Manufacturers Explore Avenues for Export Growth

KAM, EATIH Sign MOU to Promote Trade and Investment under AGOA

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 (EATIH) to aid in the efforts to promote trade and investment, support policy reform activities and expansion of trading avenues especially under the African Growth and Opportunity Act (AGOA).

The signing of the MOU strengthens KAM’s commitment in seizing the opportunity to realize better business opportunities beyond borders. KAM Chief Executive Officer, Ms. Phyllis Wakiaga stated that, “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 competitiveness of various agricultural value chains.”

Following this signing. KAM will be organizing and hosting trade delegations, policy and investment promotion activities that will attract investment in the mutual priority sectors that is, textile and garment, leather and leather products, agro processing, horticulture, ICT and cotton.

Our 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,” added Ms. Wakiaga.

According to EATIH Chief of Party, Mr. 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,” added 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).

“Signing of this MOU reiterates KAM’s Commitment to ensure that our role in the implementation of AGOA is not eroded, and that we maintain and expand our mandated role in industry towards realization of AGOA maximum utilization for the next 10 years,” added Ms. Wakiaga.