NAIROBI, Kenya, Apr 18 – The government is looking to diversify products in Kenya’s export portfolio to the United States under the African Growth and Opportunity Act (AGOA).
Trade Permanent Secretary (PS) Abdulrazaq Adan Ali said the country’s exports to the U.S. remain very narrow, only having exported less than a hundred of the 6,500 eligible products in the AGOA framework, however, he added that the government is in the process of implementing Special Economic Zones (SEZ) to expand the range.
“These Special Economic Zones will allow corporations or enterprises internationally to come forward and produce products that we do not have, for example manufacture of motor vehicles, agricultural equipment and electronics,” he said.
About 55 percent of Kenya’s exports comprise tea, coffee, horticulture, nuts and leather.
Despite exports to the US reaching $400 million annually, the PS said the issue of connectivity to the superpower has hampered further growth in exports from Kenya, which are primarily textiles, as perishable items are unable to last on longer routes.
“If we had a direct flight to the US, our export of flowers and vegetables would really rocket to the U.S., but in the absence of that connectivity we have that challenge because the alternative is to pass through long routes or by ship which takes 28 to 30 days,” he said.
AGOA, which expires in 2015, was signed into law by President Clinton in May 2000 to expand U.S. trade and investment with 37 sub-Saharan African countries, allowing AGOA member countries to export goods to the US duty-free.
AGOA-eligible states have requested the US to extend the agreement and make it open-ended.
“The extension is a request by Africa and we have been informed by the US government that this is receiving positive attention and it is one of the issues to be discussed in the upcoming forum,” Ali said.
The AGOA Forum, a high-level dialogue on trade and investment-related issues to be held in the US this year, will also deliberate the extension of AGOA’s third Fabric provision through 2015.
The provision allows eligible AGOA countries to export apparel products made from textiles duty-free to the US.
In 2010, U.S. imports from sub-Saharan African under AGOA and the related Generalized System of Preferences program totaled $44.3 billion, up 31.4 percent from 2009, and more than five times the amount in 2001.
U.S. Lawmakers have teamed up to introduce legislation in the House of Representatives and Senate meant to expand U.S. exports to Africa by 200 percent over the next ten years.
The U.S. is a major donor to Africa and takes in one-fifth of its imports, but trade in the opposite direction has slipped in recent years with $21 billion worth of U.S. exports to sub-Saharan Africa in 2011.
The bill would require that 25 percent of U.S. trade financing be devoted to Africa, create a new position of US-Africa trade coordinator, and encourage African American businesses to be active on the continent.