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Elimination of MFA, major reason for factory closures

04
Nov '08

Thousands of Kenyans have lost their jobs over the past few years after the closure of textile industries in the country following the elimination of the Multi-Fibre Agreement (MFA) by the World Trade Organisation.

According to the Global Apparels' Managing Director Mr. C.S Narain, out of 50 apparels companies that were operating locally, 28 were forced to close down. Currently, he said, only about 12 companies are operating maximally out of the remaining 22 that did not shut down.

“It is unfortunate that employment within the industry has reduced from half a million employees to a mere 10,000 – 12,000 due to the decision to eliminate MFA's in January, 2005.” Narain Said.

Narain made the remarks on Wednesday, 30th October, when Kenya Association of Manufacturers (KAM) hosted members of the Apparels sector to a luncheon with the United States International Trade Commission (USITC) trade analysts at the Laico Regency hotel.

The meeting was held with the aim of giving the analysts an opportunity to learn more about the various challenges that inhibit Kenya from taking better advantage of AGOA.

Narain further urged the Government to support the apparels industry. “The Government must be concerned about the survival of the apparels industry; it must have dialogue with the exporters and get to know their problems and possible solutions” he said.

He said, the government should put into place a mechanism whereby the companies dealing in exports will not be affected by the strengthening of foreign currency.

Speaking during the luncheon, Coffee Board of Kenya Managing Director Ms. Lois Njeru noted that America has emerged as a strong export market for Kenyan coffee within the last few years receiving exports amounting to approximately 16-20 percent in volume.

She noted that the fact that most coffee offered in the market is a blend is a major constraint to market access which hinders consumers from consuming original coffee.

African Cotton & Textile Industries Federation (ACTIF) Managing Director, Barry Fisher emphasized on the need to look for innovative ways to trading in Africa.

FEDEX-EACL's sales and marketing manager Mr. David Ngigi, cited restrictions in terms of amount of paper work when shipping and more than one day clearing goods from customs as some of the challenges experienced when exporting to the US markets. “There is need of clear terms and policies in terms of what is acceptable in certain markets in the US to facilitate trade.”

A US International Trade Commission Analyst Alan Treat stated that the US is willing to foster a good relationship with Kenya in terms of trade. “That is why we are enhancing our efforts to get to know the challenges being faced by manufacturers in Kenya in relation to their competitive position.”

George Aldridge of the United States Embassy noted that the US is working with the Kenyan government to ensure that Kenyan airports attain category one status which is international. He said the US Government has been working diligently to get the American Airline back to Kenya.

The luncheon was organized as a follow-up meeting to the recent visit to Kenya by United States Trade Director for Africa, Patrick Dean Coleman on 25th September 2008.

Kenya Association of Manufacturers

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