Thousands of jobs at risk in Africa
Nairobi: Workers and industry are bracing for the end of a longstanding US trade agreement that gave African exporters preferential treatment and now leaves businesses vulnerable to new competitive pressures and tariffs.
The African Growth and Opportunity Act (AGOA) will terminate as scheduled on Tuesday amid uncertainty over renegotiations and the looming impact of new tariffs announced by the White House in April. AGOA is a multilateral trade agreement that has given thousands of products from qualifying African nations duty-free access to US markets since 2000.
A key example of the deal’s impact can be found in Kenya, where it has allowed the country’s textile and apparel sector — makers of jeans, for instance — to effectively compete with Asian exporters such as in Bangladesh and Vietnam.
“If AGOA goes away we have zero chance to compete with the Asian countries,” said Pankaj Bedi, owner of United Aryan, an apparel manufacturer in Nairobi that exports Levi’s and Wrangler jeans to the US. Textile and apparel exports from Kenya to the US have grown from around USD 50 million when AGOA was first introduced to around USD500 million today.
“I will be asking (Trump) for the US to consider seriously renewing and extending AGOA for at least a minimum of five years,” Kenyan president William Ruto said last week at the UN General Assembly in New York. “It is a platform that connects Africa and the US in a very fundamental way.”
AGOA had also given African countries hope that major elements of their export economies would be exempt from blanket tariffs of 10 per cent — and in some cases much higher — announced by the US earlier this year.
Kenya is already paying 10 per cent on non-AGOA exports, which are not many. Kenyan manufacturers will struggle to compete with rivals in Asia, even though some Asian countries may face a higher US tariff, because of the limited domestic supply chain in Kenya where most of the raw materials are imported, as well as higher energy costs, lending rates, and operating expenses.agencies
