TRALAC - Trade Law Centre

Kenya: Over 40,000 jobs in textile industry on the chopping board

Wednesday, 09 May 2012

Source: Standard (Kenya)

Over 40,000 workers in apparel industry are likely to lose their jobs by September if the third country fabric provision is not renewed in time.

The third country fabric is a provision in the African Growth and Opportunity Act (Agoa) that allows American firms to import duty free apparels from Sub-Saharan Africa.

On September 30, the provision will expire without much commitment to renewal threatening lives of many – mostly women who work in the apparel sector.

“Third country fabric is the most successful components of Agoa legislation and is credited with over 100,000 direct jobs in Sub-Saharan Africa,” said Mutule Kilonzo, Chief Executive Officer, Export Processing Zone Authority.

Lobby for extension

“The impact of the delay is already being felt with several orders drying up due to the uncertainty surrounding the provision,” Mutule said.“We are calling on our new minister with all the connections and expertise in diplomacy to help us lobby for the extension of this provision and a predictable Agoa,” he said.

The apparel industry in Sub-Saharan Africa countries rely on the third country fabric provision.

There is a real possibility that investors in the apparel factories will move to other parts of the world as happened in Madagascar following its loss of Agoa eligibility in 2009.

The Africa Cotton Textile Industries Federation (ACTIF) and other stakeholders have been pressing the US Congress for the past two years to renew the third-country fabric provision before the end of last year because apparel orders are typically placed nine months ahead of delivery date.

ACTIF members have advised US buyers are shifting orders for delivery after October 1, away from African producers to Asia out of concern that duty-free status of apparel from Africa may expire next year.

Speaking during the inauguration of the second phase of the Athi River Small and Medium Enterprises Incubation Park, Mr Mathenge Wanderi called on timely interventions to save over 40,000 workers from losing their jobs.

 

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