- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Kenya: Flowers a Growing Sector Amid Recession

Kenya: Flowers a Growing Sector Amid Recession

Kenya: Flowers a Growing Sector Amid Recession
Published date:
Friday, 23 January 2004

At this particular period of time when most African countries are faced with economic difficulties the need to tap the lucrative American market by taking advantage of the African Growth and Opportunity Act (AGOA), which allows non-quota, duty-free entry of a range of African products such as textiles and leather goods into the US market from countries adhering to open market reforms, is becoming more and more evident.

It will be recalled that sometime ago the Corporate Council on Africa (CCA) hosted the fourth biennial US-Africa business summit in Washington, bringing together key public and private representatives with a common goal of increasing business ties between the US and Africa.

The outcome of that meeting has no doubt stimulated business as per the AGOA initiative to the advantage of the concerned African countries.

Consequently, many African countries are set to benefit from AGOA, for instance Kenya estimates that AGOA will create 50,000 new jobs directly and more than 100,000 jobs indirectly.

South Africa anticipates about 100 million dollars in investment in its textile and apparel facilities creating 13,000 jobs. Lesotho, one of the smallest countries in sub-Saharan Africa, has become one of the biggest beneficiaries of AGOA, attracting over 120 million dollars in new investment.

Obviously, Africa's future should be closely tied to its potential to grow economically and provide education, health care, infrastructure and security. Increased trade will help Africa grow economically as AGOA is supposed to generate tangible results in terms of expanded trade, employment opportunities and technological improvement.

While it is agreed that AGOA is not a panacea for all Africa's economic woes, nevertheless it is believed that it is an important contribution, which aims at improving Africa's trade performance.

Ethiopia is one of the sub-Saharan African countries that should exploit the AGOA initiative. So far the country is placed among the least benefited from the opportunity by exporting only 0.01 percent of the total African export to the US under the AGOA initiative.

The reasons for this are many but quality-related problems are the major among others. Obviously, quality is a very important term in business and the only password for competitiveness.

The country's low performance is caused by factors such as lack of access to information, limited exposures, and lack of technical support.

Africa needs to appear on the world market with its produce in a way which would ensure a stable and persistent demand for their products thus making the continent's industry an integral part of the world economy and this could be done only through strengthened productive capacities able to produce competitive goods and services.

For Africa the challenge of penetrating the US and indeed the world market is primarily a matter of improving competitiveness.

Issues of standardization and quality assurance should be given utmost priority. External trade of most African countries has for too long depended on a marrow range of exports.

Given wide fluctuations in prices, the risks of depending on a narrow range of commodities are very real. Such dependence undermines Africa's capacity to adjust to external shocks, therefore, the issue of diversifying exports and markets becomes prime concern to Africa and in this respect attention needs to be given to the range of commodity in which African countries have a comparative cost advantage.

The AGOA initiative is said to be in operation for only a limited period of time. Let us take advantage of it while we can.

Read related news articles

Ruto's State visit spotlights Kenya's centrality to Africa-US relations [Download Facsheet]

President Joe Biden's choice of Kenya for a first African state visit in more than 15 years is no coincidence, but both countries must be clear on what is driving this increasing strategic dependence. Kenyan President William Ruto's arrival in Washington on 22 May ends a historic drought. No African leader has made a state visit to the US since John Kufuor of Ghana in 2008 - three times longer than the previous record gap, but a period that...

23 May 2024

Senator Coons talks US and sub-Saharan African countries partnership amid Kenyan President’s visit

In case you missed it, U.S. Senator Chris Coons (D-Del.) discussed Kenyan President William Ruto’s visit to the United States this week and the need for Congress to advance a reauthorization of the African Growth and Opportunity Act (AGOA) in an interview with Devex yesterday. A major area of interest for President Ruto is the trade relationship between the United States and Kenya, and his visit is expected to lend support to the...

22 May 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

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

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

US boosts Kenya apparel industry with $55m in new trade deals

The US is giving Kenya $55 million for expansion of export processing zones in a move that will boost Nairobi’s apparel exports. US initiative Prosper Africa and the US Embassy announced the funding at the launch of the US-Kenya Business Roadshow held on April 25 in New York. The announcement was part of the commitments made by President Joe Biden at the US-Africa Leaders’ Summit last year. The funds will be channelled under USAid and...

29 April 2023

You are here: Home/News/Article/Kenya: Flowers a Growing Sector Amid Recession