Kenya and the US have reached an agreement on six new co-investments in the apparel sector valued at $55 million (Sh7.5 billion).
This brings to 20 the number of deals reached in the last one month, amid an aggressive lobbying by the government to attract more investments from the US.
Investment, Trade and Industry CS Moses Kuria is leading a trade mission to America, which includes a roadshow in New York.
Kenya is also pushing for speedy negotiations on the Strategic Trade and Investment Partnership (STIP), hoping to have a deal by December.
The new deals announced by US Ambassador to Kenya Meg Whitman, at the on-going trade mission, are a build up of 14 initial deals announced by President William Ruto at the American Chamber of Commerce Summit (AMCHAM) in March, in Nairobi.
They are supported by Prosper Africa and the US Agency for International Development (USAID).
Prosper Africa is a government initiative that connects US and African businesses with new buyers, suppliers, and investment opportunities.
The latest developments, Whitman notes, demonstrate the United States’ commitment to strengthen the economic partnership with Kenya.
The six new co-investments with American and Kenyan apparel companies will connect American buyers with Kenyan manufacturers, creating more jobs in Kenya and across the United States by making it easier to do business together, the US government said in a statement.
Under the new deals, clothes manufacturer-MAS Intimates will create jobs in the formal sector and provide training for Kenyan workers to increase production of high-quality Kenyan made apparel.
Discount clothing firm- United Apparel Liquidators (UAL) on the other hand will increase apparel exports to the US market by building a one-stop shop in Kenya, that harmonises all steps in the production process from “Farm to Fashion.”
Mega (Mega Sports Apparel) will expand the company’s production capacity by adding new production lines.
Kenya’s Coast Apparel will benefit from the purchase of machinery to increase production and export capacity, creating new jobs for women and youth.
Under the deal, Athi River based-Best Lifestyle will hire and train new employees by expanding its manufacturing in Kenya.
US-based packaging provider Nexgen Packaging will set up a factory in Kenya to manufacture tags and labels, branding products in apparel and footwear for sale within and outside Africa.
“Prosper Africa is proud to connect U.S. buyers with African suppliers and drive U.S. investment into Kenya and countries across Africa,” said Prosper Africa Acting Coordinator Scott Cameron.
CS Kuria has since assured US investors of a conducive business environment.
He said President Ruto’s reforms, including tax incentives announced during the AMCHAM meeting in Nairobi, would be in place in the next six weeks.
They include the repealing of the requirement that foreign investors cede 30 per cent of their companies to locals.
The President also promised that Kenya would review the Digital Services Tax, remove VAT on exported services and address challenges in VAT refunds.
Effective June this year, all verified tax refund claims would be payable within six months, Ruto promised, assuring investors of a “more predictable tax regime”, starting June.
“In six week’s time, Kenya will have passed legislations that will bring to work the promises by President William Ruto,” Kuria said during his address at the Financial Services Forum-US-Kenya Business Roadshow in New York.
Meanwhile, Kenya is keen to have a trade pact with the US by end of this year.
According to Kuria, there is urgency of concluding negotiations on the STIP to establish permanent and predictable trading arrangements with the US, ensuring a smooth flow of trade post the African Growth and Opportunity Act (AGOA) phase, in 2025.
The talks are headed for a third round set for Washington in July, after successful negotiations in Nairobi last week and earlier talks in the US in February.
“I am very certain that by close of the year, God willing, we are going to put pen on paper for the first ever strategic trade and investment partnership by the United States on the continent of Africa,” he said.