Textile and apparel firms operating under the Africa Growth and Opportunities Act (Agoa) that allows free access to the American market for designated goods are uncertain about the future of the arrangement.

As the September 2012 deadline by which they should locally source raw materials approaches, the US government is yet to react to the industry appeal to push the date back to September 2015.

As a result, the textile manufacturers say, their clients abroad are “nervous” about their ability to guarantee continued supply, threatening to reverse gains made in recent years.

The Trade ministry says it has formed a national committee on Agoa to guide the sector and offer advice on the matter.

“We are optimistic that the period will be extended, and there should be no worry by the manufacturers. The Lusaka conference last year made recommendations, and we are working well with the US to have the matter settled,” said Mr Joseph Kosure, a senior ministry official in charge of Agoa.

Possible delay

But the manufacturers remain anxious over the possible delay in extending the period and its implications for their businesses.

“The period left is very short, and the buyers are nervous about continued supply. The orders that fall during the spring in March for supply in December are likely to be affected,” said Mr Jaswider Bedi, a Nakuru textile manufacturer.

Agoa’s third-country fabric provision is currently authorised only until September 30, 2012, after which African countries are expected to source raw materials like cotton lint and yarn locally.

Agoa was initiated by former US President Bill Clinton to provide affirmative action to African states to access the American market as a way of alleviating poverty.

African states, including Kenya, are expected to comply with the provisions of Agoa IV, which require that they source raw materials domestically or from other developing countries by September this year.

But manufacturers say this is impossible even after the government offered incentives to the cotton industry; they want the period extended to 2015 to enable the industry to build capacity to meet local demand.

Manufacturers want the US government to settle the matter urgently to avoid possible cancellation of orders.

“The textile and apparel industry earned the country $292 million last year, making Kenya the largest supply from Africa to America under Agoa. We do not want to lose the growth momentum,” Mr Bedi said.

Manufacturers warn that further delays in extending the compliance period will bring uncertainty with the possible loss of hundreds of thousands of jobs.

Kenya’s export processing zones rely on raw materials from their competitors in China, India, Bangladesh and Malaysia. Experts say this has denied the local textile industry the vital backward linkage to local farmers, which could have had a significant impact on their livelihoods.

Despite government initiatives to improve cotton production in recent years, including the creation of the Cotton Development Authority and higher producer prices, not much has been achieved in breathing new life into cotton growing, once a mainstay of Kenyan agriculture.

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)