NAIROBI, Kenya, Apr 28 – The Kenya Association of Manufacturers(KAM) has today signed a Memorandum of Understanding (MOU) with the U.S. Agency for International Development (USAID)- funded East Africa Trade And Investment Hub (the Hub) to aid in the efforts of promoting trade and investment, support policy reform activities and expansion of trading avenues especially under the African Growth and Opportunity Act (AGOA).
Following this agreement, KAM will be organizing and hosting trade delegations, policy and investment promotion activities that will attract investment. The agreement brings mutual interest in the areas of textile and garment, leather and leather products, agro-processing, horticulture, ICT and cotton.
“AGOA offers great opportunities for our local businesses especially the SMEs. It is essential that we build their capacity to enable them leverage this partnership to realize financial sustainability for their businesses. Beyond this we are also looking to diversify our exports through this partnership and increase the competitiveness of various agricultural value chains,” said Phyllis Wakiaga, KAM Chief Executive Officer.
Wakiaga said the country must work towards expanding the range of products that are currently being exported to US market under AGOA.
“We must go beyond the apparel export and strategize ways that we can explore the gains of approximately 6400 products that are currently eligible for AGOA.”
According to the Hub’s Chief of Party, Juan Estrada-Valle, this agreement comes at an opportune moment, following President Obama’s signing of the Preferences Bill in September to law thereby extending AGOA to 2025.
“African economic operators must now work towards addressing the underlying challenges that have prevented them in the last 15 years from seizing the opportunity to realize better business with the United States of America,” said Mr. Estrada-Valle.
Over the years, AGOA has accorded duty-free access for eligible products to the largest single market in the world. It has also provided Kenya with a significant competitive advantage over non-AGOA countries that must pay normal tariff rates to enter the United States. This is particularly true with respect to products that have high U.S. tariff rates in many instances, such as apparel, footwear and agricultural products.
The program will promote export diversification in AGOA countries through its provision of duty-free and quota-free benefits to virtually all products. As a result, Kenya has expanded regional integration, production-sharing as well as job creation and its economic growth. Kenya has benefited from AGOA through textiles, spices, coffee, tea, fruits and nuts exports. The textile and apparel industry has reaped significant benefits through AGOA and contributes 85 per cent of the jobs created in the export processing zones (EPZ).