Kenya negotiating AGOA extension despite low exports

Trade PS Chris Kiptoo. /ENOS TECHE
Trade PS Chris Kiptoo. /ENOS TECHE

The government is negotiating for a post Africa Growth and Opportunity Act (AGOA) initiative to grow exports to US.

AGOA was enacted in May 2000 and now has seven years to 2025 after its renewal, under which the country is to export duty-free products.

This follows a similar action by State Department for Trade in 2018 where it developed a strategy, Kenya National African Growth and Opportunity Act Strategy and Action Plan to double exports to the US market.

Through the strategy, the department identified priority sectors with products of high export potential including livestock, oil and gas, art craft, manufactured products, home décor and personal accessories, processed and speciality foods, flowers, fresh fruits and vegetables.

The move was backed by the United States Agency for International Development (USAID) Hub in East Africa.

“The government engagement to extend practice and enactment of AGOA will promote business community and rise in revenue through trade,” Trade PS Chris Kiptoo said.

Kenya’s top exports to the US comprise of woven apparel, knit apparel, coffee, tea and macadamia nuts.

According to the Export Promotion Council, Kenya is yet to fully exploit the US market despite great trade opportunities arising from the tariff preferences provided under the act.

“In 2016, the U.S. imported apparel worth Sh8.27 trillion ($83 billion) while Kenya only exported Sh33.88 billion ($340 million) worth of apparel to the US during the same period. In 2016, U.S. home décor and accessories imports amounted to Sh1.80 trillion (US$18.1 billion) of which Kenya’s exports only accounted for a total of Sh308.9 billion ($3.1 million). This demonstrates a significant opportunity for Kenya to work with stakeholders to expand its US market share,” a statement by EPC stated.

Weak turnaround time in delivery has been blamed for the country’s inability to fully benefit from the market.

“This is because new trade relationships with US buyers may take some time to develop, or because the associated value chains may have gaps that are more complex to resolve,” EPC showed.