon request.

I thank you very much in advance for your collaboration and for sacrificing your

invaluable time.

Questionnaire No. …….

Part I: Professional Characteristics

1. Gender: Male [ ] Female [ ]

2. Age: 15-18years [ ] 19-25years[ ] 26-30years[ ] 31-55years[ ] Above

55years[ ]

3. Marital Status: Single [ ] Married[ ] Divorced[ ] Widowed[ ]

4. Educational Background:

47

No Formal Education [ ] Primary \Middle Level [ ] J.S.S\Secondary [ ]

Tertiary [ ]

5. Occupation: Farming [ ] Trading [ ] Teaching [ ] Others [ ] Please

Specify...............................................

6. Income per month: GH₵50- GH₵100 [ ] GH₵100-GH₵200 [ ] GH₵200-

GH₵300 [ ] GH₵300-GH₵400 [ ] GH₵500 and above[ ]

7. Religion: Christianity [ ] Moslem [ ] Traditional [ ] others [ ] Please

specify......................

Part II: Preference of the General Population for Second-hand and local textiles

8 Which of the following do u prefer the most?

Local textile [ ] Second-hand textile [ ]

Part III: Perception of the General Population, who purchases cloths towards

second hand clothing

9 Which of the following can you say pertains to second hand clothing as compared

to local textiles

Variable Yes No No Idea

Cheap

Stylish

Durable

Readily available on the market

Popular designers

Others …………………………..

48

Part IV: Reasons that Influences Preference for local textiles

10 Do you tend to have a preference for local textiles as a result of;

Reasons Yes No

strong patriotism

national pride

consumer ethnocentrism

Part V: Effect of Second Hand Clothing on the performance of Local Textile

Industry

11 Do you think the foreign textiles are causing the collapse of local industries?

Yes [ ] No [ ]

12 Has the importation of second hand clothing caused job losses?

Yes [ ] No [ ] No Idea [ ]

Thanks for your cooperation.