Kenya: Textile export earnings rose 31.1% in 2021

Kenya's textile and apparel industry has experienced a significant growth in earnings, with a rise of 8 billion Kenyan shillings in the nine months leading up to September last year. The surge in revenue can be attributed to increased sales to key markets such as the United States and the Netherlands. A recent strategy aimed at promoting locally designed and manufactured apparel, textiles, leather, and accessories has also played a crucial role in driving the sector's growth. Pankaj Bedi, the Textile and Apparel Zone Sector Chair at the Kenyan Association of Manufacturers, shared insights on the industry's progress. Bedi highlighted the sector's resilience in the face of challenges and emphasized the importance of creating a conducive environment for local manufacturers to thrive. He noted that the industry has fully recovered from the impact of the pandemic and is currently employing around 50,000 individuals, with plans to expand further. The key theme that emerged from the conversation was the industry's potential for growth and job creation, both domestically and through export markets. Bedi underscored the significance of initiatives like the 'Buy Kenya, Build Kenya' campaign in stimulating local demand for products. He also addressed the challenges posed by the importation of second-hand clothing, a practice that undermines local manufacturers' competitiveness in pricing. While the United States remains a major market for Kenya's textile exports, accounting for approximately 95% of the sector's exports, Bedi emphasized the need to diversify and tap into opportunities presented by the Africa Continental Free Trade Area agreement. The African Growth and Opportunity Act (AGOA), which has been crucial for Kenya's textile exports to the US, is set to expire in 2025. Discussions are currently underway to extend AGOA for another 15 years, with stakeholders advocating for its continuation to foster sustained growth and job creation within the industry. Bedi highlighted the sector's potential by comparing its current export figures of $500 million to the global fashion sector's size of $1.8 trillion, signaling significant room for expansion. The Africa Continental Free Trade Area agreement presents opportunities for integrating the full value chain across the region, leveraging the unique strengths of different countries to create a more robust market and enhance local production capabilities. However, challenges persist, particularly regarding rules of origin and the need for a more seamless and effective implementation of the agreement. Bedi urged for a more progressive approach that prioritizes industry growth and job creation while addressing key issues such as rules of origin in a pragmatic manner. The interview also touched on the impact of the COVID-19 pandemic on global supply chains and the importance of building a resilient and competitive ecosystem within the textile industry. Bedi emphasized the need for a gradual transition towards local production while acknowledging the sector's reliance on imported materials in the short term. As countries within the African Continental Free Trade Area continue to navigate the complexities of trade agreements, the textile industry in Kenya stands at a critical juncture, poised for growth but also facing pivotal decisions that will shape its future. By fostering collaboration, innovation, and a conducive policy environment, Kenya's textile industry can chart a path towards sustainable growth, job creation, and enhanced competitiveness in the global market.