Kenya Eyes Long-Term Trade Deal After 1Year AGOA Extension

Kenya has secured a one-year extension of the African Growth and Opportunity Act (AGOA), ensuring continued duty-free access for its exports to the United States, President William Ruto said on Saturday.

“When we were in America, we had talks with the officials and they agreed to extend AGOA by one year,” President Ruto said in Nairobi, adding that the decision would safeguard thousands of jobs in Kenya’s export sector.

The extension provides a major reprieve for East Africa’s largest economy, whose apparel, textile, coffee, and horticultural exports to the US have benefited from preferential access under the trade programme since 2000.

AGOA had been due to expire this year after 25 years in effect.

Under AGOA, more than 6,000 products from eligible African countries enter the US market duty-free.

Kenya is one of the leading beneficiaries, with apparel shipments forming the bulk of exports to the American market.

The country’s Export Processing Zones employ over 60,000 people directly, most of them women working in the garment industry.

Trade officials said the renewal will sustain investor confidence in Kenya’s manufacturing and export sectors, allowing exporters to maintain contracts and expand output without the uncertainty of new tariffs.

Analysts warn, however, that the one-year extension is only a temporary reprieve. Without a longer-term framework or a bilateral trade deal, Kenya risks losing competitiveness once AGOA expires.

“The extension buys us time,” one trade expert said, “but we must use this period to secure a permanent arrangement.”

If Kenya had been locked out of the programme, its goods would have faced import duties of up to 30 percent in the US eroding margins and making its exports less competitive compared to countries such as Vietnam or Bangladesh.

That could have led to factory closures, job losses, and a sharp decline in foreign exchange earnings.

President Ruto said Kenya would use the extension period to negotiate longer-term trade arrangements that protect local industries and attract new investment.

AGOA was enacted by the US Congress in 2000 to promote economic growth and integration in sub-Saharan Africa by granting duty-free access to the US market.

Over 30 African countries currently benefit from the programme, which has helped expand regional manufacturing capacity, attract foreign investment, and support millions of jobs across the continent.

gandae@businessdayafrica.org