The clock is ticking on AGOA expiry. Why Kenya must secure its future » Capital News

By Pankaj Bedi

Allow me to take you back to a time when trade was as much about relationships as it was about goods. In Africa, commerce was built on the foundation of barter trade; a system that, while revolutionary for its time, was not without its flaws. Picture a bustling marketplace in 19th-century Kenya, where a fisherman from the Coast exchanged his fresh catch for grains from the hinterlands, while a weaver traded baskets for livestock. These transactions were essential, but they were also limiting. The absence of a standardized currency made trade cumbersome, dependent on the coincidence of wants. Over time, as societies evolved and trade routes expanded, Africa embraced more structured systems of exchange, integrating into regional and eventually global trade networks. 

Fast forward to today, and Africa’s participation in international trade is no longer dictated by exchanges in open-air markets but by formal agreements that define access to global economies. Among these, the African Growth and Opportunity Act (AGOA) stands as one of the most transformative, especially for Kenya. Since its inception in 2000, AGOA has bridged African nations including Kenya; to the vast U.S. market, fostering economic growth, industrialization, and job creation. But now, that bridge is at risk of collapse. With AGOA set to expire in September 2025, the urgency for renewal is undeniable. The question is, will policymakers act in time, or will they allow this critical economic and social artery to collapse? 

The story of AGOA is one of opportunity. As of today, AGOA-driven exports generate approximately $600 million annually. In Kenya, the apparel industry alone employs over 58,000 people directly, with a one-to-one ratio of indirect jobs, and supports an estimated five dependents per worker. This means that approximately 580,000 people depend on apparel exports to the U.S. under AGOA. Beyond apparel, Kenya’s exports of agro-commodities under AGOA also sustain thousands of additional livelihoods across the country. 

These are not just numbers; they represent real families whose livelihoods depend on AGOA. To put this into perspective, a typical employee in an apparels manufacturing factory is likely supporting an entire household, ensuring that children go to school and basic needs are met.  

Kenyan exporters have fought hard to build businesses that thrive under AGOA. Yet, they continue to navigate a volatile global trade environment. Global supply chains remain fragile, and inflation continues to drive up input costs. For Kenyan businesses that have long relied on AGOA preferences to compete in U.S. markets, this unpredictability is more than a passing storm as it is a wake-up call to get a trade deal sooner than later. They have responded with resilience and innovation, but resilience alone cannot safeguard their future if the very foundation of their market access — AGOA — is allowed to lapse. 

It’s critical to note that AGOA aligns with America’s own economic and strategic priorities, making it a core pillar of the “America First” policy. Infact, the United States enjoys a positive balance within the agreement. At a time when the U.S. is seeking to strengthen its global supply chains and reduce dependence on Asia, maintaining strong trade relationships with Africa is in its best interest. The idea of “America First” does not mean America alone; rather, it means ensuring that American consumers and businesses have access to stable, cost-effective, and high-quality products from trusted partners. By keeping AGOA in place, the U.S. ensures that its companies benefit from predictable supply chains, American retailers continue sourcing affordable goods, and jobs within the U.S. remain connected to Africa’s manufacturing success. 

The impact of AGOA on U.S. businesses cannot be overemphasized. Over the past decade, American companies have leveraged AGOA to access raw materials, critical supplies such as petroleum, diversify supply chains, and maintain competitive pricing. For industries such as textiles, agriculture, and automotive manufacturing, AGOA ensures a steady flow of goods that are both competitively priced and ethically produced. Furthermore, the stability that AGOA fosters in Africa reduces economic desperation, which in turn helps curb forced migration and security threats both of which remain high on the U.S. foreign policy agenda. 

But what happens if AGOA is not renewed? The consequences will be catastrophic, not just for Kenya but for the entire U.S.-Africa trade ecosystem. Factories that have been built over two decades with millions of dollars in investment will be forced to shut down. Thousands of workers, many of them women who are the backbone of Kenya’s textile industry, will lose their jobs. The garment industry, which has grown to be Kenya’s largest manufacturing employer, will shrink overnight, sending shockwaves through the economy. The financial impact will extend beyond manufacturing; logistics companies, cotton farmers, and small business suppliers who rely on the AGOA pipeline will suffer devastating losses. 

The ripple effect of AGOA’s expiration will also be felt in the United States. Retailers that have built their supply chains around African textiles and apparel will face sudden price surges, forcing them to either absorb higher costs or pass them on to American consumers. U.S. businesses that rely on African agricultural products, such as tea, coffee, and nuts, will have to seek alternative, more expensive markets. At a time when inflation remains a pressing concern in the U.S., severing AGOA will only push prices higher. Moreover, without AGOA, Africa’s economy; currently valued at approximately $3.4 trillion in GDP; along with other emerging markets such as Europe, the Middle East, and Asia, appear to be viable alternatives. However, the United States remains the primary market for the sector, having been developed over the past 25 years. 

It is crucial for the Kenyan government to intensify its diplomatic efforts, working with other African nations to push for AGOA’s renewal.  Private sector leaders, manufacturers, and exporters need to raise their voices, ensuring that AGOA remains a priority on the global trade agenda. 

Trade has always been about relationships. Just as our ancestors relied on barter to build trust and economic ties, today’s trade agreements must be nurtured and protected. AGOA is not just a trade framework; it is a symbol of economic partnership and a testament to what is possible when nations work together. Let us not wait until the bridge collapses before we realize it’s worth.  

The writer is the Apparels Manufacturers and Exporters (EPZ) Sector Chair and a Board Member of Kenya Association of Manufacturers and can be reached at info@kam.co.ke.