Orders to the US will be the hardest hit if the disruptions of supplies from China does not ease in three months.
This is because textile and apparel factories, which predominantly source intermediate materials from China, are the most affected.
Kenyan exports to the US enjoy duty- and quota-free entry under Africa Growth and Opportunity Act (Agoa) that expires in 2025.
Kenya’s US market tops the list of immediate casualties tied to coronavirus outbreak as raw material shortage forces firms to delay export deliveries.
Orders to the US will be the hardest hit if the disruptions of supplies from China does not ease in three months, the Kenya Association of Manufacturers (KAM) has warned in a report to the Trade ministry.
This is because textile and apparel factories, which predominantly source intermediate materials from China, are the most affected.
The US is the second largest buyer of Kenya’s goods after landlocked Uganda, with orders made of largely textile and apparels rising 9.53 percent to Sh51.85 billion in 2019, according to provisional Central Bank of Kenya (CBK) statistics.
Kenyan exports to the US enjoy duty- and quota-free entry under Africa Growth and Opportunity Act (Agoa) that expires in 2025.
KAM, citing feedback from its members, says manufacturers are staring at “liability and reputational risks due to failure to meet delivery orders”.
“The majority of Kenyan manufacturers are negatively affected by the outbreak of coronavirus in China,” the sector lobby says in findings of a survey on 45 companies.
“65 percent of manufacturers foresee a shortage in their finished product within the next three months due to reduced supply of material inputs from China.”
The survey established eight in 10 factories in Kenya (82.16 percent) directly source materials or export finished goods to China.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
