TRALAC - Trade Law Centre

Kenya Doubles US Exports under AGOA

Wednesday, 13 August 2003

Source: The Nation (Nairobi)

Kenya's exports to the United States under the AGOA trade scheme nearly doubled during the first five months of 2003 in comparison to the same period a year earlier.

Signs of a boom in Kenya's sales to the US market are contained in a new set of figures published by the US International Trade Commission.

From January to May of this year, Kenya shipped $76.4 million worth of goods to the US through Agoa and another preferential programme that eliminates Customs duties on products from eligible countries. The figure for the corresponding portion of 2002 was $38.5 million.

Kenya's qualifying exports to the US in less than half of the current year have already surpassed the $59 million total for all of 2001. That was the first full year of operation for the Africa Growth and Opportunity Act.

The current trend also puts Kenyan traders on course for greatly exceeding the $129 million in Agoa-eligible goods they sold to the United States in 2002. An economic expansion now under way in the US suggests that Kenyan firms will profit from a rising demand for imports in the world's largest market.

An estimated 180,000 Kenyans have so far found jobs as a result of Agoa, according to a senior US State Department official. Some 30,000 Kenyans hold jobs directly related to Agoa while another 150,000 work in industries that support manufacturing for export under Agoa, Assistant Secretary of State for African Affairs Walter Kansteiner said at a conference in June.

Textiles and clothing account for most of the exports under the trade scheme.

Despite this year's surge, products from Kenya still account for only a bit more than one per cent of all Agoa-related exports from eligible countries in sub-Saharan Africa. US government statistics show that energy-related products, mainly from Nigeria and Gabon, represent more than 75 per cent of total Agoa exports from the sub-Saharan region since 2001. In addition to Nigeria and Gabon, the other leading exporters include South Africa, Republic of Congo, and Lesotho.

Kenya ranks sixth among eligible African countries in the volume of Agoa exports to the US. Concern was expressed yesterday at a meeting of Kenyan entrepreneurs that not much was being done to improve the country's trade position under Agoa.

Whereas Kenya was among the very first countries to get Agoa status it was still struggling to fulfil its quarter, Mr Manga Mugwe, chairman of the Kenya Association of Manufacturers, told the meeting in Nairobi.

"I am giving a wake-up call to entrepreneurs from micro, small and large enterprises in Kenya to re-programme their production in line with the Agoa provisions and seize the opportunity while the tide is high," he said.

Mr Mugwe said there were over 6,000 items under the Generalised System of Preferences (GSP) that can enter the big US market from Kenya.