Kenya, Ethiopia ahead of region in benefits of AGOA treaty
Kenya led the East African Community members in its use of the Africa Growth Opportunity Act (Agoa) treaty, scoring 98 per cent.
However, it came second to Ghana which recorded 99.1 per cent with Madagascar coming third at 93.7 per cent.
According to data contained in the US Trade and Investment with sub-Saharan Africa: Recent Trends and New Developments report, Ethiopia at 81.9 per cent and the Democratic Republic of Congo (DRC) at 68.2 per cent are the other eastern Africa countries that have also taken advantage of the treaty to increase exports to the US mainly of products like textile and apparels, metals, agricultural products and artefacts.
Increase in apparel exports by Madagascar, Ethiopia and Kenya resulted in US imports of apparel from the region under Agoa increasing by 9.9 per cent annually to $1.2 billion from 2016 to 2018.
“The 10-year extension of the Agoa programme and Agoa’s third-country fabric provision allowed countries to expand apparel production and were the primary causes of the increase in apparel imports,” stated the report.
Kenya’s high rate of Agoa utilisation comes when the country has announced intention to negotiate a US-Kenya free trade agreement that would see Kenya open its borders for duty-free imports from the US, while Nairobi would also get to export a range of goods tax-free to the US.
The two countries share around $1 billion in trade annually.
Notably, only 16 of the 39 Agoa beneficiary countries have prepared national utilisation strategies that identify sectors with the potential to increase exports to the US under the treaty that will expire in 2025.
Kenya, Tanzania and Rwanda are the only EAC countries that have complete utilisation strategies in certain industries like agricultural and food processing, textile and apparels, handicrafts, jewel and mining.
According to the report, US exports to sub-Saharan Africa countries rose from $13.5 billion in 2016 to $15.9 billion in 2018, a compound annual growth rate of 8.5 per cent.
Exports of petroleum products represented the largest portion of the increase followed by exports of aircraft, spacecraft and related equipment, certain motor vehicle parts, motor vehicles, natural gas and components and poultry.
Despite poultry farmers in Kenya companioning of lack of markets, US poultry exports into the region increased by 28.3 per cent to $465 million from $283 million during the 2016–18 period.
In deed in 2018, the US was the third largest global supplier of poultry to sub-Saharan Africa by value after the European Union and Brazil, with the region accounting for 11 per cent of US exports to the world.
“Rising population and incomes have led to increasing demand for meat protein food sources, which has boosted US exports of poultry to sub-Saharan Africa,” noted the report.
Read related news articles
Two years on: How Ethiopia's apparel sector is combatting AGOA uncertainty
During an exclusive side chat at Source Fashion in London, the president of Ethiopia's Hawassa Industrial Park Investors Association (HIPIA) Hibret Lemma, confesses Ethiopia is only just at the start of its shift away from relying solely on the US for its garment exports. He admits losing AGOA was a big hit to the country's garment sector and it slowed down growth considerably. However, Ethiopia's garment suppliers were hopeful that AGOA...
02 April 2024
Kenya: 4th AmCham business summit to advocate for enhanced partnership and investment In US-East Africa trade
The fourth edition of the regional American Chamber of Commerce Kenya (AmCham) Business Summit, the premier platform for strengthening bilateral trade and investment between the United States, Kenya, and East Africa is set to be held on April 24–25, 2024, in Nairobi, Kenya. Kenya’s President William Ruto is confirmed as Chief Guest, leading a government delegation to the summit that aims to expand commercial opportunities and markets....
19 March 2024
US President Biden to welcome Kenyan President Ruto to the White House in May
President Joe Biden plans to welcome Kenyan President William Ruto to the White House in May, hosting a state visit after reneging on his promise to visit Africa last year. White House press secretary Karine Jean-Pierre said Friday that the visit set for May 23 will mark the 60th anniversary of U.S.-Kenya diplomatic relations and "celebrate a partnership that is delivering for the people" of both countries while affirming "our strategic...
18 February 2024
'Nigeria missing as Kenya, Ghana tap AGOA opportunities to boost foreign exchange earnings'
Africa’s biggest economy is still failing to tap the opportunities that the African Growth and Opportunity Act (AGOA) present to boost its foreign exchange, amid acute dollar shortages. The AGOA has been on for over twenty-three years as it was enacted in 2020. In 2015, the program was modernised and extended to 2025, implying that there are only about 15 months before the window closes. Some countries have taken advantage of the AGOA more...
05 February 2024
Kenya-US to deepen ICT, apparel and agriculture trade
Kenya and United States are in talks to identify areas of interest in information communication technology (ICT) sector that can interest US firms. A meeting between The US Ambassador to Kenya, Megan Whitman, and the Cabinet Secretary for Investments, Trade, and Industry Rebecca Miano, the states sought cooperation in six key areas. The meeting laid the groundwork for an enhanced collaboration between Kenya and the United States in...
09 November 2023
US official reveals Ethiopia’s request for AGOA eligibility ‘still pending’, decision unlikely at upcoming forum
A US State Department official has disclosed that the decision to reinstate Ethiopia’s eligibility for the African Growth and Opportunity Act (AGOA) is “still pending”. Constance Hamilton, Assistant US Trade Representative for Africa, made this statement during a digital press briefing held on Thursday. “Those decisions are still pending,” Ms Hamilton told journalists from the continent, and that “there probably will not be...
27 October 2023
Kenya President Ruto joins US-Kenya business roadshow in San Francisco
Kenya's President William Ruto will address leading US technology companies and investors on Friday at the US-Kenya Business Roadshow in San Francisco organised by the American government’s Prosper Africa initiative. The roadshow - also co-organised by the US Embassy in Nairobi - highlights the business and investment potential in Kenya’s booming tech sector, a statement from the US Embassy in Kenya said. The event is part of a...
15 September 2023
AGOA boosts Kenya's textile exports to US, sector sees 7.2% growth
The African Growth and Opportunity Act (AGOA) has benefitted Kenya’s textile and apparel sector, leading to monthly exports to the tune of Sh4.5 billion, or Sh150 million per day, last year, according to a study by London-based Institute of Economic Affairs (IEA). The programme has had a positive impact on the country’s export-processing zones (EPZs), especially in the textile and garment sector. Kenya is the second-largest exporter of...
08 August 2023
'US-EAC trade pact comes into life amid disharmony'
The Trade and Investment Framework Agreement (Tifa) between the US and the East African Community has begun taking shape, with a section of the bloc’s members keen on it and others still biding their time. This week, US officials were in Nairobi to conduct part of the negotiations on the US-Kenya Strategic Trade and Investment Partnership and to meet Trade ministers from the region. On July 18, Trade ministers from Tanzania, Uganda,...
23 July 2023
Kenya's president meets US delegates on trade and investments
Kenyan President William Ruto has today held talks with US Trade Representative, Ambassador Katherine Tai. The discussions were based on US trade policy. Ruto said that the country is ready to strengthen the already existing relations between the two nations. "We will stretch our ties beyond the African Growth and Opportunity Act (AGOA) in the wake of advanced technology and climate change, for the full exploitation of our trade potential,"...
19 July 2023
US trade rep in Nairobi as Kenya's solo deals worry the EAC block [incl. Readouts]
The US trade representative is in Nairobi to co-lead a meeting that seeks Kenya's partnership in a fresh trade deal. The Trade and Investment Framework Agreement (TIFA Council) is pursuing various agreements even as regional peers express concern over Kenya's solo approach. Yesterday, Trade Representative, Katherine Tai met patron circle members of the American Chamber of Commerce-Kenya (AmCham Kenya) ahead of today's...
17 July 2023