Anxiety in Kenya’s Textile Industry as AGOA Fate Hangs in the Balance

Anxiety in Kenya’s Textile Industry as AGOA Fate Hangs in the Balance

Every morning, Mary Wanjiru wakes up early and heads to her place of work at a garment factory in Nairobi. This has been her daily routine for the past nine years, having learned embroidery and garment making at a local technical training college. Wanjiru is one among thousands of workers who got a lifeline after the U.S. government entered into a partnership with sub-Saharan African nations through the Africa Growth and Opportunity Act (AGOA). But now, their future in the textile industry is no longer assured.

With AGOA set to expire on September 30, 2015, the single mother of two boys may soon have to find an alternative source of livelihood. With life in the sprawling Kitengela informal settlements already difficult, Wanjiru does not know what will become of her if she loses her source of income.

This bleak outlook is shared by the hundreds of investors in the Export Processing Zones (EPZs). With the deadline fast approaching, the possibility of a non-extension is raising anxiety among stakeholders.

Lobbying has already begun in earnest. According to Jas Bedi, the chairman of the African Cotton and Textile Industries Federation (ACTIF), industry players are confident the extension will be forthcoming following U.S. President Barack Obama’s encouraging comments during his recent African tour. ACTIF is the umbrella body for the cotton textile industry in Africa.

The organization has already appointed a lobbyist in Washington, D.C.

“I will also be traveling to Washington, D.C., in October to meet various Congress committees to lobby for extension,” Bedi said.

Stakeholders in the textile industry hope to persuade the U.S. government to extend the AGOA arrangement for a minimum 15 years.

Apart from workers and investors, cotton farmers also stand to lose their livelihoods if AGOA is not renewed. The government, of course, stands to lose revenue as well. The impact of increased joblessness will be likely to worsen the already bad security situation.

“Our jobs are never secure. Without AGOA, things will only get worse,” said Irene Muthoni, who works on-and-off for Nairobi’s Apex Apparels.

Wanjiru agrees: “If the EPZs close shop, my future and that of my sons is doomed.”

During a recent visit to Cape Town, U.S. President Obama expressed optimism that Congress will approve AGOA’s extension.  The AGOA agreement — created to initially cover eight years from October 2000 to September 2008 — was signed into law by former U.S. president Bill Clinton in 2000. In July 2004, amendments were made to the law and signed by former U.S. president George W. Bush. The agreement was extended to September 2015 under the amended law. Now, a total of 39 African countries benefit from the initiative.

The purpose of AGOA is to expand U.S. trade and investment in sub-Saharan Africa so as to stimulate economic growth. The agreement also seeks to integrate sub-Saharan Africa into the global economy. Under the law, all marketable goods and services from AGOA-eligible countries would enter the American market duty-free and quota-free. The U.S. Congress was to approve the agreement based on the president’s annual report. The report would be aimed at determining whether a particular sub-Saharan country was eligible for AGOA benefits.