Kenya
must act now, not celebrate too early.
First, let us give credit where it is due. The Government of Kenya, and particularly President William Ruto, deserves recognition for the decisive diplomatic engagement that helped secure the temporary extension of AGOA.
At a
critical moment, the President clearly deployed political capital in
Washington, preventing immediate disruption to export orders and safeguarding
thousands of jobs.
Equally commendable was the role played by the Kenyan Embassy in Washington, which represented Kenya with clarity, urgency and professionalism during a complex and time-sensitive process.
Their engagement ensured that Kenya’s position was
articulated credibly and forcefully. That collective effort matters. It
signals seriousness, intent and credibility.
But it
must also be said candidly and responsibly: AGOA’s extension
only buys time. It does not buy competitiveness.
The
extension has temporarily calmed the market. Buyers who were cancelling orders
have paused. Factories have avoided abrupt shutdowns. Jobs have been protected,
but for now. However, apparel manufacturing does
not operate quarter to quarter. It operates on
seasonal order cycles.
In a
matter of months, as buyers place orders for the next season, the same questions
will return with greater urgency: Is Kenya cost-competitive? Is it
structurally viable? Can it sustain scale beyond short-term preference
windows?
If these
questions remain unanswered, today’s relief will give way to renewed panic, followed by quiet disengagement.
The
global trade environment has shifted again, and not in
Kenya’s favour.
Bangladesh
has now been granted zero-tariff access for apparel exports into the United
States. Kenya, outside AGOA certainty, faces tariffs of around 10 per cent. This is not a marginal difference. It is decisive.
Bangladesh is already approximately 20 per cent cheaper than Kenya at the factory gate, driven by scale, lower financing costs, logistics efficiency, energy pricing and a mature manufacturing ecosystem.
Add a 10 per cent tariff
disadvantage, and Kenyan apparel becomes commercially unviable for long-term
sourcing programmes. In that context, AGOA’s duty-free access, while
valuable, becomes insufficient on its own.
Buyers
respond to arithmetic, not sentiment. As panic around Bangladesh subsides and
tariff parity returns, buyers will gravitate back to familiar, lower-cost
ecosystems. Kenya risks becoming an opportunity-buy market, used intermittently
rather than strategically. That is not how sustainable industries are
built.
Kenya’s
challenge is not effort or intent. It is structure.
Despite
repeated acknowledgement at the highest policy levels that Kenya carries
a roughly 20 per cent structural cost disadvantage,
meaningful, coordinated cost-mitigation has yet to materialise.
Energy, logistics, financing, compliance overheads and operational
inefficiencies continue to erode competitiveness.
Even with AGOA or a reciprocal trade agreement, an expensive producer cannot win consistently. Market access creates opportunity, but only competitiveness converts opportunity into growth.
This reality is already visible in Kenya’s
performance in the European Union market, where competitors such as Bangladesh,
Pakistan, Vietnam and Egypt in North Africa enjoy duty-free access, deeper
supply ecosystems and faster speed-to-market than Kenya currently
offers.
Trade
policies can change overnight, but cost structures do not.
Despite goodwill, diplomacy and policy intent, Kenya’s apparel exports have remained largely stagnant for nearly a decade, placing the country toward the lower end of African export performance.
This stagnation persists even as peer African countries have
expanded capacity, diversified buyers and strengthened industrial
ecosystems.
The
implication is clear: preferences alone do not build industries.
Competitiveness does.
President
Ruto has consistently emphasised job creation, particularly for the
youth.
Export-driven
manufacturing remains one of the few sectors capable of delivering
large-scale, formal employment across skill levels. Global supply chains
are being reconfigured. Trade tensions have opened a window, and new investors
are exploring alternatives beyond traditional hubs.
But the
line between companies coming and failing versus coming and prospering is thin.
Even long-established firms are under strain. Kenya must offer not just market
access, but a foundation for growth, not survival.
If Kenya
is to convert this moment into durable industrial growth, three priorities must
move urgently from discussion to execution.
First,
Kenya must continue pushing for a long-term AGOA extension, with rules of
origin remaining unchanged. Predictability is essential for buyer
confidence, supply-chain planning, and investment decisions.
Second, Kenya should aggressively pursue reciprocal trade agreements delivering zero-tariff access while preserving AGOA-equivalent rules of origin.
In an
increasingly transactional global trade environment, reciprocal arrangements
may receive greater priority. This could work to Kenya’s advantage.
As a
first mover, Kenya can attract new investments across multiple export-oriented
sectors, positioning itself as a strategic manufacturing hub rather than a
temporary alternative.
Third,
and most critically, Kenya must decisively reduce the 20 per cent structural
cost disadvantage faced by export manufacturers. No trade framework can
substitute for competitiveness.
Kenya
does not lack intent, opportunity or goodwill. What it needs now is
speed, coordination, execution and bold decision-making.
The shift
from slow, incremental growth to an aggressive export-led strategy requires
decisions that only the President can take. This is a moment for President Ruto
to act boldly and decisively, resetting the growth trajectory and giving wings
to export-driven manufacturing.
Because
in global manufacturing, countries do not lose relevance suddenly. They
lose it gradually, season by season, order by order, while believing they still
have time.
That time
is now.
Apparels Manufacturers and Exporters (EPZ) Sector chair and a board member of Kenya Association of Manufacturers | [email protected]
