Dismal performance by Kenya in the expansion of its exports beyond apparels to the United States under the African Growth and Opportunity Act (Agoa), 18 years since the law was enacted, should be a cause of concern.
The enactment of Agoa was meant to boost Kenya-US trade and narrow the deficit between our imports and exports that favours America.
In the 11 months of the year ending November 2017, Kenya’s total exports to the US were Sh43.932 billion compared to imports totalling Sh52.373 billion, which translates to nearly Sh10 billion trade deficit, according to Central Bank of Kenya data.
What Kenya needs to bridge the trading gap with the US as well as other countries is to step up its value addition of top exports such as coffee and tea to fetch higher prices in the foreign markets compared to the export of raw materials.
Policymakers also need to evaluate the strategies put in place to tap the business window offered by Agoa that is set to elapse in 2025.
Indeed, Kenya was in the forefront in pushing for the renewal of the Act but it seems to be stuck with traditional exports, making a strong case for diversification of production.
To this end, Kenya needs to put its house in order to spur industrial growth by addressing the challenges that are seeing many industries closing shop or opting to shift operations.