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Textile manufacturers seek early extension of AGOA IV
20 Sep '11
2 min read
Textile manufacturers in Kenya have sought an early extension of the third-country fabric provision under the Africa Growth and Opportunities Act (AGOA) IV, which is currently authorized only until September 30, 2012.
AGOA offers tangible incentives for African countries to continue their efforts to open their economies and build free markets. AGOA IV requires the African countries to source raw materials like cotton lint and yarn from within or from other developing countries.
With the end of AGOA IV provision, Kenya would be required to source its raw materials domestically. Hence, it is urging an extension for another three years to increase its cotton production to meet the demand of the local cotton industry.
Kenyan textile manufacturers want the extension to be declared early to avoid cancellation of orders. It is because the buyers from the US usually place their orders up to three quarters in advance.
In the event of non-renewal of third country provision before the end of 2011, the manufacturers fear a significant drop in orders. Moreover, it would negatively impact the livelihood of millions of Africans.
Currently, Kenya's textile firms rely on raw materials on developing countries like Bangladesh, India, Malaysia and China. This has denied the important backward linkage with cotton cultivators, according to experts.
Cotton production in Kenya has not improved dramatically in spite of various initiatives taken by the Government in recent years, including giving higher price to producers and establishment of the Cotton Development Authority.
The textile sector is the fourth largest in Kenya and employs nearly two-thirds of workers in the export processing zones.
AGOA offers tangible incentives for African countries to continue their efforts to open their economies and build free markets. AGOA IV requires the African countries to source raw materials like cotton lint and yarn from within or from other developing countries.
With the end of AGOA IV provision, Kenya would be required to source its raw materials domestically. Hence, it is urging an extension for another three years to increase its cotton production to meet the demand of the local cotton industry.
Kenyan textile manufacturers want the extension to be declared early to avoid cancellation of orders. It is because the buyers from the US usually place their orders up to three quarters in advance.
In the event of non-renewal of third country provision before the end of 2011, the manufacturers fear a significant drop in orders. Moreover, it would negatively impact the livelihood of millions of Africans.
Currently, Kenya's textile firms rely on raw materials on developing countries like Bangladesh, India, Malaysia and China. This has denied the important backward linkage with cotton cultivators, according to experts.
Cotton production in Kenya has not improved dramatically in spite of various initiatives taken by the Government in recent years, including giving higher price to producers and establishment of the Cotton Development Authority.
The textile sector is the fourth largest in Kenya and employs nearly two-thirds of workers in the export processing zones.
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