AGOA earned Kenya about Sh21.5 billion last year. But much remained to be done to broaden exports to the US, a top American trade official said yesterday.

However, the African Growth and Opportunity Act (AGOA) regional adviser, Mr Finn Holm-Olsen, said Kenya should look further than exporting textiles to his country.

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Under AGOA, the 37 eligible African countries can export almost any product (nearly 6,500 tariff lines) to the US duty-free.

"Kenya should diversify its exports by including handicraft and cut flowers," he said at an Agoa opportunities awareness workshop at Nairobi's Stanley Hotel. "Agoa is much more than apparel."

Last year, Kenya's textile and apparel exports to the US under Agoa amounted to Sh20.4 billion, 95 per cent of Kenya's total Agoa exports. The Agoa Acceleration Act of 2004 extended the trade benefits for an additional seven years to 2015.

However, the textile exports to the US are under threat from cheaper Chinese textiles, after the World Trade Organisation (WTO) scrapped the quota system in January.

But Mr Holm-Olsen said Kenya's textiles had a chance to compete with China's if the local transport system is made efficient and the cost of energy brought down.

It took less time to move a container from the Middle East to Mombasa than it took to transport it inland, he said. "The cost and time involved affect how business is done," he said.

Mr John Akara, the Export Processing Zones Authority's operations manager, agreed that the cost of doing business in Kenya was high and said railway transport had been an impediment to export business.

However, he said the concessioning of Kenya Railways would make rail transport more reliable and cheaper. Mr Holm-Olsen called for cotton sector linkages, from growing to making fabric, instead of relying on imported yarn to make textiles.

Though the Agoa Act allows textiles made from exported cotton to be exported to the US, the opportunity to import the fabric outside eligible African countries is scheduled to end in 2007.

By September, 2007, the countries must have a regionally self-sufficient textile industry to supply fabric for textile-related products for the US market to be able to enjoy tariff-free access.

Kenya's exporters will no longer be able use fabrics from non-African sources. Lack of adequate supply of fabric in Kenya and Africa could render the business uncompetitive.

Therefore, it is critical for Kenya to take steps to improve supply of export quality fabric.

Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Kenya’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.

Other regularly updated trade statistics on AGOA.info include: (click each link to view)