Market News

Kenya’s Agoa exports climb to Sh50 billion

EPZ

Workers at the Export Processing Zone in Athi River. FILE PHOTO | NMG

geraldandae

Summary

  • Export of duty-free goods to the US under the African Growth and Opportunity Act (Agoa) has crossed the Sh50 billion mark after declining last year.
  • The goods, mainly textile products, increased from Sh42.2 billion in 2020 to Sh50.6 billion in the review period.
  • Capital investment increased to Sh23 billion last year from 19.1 billion in 2020 while direct employment in the sub-sector increased by 10.5 percent to 50,359.

Export of duty-free goods to the US under the African Growth and Opportunity Act (Agoa) has crossed the Sh50 billion mark after declining last year.

Data from the Kenya National Bureau of Statistics (KNBS) indicates that the value grew by 20 percent, marking one of the biggest leaps in seven years.

The goods, mainly textile products, increased from Sh42.2 billion in 2020 to Sh50.6 billion in the review period.

“All the selected indicators under the EPZ garment and apparel subsector reported growths in 2021,” said the KNBS.

Capital investment increased to Sh23 billion last year from 19.1 billion in 2020 while direct employment in the sub-sector increased by 10.5 percent to 50,359.

Agoa allows Kenya to export selected goods at preferential terms, exempting them from paying tax.

Textile and apparel products, which have dominated exports under Agoa since it was enacted in 2000, remain the main items in Kenya-US trade, defying efforts made at product diversification over the 18 years.

Increasing trade volumes and range of products are some of the grounds that Kenya used to successfully push for a 10-year Agoa extension, now open up to 2025.

Nairobi’s bid to expand its initiative beyond apparel falls short of its exports target as the volumes of tea, coffee, and edible oil, which Kenya has been shipping to the US remain low.

6,000 products

The initiative, which was expected to end in 2015 after an initial deadline of September 2012, was extended for 10 years.

It allows Kenya to export more than 6,000 product lines.

Kenya and the US have started talks aimed at extending the current free trade deal before Agoa ends in the next three years.

Deal delays

The officials from the US government and Kenya started another round of trade talks last week, signalling a fresh direction after the Biden administration froze Trump-era negotiations on the free trade agreement.

The proposed trade deal has faced delays after the Biden administration sought more time to scrutinise the pact negotiated by Donald Trump.

Assistant United States Trade Representative for African Affairs Constance Hamilton led a delegation to Kenya to explore opportunities for enhanced trade and investment engagement.

[email protected]