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February 16, 2019

Uhuru visit expected to boost Kenya-US trade opportunities

Trade and Industrialisation CS Peter Munya walks past exhibition booths during Kenya Trade week and Exposition in Nairobi on July 30,2018.
Photo/Enos Teche.
Trade and Industrialisation CS Peter Munya walks past exhibition booths during Kenya Trade week and Exposition in Nairobi on July 30,2018. Photo/Enos Teche.

Trade Cabinet secretary Peter Munya and his American counterpart Robert Lighthizer yesterday announced the establishment of a US-Kenya Trade and Investment Working Group to deepen trade and investment ties.

Munya, represented by trade Principal secretary Chris Kiptoo, said the renewed relationship points to more efforts to enhance trade.

"Although AGOA preferences scheme has led to increased Kenyan exports since 2000, its utilization has been suboptimal," said Munya.

Through implementation of the recently launched National AGOA strategy and action plan, Kenya seeks greater US support in order to optimise available opportunities in the remaining seven years of AGOA.

Currently the US is Kenya’s fourth largest export market while the imports from the country are ranked at position eight.

This is despite continued participation in the US-African Growth and Opportunity Act aimed at boosting trade between the two states.

Kenya’s exports to the US stood at Sh21.6 billion between January and June while the country had imported goods worth Sh31.37 billion over the same period, Kenya National Bureau of Statistics data show.

It is expected that President Uhuru Kenyatta’s visit and talks with President Donald Trump could help bridge the gap which currently is in favour of the US.

Kenya’s export market is currently led by Pakistan followed by Uganda, Netherlands, the US and United Kingdom respectively while top origins of imported goods are China, India, Saudi Arabia, the United Arab Emirates and Uganda.

Introduced in 2002 by then US President George W. Bush, AGOA was created to provide access to the US market by select African States.

About 17 years down the line Kenya’s export bill to the US has grown more than threefold to Sh49.95 billion as at December 2017 compared to Sh10.9 billion recorded when the programme began.

The value of imports from the US have also grown, although at a much slower rate ( 141.57 per cent), to Sh57.36 billion in 2017 compared to Sh23.75 billion in 2002.

Since its inception, Kenya has received four extensions of the programme, the most recent in June 2015 when AGOA was extended for 10 more years to 2025.

According to the US department of State website, under AGOA, Kenya enjoys preferential trade benefits for US imports including agricultural products, aircraft parts, and machinery.

Kenya’s exports to the US include apparel, coffee, and tea. US business investment is primarily in services, information technology, and the tourism industry.

Data by the Tourism ministry shows the US was the third largest source of tourists to Kenya at 15 per cent after Europe and Africa at 36 and 29 per cent respectively.

American tourist arrivals registered the largest growth of 17 per cent last year. This is set to grow further with the onset of direct flights to Washington slated for October.

Last month, Under Secretary of Commerce for International Trade Gilbert Kaplan led a delegation of more than 70 business leaders, striking deals worth Sh10 billion during the US-Kenya bilateral trade summit in Nairobi.

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