“Come here, cheap dresses!” Yiga Yokana yells to potential customers from his stall at Kampala’s Owino market, one of Africa’s largest outdoor shopping hubs.

The Christmas and New Year period have been a busy time for Mr. Yokana, who normally earns around 1 million Ugandan shillings ($372 dollars) a month selling used clothing imported from the United States and Europe – known locally as mivumba.

“The people were buying so [many] clothes over the festive season,” he says in Luganda, a local language.

Besides dresses, the bargains Yokana is hawking today include a pale blue and white flower-patterned blouse from the British brand Double Two.

His price? $0.75. A green tag from an Oxfam charity shop – Britain’s equivalent of a secondhand store – with £3.99 ($6.43) written on it is still attached.

Uganda, along with nations across Africa, rely on this used apparel – exported in bulk from Western thrift store surpluses – as a major source for local clothing markets. In fact, about a third of the clothing donated to charity worldwide eventually makes its way to sub-Saharan Africa, according to the Guardian newspaper.

But with textile recycling mushrooming into a billion dollar industry, many local clothing manufacturers complain they are unable to compete with the flood of cheap Western hand-me-downs. And secondhand hawkers themselves face another rising challenge – Chinese imports.

A transcontinental journey

The blouse Yokana was selling in Kampala likely began its journey to East Africa at Wastesaver, Oxfam Great Britain’s clothing plant. There, 80 tons of donated clothes are sorted weekly into about a hundred different grades depending on garment type, condition, style, and material. The goal, Oxfam officials say, is to “maximize revenue” for the charity while minimizing landfill.

Many items that cannot be sold domestically are sent to overseas wholesalers.

According to the US International Trade Commission (ITC), about 1,589 tons of used clothing worth $1.3 million was shipped from the US to Uganda between January and October 2012.

Houston-based American Textile Recycling Service (ATRS) is one of the suppliers for these bulk exports of used clothing. ATRS purchases donations gathered by Mothers Against Drunk Driving (MADD), the Society for the Prevention of Cruelty to Animals (SPCA), and other organizations through neighborhood recycling bins.

“Secondhand clothing buyers in East Africa have a strong appetite for American fashion brands, particularly denim and active wear,” says Debra Stevenson-Peganyee, the chief marketing officer for ATRS.

Local industry struggles to keep up

Ugandan fashion designer Stella Atal says she loves trawling for inspiration in the stalls at Owino and the dusty roadside metal containers where these secondhand clothes are also sold.

“The styles are really unique,” says Ms. Atal, who makes skirts and dresses using old ties in her studio in Kamwokya, Kampala. “Anything latest you find downtown.”

Although Atal’s designs, which retail for upwards of $70 each, don’t compete directly with the secondhand clothing markets, she says she couldn’t make clothes on such a large scale even if she wanted to.

“We cannot afford industrial machines because the electricity [cost] is so high,” she says.

And she is not the only local clothing maker who struggles with the idea of expansion.

Grace Kirabo manages the Textile Development Agency (TEXDA) in Kampala, which weaves clothes using handlooms. Their biggest challenge is simply getting cotton, she says, as the yarn produced by Ugandan factories isn’t suitable.

“The only alternative is to import it from Kenya,” says Ms. Kirabo. “This importation of yarn makes the TEXDA products expensive for the average Ugandan.”

The rise of a new competitor

But secondhand clothes are not the Ugandan textile industry’s only obstacle. In fact, Atal says she’d rather the government deal with Chinese clothing imports before used clothes from the West, and Kirabo calls the Chinese her “biggest competitor and copycat.”

Ms. Stevenson-Peganyee, of ATRS, who has visited East Africa, says that secondhand sellers there tell her that their trade may also be threatened by low-quality imports from China, which often sell for less than the West's used clothing. "Stall vendors tell us the Chinese products are cheaper but locals know they don't last," she says.

Twelve African countries are among 31 worldwide that have banned imports of secondhand clothing, the Guardian reports.

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Uganda is not one of them, although the country’s 2009 National Textiles Policy proposes phasing out secondhand clothes by 2015. But last week Joshua Mutambi, a senior official with the Department of Industry and Technology, acknowledged that the government realized for this plan to work it must try “to encourage investment” in the local sector first.

“It’s not easy for a country like ours to ban secondhand clothes,” without first developing local production that can meet the needs of those who can only afford the secondhand import price-point, he concedes.