AGOA 3 Action Committee Hails Agreement On H.R. 4103
Export Processing Zones have developed into one of the few success stories in local manufacturing, and nowhere is this more visible than in the manufacture of apparel for export to the American market.
About 40 factories - riding on the back of the tariff-free market access accorded by a special US trade law - have spawned a $164-million industry and created over 30,000 jobs.
But beyond the gloss of impressive figures, there is another not-so-rosy side to the Agoa story in Kenya. It is one of poor quality jobs, the dominance by foreign investors and lack of substantial local content in the final product, besides labour.
Recent efforts by some of these factories to improve their working conditions, some of which have been likened to the "sweatshops" of South East Asia - and sometimes not without a basis - are laudable.
It is a grave indictment on the Government that the Agoa jobs were largely celebrated on the mechanical basis of absolute numbers rather than any life-improving and value-adding qualities.
As Kenya joins other African states in lobbying the US Congress to have the Agoa privileges extended beyond the 2008 deadline, there is hope yet that the Act will be used as a template to re-construct Kenya's collapsed textile industry.
The clause that allows countries like Kenya to buy their raw materials from non-Agoa states expires in September, and Kenya has naturally joined the push to have this extended.
With 85 per cent of the Agoa exports still made from raw materials from developing countries, it will be some time before Kenya develops a vertically-integrated textile industry.
Unfortunately, there is no evidence of any serious Government effort to motivate farmers to grow cotton to supply these factories in the long run.
As long as this situation obtains, the transient Agoa privileges will create little wealth in Kenya, besides feathering the nests of a few foreign investors.
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