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Agoa facility earns exporters Sh20 billion

By | July 21st 2009 at 00:00:00 GMT +0300

By Luke Anami

Kenya’s exports to the US through the African Growth Opportunity Act (Agoa) facility increased to Sh20 billion last year, up from Sh15 billion in 2005, despite the effects of the global financial crisis and the election related chaos, Trade Minister Amos Kimunya has said.

Cut-flowers, apparel and clothing formed the bulk of products exported to the US.

Kimunya, however, says there is need to diversify the exports to deepen penetration.

"Despite the many opportunities available under the Agoa facility, Kenya has been unable to tap into the rich American market due to transactional constraints," Kimunya said.

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"Kenya’s challenge is not only to increase the volume of her exports to the US, but also to diversify the range of exports with more value added components," added Kimunya.

The minister was briefing the media on the forthcoming Agoa forum scheduled to be held in Nairobi early next month.

Kimunya cited the cost of transport and the strict market requirements as some transactional constraints facing Kenyan exporters targeting the US market. Other challenges include inadequate financing for exporters and minimal representation in the US market.

Awareness programmes

Kimunya observed that although trade between the two countries was in favour of the US, there was potential to increase Kenyan exports to the lucrative market through more awareness programmes and other incentives.

"Kenyan products lack strong branding that targets the average American consumer. This affects the country’s effectiveness and market expansion," reckoned Kimunya.

To overcome this barriers, the minister said the Government will help brand Kenyan products destined to the US and European markets.

He asked Kenyans in the Diaspora to help the local exporters identify trade opportunities. "Kenyan industries lack support in terms of incentives to encourage investments for value addition. For example we export a lot of tea in bulk with little value addition and product differentiation," he said.

"Consultations within Government are underway to set up an export development fund like it is in other countries," Kimunya said.

The proposed fund will address the inadequate financing faced by small scale and medium-sized exporters.

African Growth Opportunity Act AGOA exporters export processing zone
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