Seven billion euros for European GDP: Second-hand sector calls for legislative support to maximise impact
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Business |REPORT
The second-hand fashion industry has emerged as a key player in the global circular economy, making a significant contribution to Gross Domestic Product (GDP) in Europe and Africa and generating thousands of jobs, particularly for women. This was revealed in a report by Oxford Economics, commissioned by Humana People to People and Sympany+, which highlighted the economic and social impact of this emerging sector.
The study, titled “The Socio-Economic Impact of Second-Hand Clothing in Africa and the EU27+”, is the first of its kind and offers a comprehensive analysis of the entire value chain, from the collection and sorting of garments to their commercialisation in European and African markets. It assesses not only the economic benefits, but also the environmental ones, positioning second-hand fashion as a sustainable alternative to fast fashion.
However, the report also highlights the urgent need for greater legislative support to ensure the sector's competitiveness. It warns that, without a robust regulatory framework, second-hand fashion could be disadvantaged compared to fast fashion, which continues to dominate the global market with low-cost, high-impact new products.
The upcoming negotiations to reform the EU Waste Framework Directive, which will begin later this month, will be crucial for creating a regulatory environment that favours the sustainable growth of the second-hand fashion sector.
Economic contributions and job creation
According to the report, the second-hand clothing industry contributed an estimated seven billion euros to the GDP of the EU27+ in 2023. This figure not only represents the value generated by the direct sale of used clothing, but also includes other related effects such as direct benefits — sales in stores and jobs created in those same stores, for example — and indirect effects — which encompass benefits for suppliers working with these stores, such as those who supply labels, bags or transport services.
Germany and the UK stood out as the main contributors, with contributions of 670 million euros and 420 million euros, respectively. Job creation was also significant, with 150,000 jobs created in the European Union, of which 73 percent were direct jobs.
Eight out of ten of these jobs were held by women, highlighting the sector's positive impact on female employment inclusion, particularly in Eastern European countries such as Bulgaria, Romania and Poland.
Impact on Africa
The report highlights that in Africa, the economic impact of second-hand clothing is particularly relevant in Ghana, Kenya and Mozambique, where exports from the EU27+ have significantly boosted economic growth, generating millions of dollars for GDP and tens of thousands of formal and informal jobs.
In Ghana, used clothing imports contributed 76 million dollars to GDP in 2023, resulting in the creation of 65,000 jobs. In Kenya, the contribution reached 17 million dollars, with over 68,000 informal jobs generated. In Mozambique, these figures reached 10.7 million dollars and 20,700 jobs.
Despite the continued growth of second-hand clothing imports in these countries, a decrease has been observed in the proportion of garments originating from the EU in Kenya and Mozambique, indicating a possible shift in market trends and sourcing.
It is crucial to bear in mind that while second-hand clothing imports have a positive economic impact in countries like Ghana, Kenya and Mozambique, they also present significant environmental and waste management challenges. In places like Ghana, particularly in the Kantamanto market in Accra, a key hub for second-hand clothing, the saturation of unwanted garments has become a serious problem. Large quantities of clothing that cannot be sold or reused end up in landfills, rivers and beaches, polluting the environment.
The case of Ghana's beaches, covered in discarded clothing, is a stark example of this problem. Waste management infrastructure in many of these countries is not equipped to handle the volume of textile waste arriving, leading to an accumulation of waste that negatively affects local ecosystems and public health. This phenomenon not only highlights the limitations in recycling capacity, but also the consequences of a constant flow of low-quality clothing that does not meet the needs of the local market.
Furthermore, the decline in the quality of exported garments in recent years has exacerbated the problem, as more and more clothing is quickly becoming waste instead of being reused. This reflects a complex dynamic where, despite the economic benefits, the environmental and social repercussions of excess second-hand clothing pose a challenge to the sustainability of this model.
Legislative and regulatory challenges
The report also highlights the challenges facing the sector in the regulatory context of the European Union. With the imminent legislation on mandatory textile collection set to come into force in 2025, there is expected to be increased pressure on used clothing managers to handle growing volumes of garments, without a proportional increase in available resources.
On the other hand, the possible implementation of fees under the extended producer responsibility (EPR) scheme could represent an obstacle for reuse operators, limiting their ability to effectively contribute to the circular economy and meet established climate and social objectives.
Karina Bolin, Circular Textiles director at Humana People to People, highlighted the urgency for policymakers to recognise the value of the second-hand industry as a key driver of sustainable growth.
“Now more than ever, it is essential that policymakers recognise the value of this industry and provide the necessary legislative support and investment to unleash its full potential as a central factor in building a more resilient circular economy that benefits both people and the planet.”
Meanwhile, Neuhoff, of Oxford Economics, stressed that, while often underestimated, the sector possesses considerable economic power that can be decisive in driving a transition towards a more circular and inclusive textile industry. “By keeping clothes in circulation and creating green jobs in both Europe and Africa, the sector delivers significant economic and social benefits,” he assures, backing up his words with the report.
The report concludes with a call to action for European legislation to support the sector, ensuring that it continues to contribute to economic and social development in Europe and Africa, and promoting a business model that not only favours sustainability, but also reduces poverty and promotes employment inclusion, especially for women.
“This sector risks losing its competitive advantage against fast fashion manufacturing giants like China, which continue to dominate global textile markets by producing new, cheaper and lower-quality garments, with a huge environmental cost,” the document reads.
No! to extended producer responsibility fees for used clothing managers
In line with the arguments of the “Green VAT” — an initiative that seeks to reduce the tax burden on companies that operate ethically and in an environmentally friendly manner — its demand is clear: 'No' to extended producer responsibility fees for used clothing managers.
Backing the idea that these managers play a crucial role in waste reduction and in driving the circular economy, the text defends the concept of not imposing extended producer responsibility (EPR) fees on textile managers who promote the reuse of used clothing.
Furthermore, it points out that with the upcoming mandatory textile collection in the EU, starting in January 2025, managers will face greater restrictions and will have to handle larger volumes of clothing without a proportional increase in their resources. Therefore, additional support for the sector and a swift resolution in legislative negotiations is called for.
Source: report on “The Socio-Economic Impact of Second-Hand Clothing in Africa and the EU27+”, prepared by Oxford Economics under the commission of Humana People to People and Sympany+, available on the Humana website.
This article originally appeared on FashionUnited.ES. It was translated to English using an AI tool called Genesis and edited by Rachel Douglass..
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