Expand AGOA benefits beyond textile, President Uhuru Kenyatta urges

President Uhuru Kenyatta has called for upgrading of trade with United States to ensure diversified products in the export portfolio under the African Growth and Opportunity Act (AGOA).

He directed Industrialisation Cabinet Secretary Adan Mohamed to help local entrepreneurs angle for a bigger share of the American export market beyond just textiles to diversify exports.

“I need you to meet with the women entrepreneurs to open channels for more exports under the renewed African Growth and Opportunity Act (AGOA),” Kenyatta told the CS yesterday, during a luncheon attended by about 200 women entrepreneurs ahead of the historic visit by US President Barack Obama.

“This time around we have to take full advantage of this huge market because we have tremendous opportunity,” he added.

Ten days ago, the US Congress renewed the 15-year old Agoa, which grants duty free access imports sourced from the countries in Africa.

Mohamed said another summit would be organised in the coming weeks to educate the women business leaders on the available opportunities under trade arrangement, including the new products that could be exported and the requirements.

He told the forum that Kenyan products must be competitive in price and quality to access the markets, as there were other countries eyeing the same buyers.

Kenya is currently exporting less than 10 products to the US market, out of the 6,400, which have been listed under the trade promotion laws. Most of Kenya’s exports are textiles produced in the Export Processing Zones (EPZs). The ten-year extension was long enough to provide thousands of Kenyan entrepreneurs, specifically the women, gain sufficient market access in the US.

The Head of State held an interactive session with the women, taking questions about bottlenecks to their involvement in commerce. Limited access to Government procurement and expensive cost of finance were top among the problems that the business leaders presented in the forum held at the Kenyatta International Convention Centre.

Commercial banks

He said the Treasury was working on regulations that would push commercial banks to accept Local Purchase Orders (LPOs) as sufficient collateral to extend credit to suppliers. Until now, commercial banks hardly provide LPO financing, in an arrangement where the bidder get funds to finance the bid while the buyer makes payment directly to the lender.

The bidder gets to access the funds after the bank has taken off its portion of the amount received. It was, however, not possible for the State to force commercial banks to cut interest rates charged on loans because it was a liberalised economy and sector, said Kenyatta.

The meeting was among a series of similar forums leading up to the Global Entrepreneurship Summit to be graced by Obama in three weeks time.

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