African countries jittery over renewal of AGOA as deadline fast approaches

The renewal of the African Growth and Opportunity Act (AGOA) is causing jitters among African countries as the deadline fast approaches. With AGOA set to expire in September 2025, there is growing concern among American buyers and manufacturers about the uncertainty surrounding its extension. The delay in renewing AGOA threatens to undo the progress made in shifting production away from strategic adversaries, as there are currently no viable alternatives for mass-market, price-sensitive product categories. The Kenya Association of Manufacturers CEO, Tobias Alando, highlighted the significance of AGOA for the country, particularly the manufacturing sector. AGOA has been crucial in terms of employment, directly employing about 58,000 people and indirectly supporting another 150,000 jobs. The monetary value of exports through AGOA amounts to at least $600,000 annually. The potential impact of not renewing AGOA could result in a loss of hundreds of thousands of jobs and a significant blow to revenue generation for the government. Alando emphasized the lack of viable alternatives in case AGOA is not renewed. The only current agreement that supports duty-free exports is the Economic Partnership Agreement with the European Union (EUEPA), which grants access to about 300 million people in the European market. However, there is no direct replacement for AGOA in terms of supporting specific sectors like the textile and apparel industry, which heavily relies on AGOA for employment, particularly for women. As countries like South Africa and Ethiopia are exploring alternative trade agreements in anticipation of AGOA's expiration, Kenya's longstanding relationship with the US makes it crucial to secure AGOA's renewal. Alando stressed the need for diplomatic engagement with the US government to ensure the continuation of AGOA or to consider alternative trade agreements to prevent job losses and revenue decline. The discussions between Kenya and the US for a new trade agreement are at an advanced stage, with the importance of market access for both countries highlighted. Kenya's strategic position in the region not only influences trade dynamics but also plays a significant role in regional security. Alando underlined the importance of maintaining duty-free access to the US market and exploring other trade agreements under the EU EPA and the African Continental Free Trade Area (AfCFTA) if AGOA is not renewed. If given the opportunity to address the president, Alando would prioritize the protection of jobs and revenue generated from exports under AGOA. He would urge the president to extend the program or seek alternative market access within the continent to prevent further job losses and secure the future of the manufacturing sector.