By Luke Anami
Kenya will be seeking an alternative market for its apparel products should the US
Government fail to extend African Growth and Opportunity Act (AGOA) provisions next year, the newly appointed CEO at the Export Processing Zones Authority (EPZA), Dr Richard Mutule Kilonzo, has said.
The present provision that allows lesser-developed AGOA countries to import textiles from outside the AGOA group to make clothing destined for the US is set to expire in September next year.
"Even though we are going to lobby to have the provisions extended, we must also be seeking for alternatives," Dr Kilonzo said yesterday when he was introduced to investors in the zones for the first time since he was appointed to replace former acting CEO, Joseph Kosure.
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"We are in discussions with Europe, China, Korea and other Far East countries to see how much quota they can offer should the US government fail to extend AGOA come 2012."
African governments are expected to include an extension of special textile provisions is expected to be included in the agenda of the next AGOA summit, scheduled for this year in June, Lusaka-Zambia.
Speaking for the first time since assuming office, Dr Kilonzo said Kenya had not capitalized on AGOA due to lack of capacity, and to competition from other Third World countries.
"We are competing with other African countries to export the same products. This calls for innovations and value addition to what we already have in order to exploit opportunities under AGOA," Dr Kilonzo explained.
"We have also failed to export more products to the US market because our cost of energy is very high and therefore affects our cost of production. Further the US has stringent sanitary requirements on Agriculture products, which we have failed to meet."
All this means that Kenya has no alternative but to seek out other markets, improve products through innovation and value addition is it is to remain competitive in the changing global market.
Kilonzo said the Bill on Special Economic Zones is ready and awaiting debate in Parliament.
"The process of transforming the EPZs into Special Economic Zones (SEZs) is expected to spur growth of the export sector as it is expected to offer a wide range of alternatives for the market, including the ability to sell in the East African Community," Dr Kilonzo said.
Meanwhile, EPZA chairman Mathenge Wanderi said Kenya, along with other third world countries, have started lobbying the US government for the extension of the AGOA agreement.
"We are lobbying for the extension of AGOA as well as planning the introduction of SEZs to leverage on what we have already achieved through AGOA," Wanderi said at the EPZ HQs in Athi River.
He insisted that US lawmakers needed to understand the significant contributions made by the AGOA, which expires in 2015.