AGOA dilemma – Kenya may look for other clothing markets

18 May '11

2 min read

In the event of the US Government not extending African Growth and Opportunity Act (AGOA) provisions beyond September 2012, Kenya will be seeking an alternative market for its apparel sector.

This was disclosed by Dr. Richard Mutule Kilonzo, the newly appointed CEO of the Export Processing Zones Authority (EPZA).

Currently, there is a provision allowing lesser-developed AGOA countries to import textiles from outside the AGOA group to make clothing destined for the US. The Kenyan Government is going to lobby for the extension of the provision which is set to expire in September 2012.

Being unsure of extension of the provision from the US side, Kenya is seeking alternatives and is in discussions with Europe, China, Korea and other Far East countries.

African countries are lobbying for extension of special textile provisions to be included in the agenda for the June 2011 AGOA summit to be held in Lusaka, Zambia.

Dr. Kilonzo lamented at Kenya's failure to capitalize on AGOA due to lack of capacity, and competition from other Third World countries. He called for innovations and value addition to Kenyan products in order to exploit opportunities under AGOA.

Explaining the reasons for failure to export more products to the US market, Dr. Kilonzo cited three reasons. First, Kenya has to compete with other AGOA countries to export the same products to the US. Second, the cost of energy in Kenya is very high which affects the cost of production. Lastly, the US has stringent certification requirements on agricultural products, which Kenyan products have failed to meet.

This leaves Kenya with no alternative but to seek out other markets, improve products through innovation and value addition in order to remain competitive in the changing global market.

About the Bill on Special Economic Zones which is awaiting debate in Parliament, Dr. Kilonzo was hopeful that "the process of transforming the EPZs into Special Economic Zones (SEZs) is expected to spur growth of the export sector as it would offer a wide range of alternatives for the market, including the ability to sell in the East African Community."

Fibre2fashion News Desk - India

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