NAIROBI, Kenya, Aug 13 – The proposed extension of the African Growth and Opportunity Act (AGOA) to December 2028 will give Kenyan manufacturers greater certainty to plan production, Investment, Trade and Industry Cabinet Secretary Lee Kinyanjui has said.
According to Kinyanjui, the extension will enable Kenyan manufacturers retain US orders and make fresh investment decisions after years of uncertainty over the future of the preferential trade program.
Kinyanjui said the longer horizon would provide manufacturers with the predictability needed to sustain and expand production.
“The extension will be a highly significant development for Kenya’s economy, as well as the eligible countries in Sub-Saharan Africa, in providing predictability for our manufacturers,” Kinyanjui said.
“The provision for the continuation of the third-country fabric provision protects our booming apparel sector.”
The US Senate has approved the extension of the US trade preference programme, which provides eligible Sub-Saharan African countries with duty-free access to the American market. The measure is now expected to go through the remaining legislative process before taking effect.
The certainty is particularly important for Kenya’s apparel industry, which accounts for about 70 percent of the country’s exports to the US.
Apparel exports under AGOA rose to Sh60.6 billion in 2024 from Sh50.8 billion in 2023, while the sector supports more than 66,000 direct jobs, according to data cited by the Ministry.
For manufacturers, the extension removes, at least temporarily, the risk of US tariffs disrupting pricing and orders.
It also provides a clearer investment horizon for factories operating in Export Processing Zones, where decisions on machinery, capacity expansion, labour and supply contracts depend heavily on expected market access.
The third-country fabric provision is especially significant for Kenya because it allows manufacturers to source yarns and fabrics from non-AGOA countries, process them locally and still export qualifying finished garments to the US duty-free.
AGOA was enacted by the United States in 2000 and has been a major pillar of Kenya’s export relationship with the US. However, its future has repeatedly been uncertain.
The previous authorisation expired on September 30, 2025, leaving exporters facing uncertainty over the tariff treatment of goods entering the US market.
That uncertainty has underscored the importance of a predictable policy environment for manufacturers, particularly those whose competitiveness depends on relatively low production costs and preferential access to major consumer markets.
The latest extension also provides for retroactive refunds of eligible duties paid by exporters during the gap following the previous expiry, according to Kinyanjui.
Beyond apparel, Kenya uses AGOA to support exports including cut flowers, tea, coffee and macadamia nuts.
The government is now urging manufacturers to use the additional certainty to increase production capacity and diversify exports across the more than 6,000 eligible product lines.
