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KAM: Government should incentivise textiles sector
18
Jul '09
As the 8th AGOA Forum approaches, the Kenya association of Manufacturers (KAM) is asking the government to incentivise the country's apparels and textiles sector in order to prevent job losses and capital flight.

KAM's Textiles and Apparels Sector Chairman, Jaswinder Bedi said the Sector which has great potential in Kenya's economy has been on the decline over the years as a result of the high cost of doing business in Kenya.

Kenya's textile sector has been declining over the years from a high of 40 firms in 2003 to only 20 recorded at the end of April this year (2009). Bedi attributed the sector's decline to uncompetitiveness of the sector that had been occassioned by high production costs including cost of electricity. “There is need for the government to improve the business environment by subsidising costs such as electricity.”

Bedi who was speaking during a media briefing on the upcoming 8th AGOA Forum scheduled to take place on 4th-6th August 2009, said the textile sector can contribute greatly to the Government's ambition to create 500,000 jobs annually.

“The textile sector is capable of creating thousands of jobs annually thus making a major contribution to job creation in Kenya,” Bedi said.

Speaking during the briefing KAM Chief Executive, Ms Betty Maina said the AGOA Forum presents a major opportunity for the country because various stakeholders will be able to showcase and even sell their products and services both during the Forum and the exhibition that will run concurrently with the meeting.

AGOA provides duty-free and quota-free treatment for eligible apparel articles made in qualifying sub-Saharan African countries through 2015. Qualifying articles include: apparel made of U.S. yarns and fabrics; apparel made of sub-Saharan African (regional) yarns and fabrics until 2015, subject to a cap; apparel made in a designated lesser-developed country of third-country yarns and fabrics until 2012, subject to a cap; apparel made of yarns and fabrics not produced in commercial quantities in the United States; textile or textile articles originating entirely in one or more lesser-developed beneficiary sub-Saharan African countries; certain cashmere and merino wool sweaters; and eligible hand-loomed, handmade, folklore articles, and ethnic printed fabrics.

Bedi expressed regret that over the years, sub-Saharan countries had not taken advantage of AGOA and currently account for the less than one per cent of the total trade volume.

He noted that the country's sales to the U.S had been declining since a high of US$ 272m in 2003 to an estimated US$180m in 2009 based on the figures for the first four months of 2009 when the country had sales of US$60 million. Bedi noted that this decline was because producers had decreased operations following the end of the multi fibre agreement in 2005 and reduction of buyers targeting kenya as a source.

Ms Maina encouraged Kenyanbusinesses to take advantage of other products that are eligible under AGOA including tea, coffee and horticultural products instead of focusing only on textiles and apparels.

Kenya association of Manufacturers


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