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US now second biggest buyer of Kenyan products

US now second biggest buyer of Kenyan products
Published date:
Friday, 06 February 2015
James Waithaka

The value of Kenya's exports to United States increased by nearly a third in the first 11 months of 2014, rendering the US her second most important market after Uganda.

Latest official data show the US bought goods worth Sh35.53 billion by November, 28.5 per cent higher than the Sh27.64 billion raked in over a similar period in 2013.

The US is catching up fast with Uganda, the biggest buyer of Kenyan goods, but whose purchases over the period slumped by 11.4 per cent to Sh43.31 billion, from Sh48.87 billion in the previous year.

USA has leapfrogged the United Kingdom, Tanzania and Netherlands from the fifth position in 2013. This has been attributed to favourable trade policies between it and the African continent, notably through the African Growth and Opportunity Act, which offers export incentives on many commodities.

Kenya's imports from the US have also grown rapidly over the same period, owing to capital goods such as aircraft, locomotives and spare parts.

In the 11 months, Kenya's total purchases from USA were worth Sh162.58 billion, more than triple the Sh51.42 billion worth of goods shipped in by end of November 2013.

The AGOA deal is set to expire on September 30 after a 15-year run, which is likely to put a damper on Kenya's exports to the US if not renewed.



Kenyan trade officials are nonetheless optimistic that it will be renewed by then despite the bureaucracies involved.

"This is not the first time we have been in a situation like this; it's not an easy process to make recommendations and get institutions that have to approve, especially like the Congress," Moses Ikiara, managing director of Kenya Investment Authority, told the Star in the sidelines of a Federation of Kenya Employers conference two weeks ago.

Under the Act, Kenya exports tonnes of textiles and clothing to the US but barely utilises its quota fully.

Ikiara said there are plans to host a Kenya-US business conference in Nairobi in September as a follow up to a US-Africa Business Summit held last August.

"Kenya is fast emerging as a major business partner for the US, and as the rest of Africa, it is becoming more important. To manage the trade imbalance, there must then be a chance to export to the US through arrangements such as AGOA," he said.

Under AGOA, Kenya can export up to 6,000 different products but only does a few currently, in what Ikiara cites as "domestic supply constraints". The country must thus build a critical mass of the various goods allowable to make sense of exporting, he said, including standardisation.

"It is not so much about market access," Ikiara, adding that KenInvest, Ministry of Foreign Affairs and International Trade, and embassies are coordinating to benchmark progress on extension of the trade pact.


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