African Growth and Opportunity Act expected to be extended by 15 years

Adan Mohammed, Industrialisation Cabinet Secretary says if Agoa programme is not extended, the country could suffer some shut-downs. [Photo: File]

The trade agreement that allows African countries to export goods to the US without duty is highly likely to be extended by another 15 years once it expires in September next year.

This is among the key outcomes of the just-ended US-Africa summit attended by 50 Heads of state and Government among them President Uhuru Kenyatta.

Kenyan government officials who attended the summit said yesterday they have strongly lobbied to have the African Growth and Opportunity Act (Agoa) trade agreement extended with a number of the US Congress members supporting this extension. However, the entire US Congress has to give their approval to the proposal.

“In principle, the extension has been agreed,” said Industrialisation and Enterprise Development Cabinet Secretary Adan Mohammed at a press conference to give update on the outcome of the summit, adding, “If these programmes are not extended, we could suffer some shut-downs.”

The agreement allows an access to the US market of over 6,000 goods duty free. Key among them are textiles and leather. The agreement is considered a key deal for Kenya as it helps the country to generate billions of shillings in revenues and jobs.

Last year, Kenya overtook Lesotho to become the biggest exporter of goods to the US under Agoa raising $33.5 million and helping create over 40,000 jobs.

This will be achieved by among others establishing industrial parks near power generating plants to reduce the cost of production. Already, land has been identified in Olkaria to set up a garment making factory. Kenya has also cut by half power tariffs to the export processing zones to encourage more production and increase competitiveness of export products.

Businessmen hope the deal which expires in 14 months will be extended to allow the achievements of some of the dreams they have. “Everybody said yes, it is going to be extended,” said industrialist Jaswinder Bedi who was part of the delegation to the US summit.

It emerged yesterday that some US Congress members wanted to change the trade agreement but the Kenyan delegation maintained the deal was working for the continent as it is. Kenya National Chamber of Commerce and Industry Chairman Kiprono Kittony said most US companies in the delegation wanted to deal with Africa on a larger region.