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Economy

Women trousers and shorts top list of Kenyan exports to the US

Workers make garments at a plant in Athi River. PHOTO | FILE
Workers at a textile firm based at the Export Processing Zone in Athi River. PHOTO | FILE 

Women’s trousers and shorts topped the list of items ordered by Americans from Nairobi under the duty-and-quota free deal in the first half of the year.

Official data shows that the United States ordered women trousers and shorts worth Sh4.2 billion in the year to June, a 23.5 per cent growth compared to Sh3.4 billion in a similar period of 2015.

The export of women’s wear has grown steadily over the last three years from Sh2.9 billion in the first half of 2013, according to data from the Kenya National Bureau of Statistics (KNBS).

At Sh4.2 billion women’s trousers accounted for nearly a third of the Sh13.4 billion value of clothes shipped from Nairobi to Washington in the year to June, having grown by Sh1.5 billion or 12.6 per cent.

This means local producers of the product reaped high returns in the review period, making the segment a lucrative niche market.

“The growth is attributable to the ease of doing business with investors expanding their businesses while new companies entering the market,” said Rajeev Arora, the advisor to Textile Value Chain of Kenya at the Industrialisation ministry. The KNBS data shows that women’s trousers exports from Kenya to the US have grown 44 per cent over the past three years, adding shine to the struggling local apparel industry.

Kenya is a beneficiary of the US preferential trade pact, the African Growth and Opportunity Act (Agoa), which allows sub-Sahara African countries to export goods to America tax-free.

Textiles and apparel account for over 80 per cent of Kenya’s total exports to the US under the pact. Last week, State House said it was looking to expand the list of products for export to the American market under Agoa as competition intensifies in the garment and apparel segment.

“Also of interest are meetings on improving access under Agoa,” State House spokesperson Manoah Esipisu said ahead of last week’s visit to the US by top government officials.

“We are looking to further improve Kenya’s exports to the US market under this programme.” Neighbouring Ethiopia has also been bullish on production of textiles and leather for export in its special economic zones, dominated by Chinese firms.

Mr Arora expects further growth in exports with the development of a proposed textile city at the Export Processing Zone (EPZ) complex in Athi River.

The EPZ promotes commodity exports and hosts firms like Celebrity Fashions, Global Apparels Ltd, Future Garments, Africa Apparel Ltd, Ashton Apparel, Mombasa Apparel and MK Apparel.

Kenya’s apparel landscape has recently been on the radar of US global fashion houses. In 2014, US-based Calvin Klein, Timberland and Tommy Hilfiger toured the EPZ complex eyeing space in the proposed multi-billion shilling textile city.

Kenya is betting on the EPZ to revamp the industry which was a key forex exchange earner and jobs creator in the 1980s before market liberalisation in 1991 opened floodgates of cheaper imported second-hand clothes.

Investors will enjoy a 10-year corporate and withholding tax holiday, value added tax (VAT) and stamp duty exemptions and utility connections.

The KNBS data shows, however, shows that US imports of women’s skirts dropped 43 per cent to Sh237.1 million in the year to June. Imports of women’s blouses also dropped four per cent to Sh298.1 million compared to Sh311.8 million in the first six months of 2015.

The US imported Sh3.5 billion worth of men’s trousers and shorts in the review period up from Sh3 billion representing a growth of 16.6 per cent.

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