Kenya’s AGOA exports climb to Sh50 billion

Kenya’s AGOA exports climb to Sh50 billion

Trade between the United States and Kenya by sector

All values in $ '000

Published date:
Tuesday, 10 May 2022

Export of duty-free goods to the US under the African Growth and Opportunity Act (Agoa) has crossed the Sh50 billion mark after declining last year.

Data from the Kenya National Bureau of Statistics (KNBS) indicates that the value grew by 20 percent, marking one of the biggest leaps in seven years.

The goods, mainly textile products, increased from Sh42.2 billion in 2020 to Sh50.6 billion in the review period.

“All the selected indicators under the EPZ garment and apparel sub-sector reported growths in 2021,” said the KNBS.

Capital investment increased to Sh23 billion last year from 19.1 billion in 2020 while direct employment in the sub-sector increased by 10.5 percent to 50,359.

Agoa allows Kenya to export selected goods at preferential terms, exempting them from paying tax.

Textile and apparel products, which have dominated exports under 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.

Nairobi’s bid to expand its initiative beyond apparel falls short of its exports target as the volumes of tea, coffee, and edible oil, which Kenya has been shipping to the US remain low.

6,000 products

The initiative, which was expected to end in 2015 after an initial deadline of September 2012, was extended for 10 years.

It allows Kenya to export more than 6,000 product lines.

Kenya and the US have started talks aimed at extending the current free trade deal before Agoa ends in the next three years.

Deal delays

The officials from the US government and Kenya started another round of trade talks last week, signalling a fresh direction after the Biden administration froze Trump-era negotiations on the free trade agreement.

The proposed trade deal has faced delays after the Biden administration sought more time to scrutinise the pact negotiated by Donald Trump.

Assistant United States Trade Representative for African Affairs Constance Hamilton led a delegation to Kenya to explore opportunities for enhanced trade and investment engagement.

View related news articles

Kenya businesses 'want continued duty-free access'

The Biden administration has been clear that none of its trade negotiations cover tariffs. That includes talks with the U.K., the EU and the Indo-Pacific region, as well as the Strategic Trade and Investment Partnership talks with Kenya. In Kenya’s case, the country already has duty-free access to the United States for most of its goods under the African Growth and Opportunity Act. But the Biden administration has not said yet...

26 September 2022

US overtakes Uganda to become the largest market for Kenyan goods

The United States has overtaken Uganda to become the largest market for Kenyan goods, according to a report by Business Daily. Citing official data, the publication reported that Kenya’s exports to the US grew by 47 percent to Sh38.8 billion in the first half of the year, ending Uganda’s 10-year dominance as the leading export destination for Kenya-made goods. In the period under review, Ugandan consumers bought Sh36.2 billion worth of...

22 September 2022

Kenya seeks a temporary pact with the US ahead of full FTA

Kenya is currently seeking a placeholder trade partnership with the United States as negotiations for a fully-fledged free trade agreement (FTA) continue between the two countries. Outgoing Trade Cabinet Secretary Betty Maina said she expects the new administration under President William Ruto to continue engagements with the US. “What we are currently in discussions over is the development of a strategic trade and investment partnership...

13 September 2022

US seeks public views on new trade deal with Kenya [incl. file]

President Joe Biden’s administration is seeking views from American and Kenyan firms on the proposed fresh free trade window as it lays grounds for a new pact. The call follows fresh trade talks Washington opened with Nairobi in July. The United States Trade Representative Office (USTR), which has been spearheading the talks, said comments received from interested parties will help the USTR as it develops negotiating objectives and...

15 August 2022

AGOA's 'expiry clause has limited Kenya's ability to attract long-term investment', MIT Secretary says

Kenya has struggled to attract long-term, capital-intensive investments under the more than two decades-Growth and Opportunity Act (Agoa) deal with the US largely because of the pact’s expiry clause, the Trade minister has said. Betty Maina, the Industrialization and Trade secretary, says big-ticket investors have not been keen on setting up factories for duty- and mostly quota-free exports into the expansive US market, limiting the product...

14 August 2022

US looks beyond delayed free trade deal in commercial ties with Kenya

The US government is looking beyond a delayed trade deal with Kenya to expand commercial ties between the two countries amid Nairobi’s mounting frustration with Washington's slow pace to conclude the deal. In a new report submitted to the US Congress by Joe Biden’s top trade diplomat Katherine Tai, the US government revealed it would pursue “other means” of deepening trade engagements with Kenya in the absence of a free trade...

30 May 2022

Kenya 'reaps Sh10 billion after Ethiopia's ban from AGOA deal'

Kenya earned an additional Sh10.2 billion from its exports to the US as Nairobi reaped big from Ethiopia’s suspension from a duty-free trade pact. Last year, Kenya’s exports to the US — mostly apparel were valued at Sh59.6 billion, a jump of more than a fifth from Sh49.4 billion in 2020 as Kenyan traders sold more goods through the African Growth and Opportunity Act (Agoa), a free trade agreement between Washington and select African...

24 May 2022

USTR to lead delegation to Kenya to explore trade, investment

Assistant United States Trade Representative (USTR) for African Affairs Constance Hamilton will lead a delegation to Kenya on May 1 to explore opportunities for enhanced trade and investment engagement, USTR spokesperson Adam Hodge said on Friday. The delegation will include subject-matter experts from USTR and the Departments of State, Labor, Commerce and Agriculture, he said. The visit follows recent meetings between top U.S. trade...

29 April 2022

US protests Kenya’s ban on GMO products

The United States government has slammed Kenya for its failure to approve imported genetically modified (GM) foods and crops saying the measure is restricting its exports. The US Trade Representative's office (USTR) said in its annual report approval by Nairobi could boost agricultural purchases from the US by Kenya which is the world’s biggest producer of GMO crops. Kenya has been reluctant to approve the import or planting of genetically...

13 April 2022

Kenya private sector alliance recruits first beneficiaries of Kenya-US trade initiative

The Kenya Private Sector Alliance (KEPSA), has announced the recruitment of the first cohort of twenty-five businesses in the Kenya-US Small and Medium Enterprises Trade Initiative. The twenty-five local SMEs, looking to either scale up globally or grow exports to the US market, will be provided with sector-specific information on business opportunities in the US markets. This is in addition to imports and exports business exchanges among...

16 March 2022