mzeiya
Elder Lister
The African Growth and Opportunity Act (AGOA), established in 2000, has been pivotal in enhancing trade between the United States and sub-Saharan African countries by allowing duty-free exports of certain goods. Kenya, for instance, has significantly benefited, particularly in its apparel sector, which averages $500 million in exports annually and supports approximately 50,000 jobs.
With AGOA set to expire in September 2025, discussions about its renewal are underway. The current U.S. administration's 'America First' policy emphasizes reciprocity in trade agreements, potentially signaling a shift towards bilateral Free Trade Agreements (FTAs) that require mutual concessions. This approach could lead to the replacement of AGOA with FTAs, fundamentally altering the existing trade dynamics.
Kenya's utilization of AGOA has been limited, engaging in fewer than six of the over 6,000 available tariff lines. A significant factor is the reliance on imported raw materials, particularly textiles from China, for its apparel industry. This dependency raises concerns, especially in light of ongoing U.S.-China trade tensions, which could disrupt supply chains and affect Kenya's manufacturing sector.
In summary, the future of AGOA under the 'America First' policy remains uncertain. African nations, including Kenya, may need to adapt to a changing trade environment that favors reciprocal agreements, necessitating strategic adjustments to maintain and enhance their export competitiveness.
~Anthony Mwangi (Former CEO, KAM)
