Kenya is heading back to the drawing board after its six-year attempt to promote the duty-free export of coffee, tea, cut flowers, food ingredients and home décor failed to boost its US trade volumes.
Textile and apparel products, which have dominated exports under the African Growth and Opportunity Act (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.
“Kenyan exports are dominated by textiles and apparel,” reads in part the findings of a review of the current strategy undertaken by the national committee on Agoa.
“Clothing for men and women as well as apparel fabrics articles constituted a huge export volume base totalling to at least 65 per cent of the total goods exported in the year 2016.”
Trade ministry data shows that value of exports to the US grew to Sh55.billion ($ 551.5 million) in 2016.
The Agoa window provides duty-free market access to the US market for 6,421 product lines to eligible sub-Saharan Africa countries, among them Kenya.
Since then, there have been four extensions of the programme in August 2002; July 2004; December 2006. The last, in June 2015, extended Agoa for a further 10 years to 2025, including third-country fabric provisions.
In 2012, the Trade ministry teamed up with US Agency for International Development USAID to develop the strategy that picked coffee, tea, cut flowers, food ingredients and home décor as the first Agoa trial products.
Of the products, only coffee, fruits and nuts exports have made significant inroads over the last 18 years with exports rising to nine per cent of 2016 exports to the US, the National Committee on Agoa says.
Almost two decades since the duty-free trade window was first granted, says National Agoa Committee, its exploitation is still slowed down by a lack of market knowledge, failure to comply with required standards, high cost of doing business and quantity constraints.