Kenya’s businesses and their American partners have intensified calls for a transition period as the clock ticks towards the expiry of the African Growth and Opportunity Act (Agoa) to cushion workers and investors against the shock of a sudden lapse.
The American Chamber of Commerce in Kenya (AmCham) and the Kenya Private Sector Alliance (Kepsa) have warned that the absence of a one-to two-year adjustment window would disrupt supply chains and trigger job losses in Kenya’s apparel sector and America’s logistics, retail, and distribution sectors.
AmCham, Kenya CEO Maxwell Okello gestures during a past interview at his office in Westlands, Nairobi.
Photo credit: File | Nation Media Group
The business lobbies say the transition window will come in handy in the event the United States Congress does not renew Agoa, which expires next Tuesday, in time.
“Agoa is more than trade policy—it is a mutually beneficial economic and strategic partnership,” AmCham Kenya wrote in its position paper.
The Agoa treaty, initiated under the Bill Clinton administration in 2000 to integrate sub-Saharan Africa into the global economy and wean it off donations, was initially intended to last for 15 years from the year 2000 before being extended for a further 10 years in June 2015.
The renewal of the Agoa pact will need approval of the US Congress, controlled by the protectionist President Donald Trump’s Republican Party.
Kenya’s textile and apparel industry is one of the biggest Agoa beneficiaries, earning a record Sh60.57 billion from textile sales to the United States in 2024 — a growth of 19.20 percent over Sh50.82 billion in the prior year.
The sector directly supported 66,804 jobs in 2024, according to the latest staff count published by the Kenya National Bureau of Statistics.
AmCham, Kepsa, and US retailers appeared aligned in urging Washington to renew Agoa before its September 30 expiry. At stake are not only tens of thousands of Kenyan jobs, but also the US supply chain resilience, consumer savings, and influence in Africa.
For the US, Kepsa wrote in a statement, the zero-tariff pact delivers $200 to $250 million (Sh25.85 billion to Sh32.31 billion) in consumer savings annually by lowering the cost of everyday goods such as jeans and uniforms.
Kepsa is pushing for renewal of Agoa for another 16 years or, at the very least, provide a one-to-two-year transition period, while Kenya negotiates a bilateral deal with the Trump administration.
Kenyan workers prepare clothes for export at the United Aryan Export Processing Zone (EPZ) factory, operating under the US African Growth and Opportunity Act (Agoa), in Ruaraka, Nairobi, in October 26, 2023.
Photo credit: File | Reuters
The push gained further momentum when the top American apparel retailers and importers, along with the American Apparel & Footwear Association (AAFA), met Cabinet Secretary for Investments, Trade, and Industry Lee Kinyanjui on Wednesday in New York, where global leaders were gathering for the 80th UN General Assembly.
Mr Kinyanjui told the meeting, organised by the Kenya Investment Authority (KenInvest), that Nairobi has already submitted all required documentation for an interim extension and urged Washington to act quickly. The minister was optimistic that a deal would be struck, underscoring the “special bond and strategic relationship” between the two countries, spanning trade, investment, and security.
Mr Trump’s insistence on a reciprocal tariff policy in trade negotiations has raised anxiety amongst beneficiaries of the tax- and quota-free Agoa pact over its renewal upon expiry on September 30.
Carole Kariuki, the Kepsa chief executive, said Agoa was “the single most effective” US policy tool in Africa over the last 25 years, supporting industries and creating jobs.
The Agoa pact allows access to more than 6,000 products, such as food and beverages, wood, plastics, and rubber, to the US from sub-Saharan Africa. But Kenya has largely tapped the apparel line, alongside small quantities of macadamia nuts.
Kenya’s private sector insists extension of the two-and-a-half deal provides an opportunity for growth in apparel exports from nearly $600 million to $2 billion, potentially creating 200,000 new jobs through backward integration in textiles, yarn, and cotton.
AmCham flagged the competitive pressures from China, which has granted zero-tariff access for 98 percent of African exports. With 90 percent of fabric inputs for African apparel still sourced from Chinese suppliers, the business lobby adds that retaining Agoa’s Third Country Fabric (TCF) provision— which allows manufacturers in eligible sub-Saharan African countries to utilise fabrics sourced from any country — is critical for Kenyan factories to remain competitive in the US market.
