State moots plan to improve Agoa rules

Kenya is reviewing terms under the Africa Growth and Opportunities Act. This could see new policy changes in the 10-year old pact with America.

The latest data indicate that Kenyan exports to the US have remained stagnant over the past three years, with exports to the US under the pact having plummeted by more than 50 per cent.

“We have only seven years left on Agoa and since it began, we have taken advantage of less than 10 tariff lines,” said Trade Principal Secretary Chris Kiptoo.

“Our exports to the US are about seven per cent of our total trade volume and 65 per cent of them are in apparel.”

Trade

Signed by former US President Bill Clinton in May 2000 as a 15-year trade pact, Agoa was extended to 2025 by former President Barack Obama during the 2015 Global Entrepreneurship Summit.

The deal allows exporters in Africa and several other developing countries duty-free access to the US market.

The latest figures of trade between Kenya and the US under Agoa indicate a slump in volumes over the past three years.

The volume of Kenyan goods imported by the US through Agoa in 2015 stood at Sh57 billion in 2015 before falling to Sh55 billion in 2016 before settling back to Sh57 billion last year.

Kenyan imports from the US, on the other hand, have dropped from Sh92 billion in 2015 to Sh37 billion in 2016 before rising marginally to Sh42 billion last year.

The biggest drop has been attributed to a sharp decline in Kenyan imports of US transport equipment, which fell by more than 80 per cent from Sh66 billion in 2015 to Sh16 billion last year.

The Government now says it has drawn up a new strategy to allow Kenyan exporters to move more products under Agoa and narrow the trade deficit.

“This is a very large market with more than 6,200 tariff lines and in this new structure we are looking at addressing the technical barriers we are facing such as meeting sanitary and quality standards,” said Dr Kiptoo.