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US to help Africa meet export quality

By Moses Michira | August 27th 2015
By Moses Michira | August 27th 2015

Kenya's plans to grow exports to the US have received an expertise boost following a pledge by a senior American government official.

US Assistant Secretary of State for African Affairs Linda Thomas-Greenfield has said her government is seeking to help African manufacturers improve the quality of their products. This, she said, will ensure they meet the required standards for the American market and help the continent tap into the recently renewed trade agreement.

Goods manufactured in African countries, including Kenya, fell short of the required export quality and were therefore unable to benefit from the African Growth Opportunity Act (Agoa).

"We are working with those countries through our trade hubs and through consultations with American companies and trade ministers to try to increase the productivity of companies exporting to the US," Ms Thomas-Greenfield said.

She said the US wants to look beyond the 10-year extension granted in May, when African manufacturers are projected to have a more mature trading relationship with America.

There are concerns that African countries would not utilise the tax-free market access in the US owing to poor production, with most of the trade so far being in commodities.

She adds that her country was working with the various manufacturers to "show them how to provide quality products for the United States and it's a long term process and not something that's going to happen overnight but I think companies get it and certainly the Agoa eligible countries get it".

High volatility in commodity prices however could minimise any meaningful gains accruing to Africa, making a case for trade in manufactured goods.

Kenya is among the few African economies that do not depend on commodities and has been touted to be among those that can take advantage of Agoa to grow trade with the US, and is hoping that new investments in sectors like leather processing could enhance its competitiveness.

Kenya also plans to promote Special Economic Zones as a path to industrialisation and analysts say its strategy may produce tangible results. The Government is also "targeting labour-intensive, low-technology industries such as textiles and leather to take advantage of the newly extended Agoa initiative".

Industrialisation Cabinet Secretary Adan Mohamed has said Kenya was preparing to export shoes and other leather products to the multibillion-dollar footwear market in the US. Availability of skins and hides locally would enable Kenyan enterprises to manufacture leather shoes for the US, he said last week.

"We have sufficient supply of leather here that would enable us compete with China on footwear," Mr Mohamed said. Exports in footwear would help more than double the current trade volume to the US, estimated at Sh40 billion and consisting of cotton apparels including jeans and towels manufactured within the Export Processing Zones.

Mohamed projects that the renewal of the Agoa window would allow apparel exports to the US to hit Sh100 billion by 2018, two-and-a-half times more.

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