December 17, 2017

Government Eyes AGOA Product Expansion to grow Women Businesses

AGOA

By Etaarifa Contributor

Kenya will diversify its export profile to the United States of America to help women entrepreneurs access the American market following the 10-year Africa Growth Opportunity Act (AGOA) renewal.

According to Industrialization Cabinet Secretary, Adan Mohamed, Kenya is keen to benefit beyond the textiles market and will prioritize on products it has comparative advantages in producing.

“Kenya exports less than 10 of the 6,300 products allowed into the U.S. market. The minimal non-oil AGOA trade gains for the last decade provide an opportunity to exploit the pact further for the benefit of our entrepreneurs,” said Mohamed.

He said Kenya is targeting Ksh.100 Billion (USD1 Billion) in export earnings in the next two years and Ksh. 1 Trillion (USD 10 Billion) by the time the renewal expires.

He was speaking at the African Women Empowerment Program (AWEP) Summit organized to educate women business leaders on the available opportunities through AGOA, including the new products that could be exported and the requirements.

The Cabinet Secretary said the government is committed to making policy amendments including reducing the cost of doing business, mitigation of non-tariff barriers and development of value chains, a key to seizing the particular opportunities.

He added that Kenya will push for value addition of its products to deliver greater financial returns and support economic growth more strongly. “In the immediate term, we would like to focus on the products we produce in abundance like skins and hides to produce shoes for the U.S. market under quota-free and tax-free access to the multi-billion dollar footwear market.”

Kenya has had plans to process skins and hides into finished leather which would yield four times the value added potential yielding Ksh.15 Billion (USD 150 million) to Ksh.20 Billion (USD 200 million) in Gross Domestic Product and 35,000 jobs.”

Mohamed said Kenya will work with the U.S. to see the U.S. development targeting AGOA-related constraints, including infrastructure development, trade logistics and value chain development to promote production capacities, diversification and greater program utilization.

Singling out high transport costs to the U.S., he reiterated the on-going bilateral negotiations for air freight transportation via direct flights into the U.S. as a development that will eliminate barriers to trade between Africa and the U.S.

Kenya’s bilateral trade with the United States increased fivefold between 2000 and 2010, from Ksh. 17 Billion ($163 million) to Ksh. 87 Billion ($875 million).

During this period, more than 90 percent of the exports from Kenya to the U.S. benefited from AGOA and the Generalized System of Preferences with the bulk of Kenya’s exports under AGOA in the textile and apparel sector.

Mohamed said opening up the US market through AGOA is part of Government efforts to ensure prosperity of women run enterprises through access to global markets.

“Women–owned businesses are now making a noteworthy contribution to Kenyan economy – accounting for about one –half (48 percent) of all micro, small and medium-sized enterprises (MSMEs), which contribute to up to 20 percent of Kenya’s GDP,” said Mohamed.

Statistics show that out of an average of 600,000 jobs created annually in Kenya since 2000, over 400,000 jobs have come from the informal sector where 85 percent of women’s businesses are found.

Further, he lauded the U.S. government for facilitating private sector-to-private sector engagement adding, “The robust Kenyan private sector offers the best source of inclusive and broad-based economic growth as they aggressively seek out opportunities for trade, investment, and partnership.”

The forum came on the heels of the recent concluded Global Entrepreneurship Summit (GES) and President Obama’s visit to Kenya in which both Kenya and the U.S. committed to empower women entrepreneurs.

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