In order to help African countries achieve better growth, the US had initiated the African Growth and Opportunity Act (AGOA), a preferential trade arrangement, under which exports to the US, from a few African countries attract zero tariff.
However, as the end of the term for AGOA, which was enacted in 2000 and is expected to expire in 2015, draws closer, it is apparent that exports of goods, particularly, textiles and clothing to the US have been on a downhill since the last few years.
According to Rajeev Arora, Executive Director of the 18-member country textile trade body, Africa Cotton and Textile Industries Federation (ACTIF), exports from Kenya fell to around US $180 million in 2009 from a height of $272 million in 2006.
He observed that despite the African continent accounting for 12 percent of global demand, 95 percent of the raw cotton was exported and there was a need to develop forward and backward linkages in order to limit yarn and fabric imports.
Arora lamented the fact that since AGOA had a limited and fixed time frame, the sector could not attract long term investment, so it should be of permanent nature so that the industry can develop the middle-stream industries.
He added by saying that if it was permanent, they could also challenge their respective governments to assist in accessing easy capital, improving infrastructure like roads and electricity and in turn reduce cost of doing business.
Fibre2fashion News Desk - India
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