9 August 2013

Kenya: Exporters Lobby for a Long-Term AGOA Deal

Photo: AllAfrica
Cotton from Burkina Faso used to make textiles. Some countries hold the right to export many products, including textiles, under the quota-free and duty-free provisions of AGOA.

African exporters want the African Growth and Opportunity Act trade deal to be a long term to be project as opposed to the current status where it has to be reviewed after every three years three years before renewal.

The Export Processing Zones Authority CEO, Cyrille Nabutola said the three year cycle makes it difficult to plan and make evalutations on capital investments.

He said the supply chains and exports are often destabilised every time the act nears renewal.

AGOA is a US initiative lowering tariffs for African exports to its market. It began in 2000 with the last renewal done in 2012 to run up to 2015.

In 2012, Kenya exported $380 million( Sh32.3 billion) worth of goods under AGOA. In the Export Processing Zones, where 25,000 people are employed, exports contributed $262 million (Sh22.2 billion)

"My view is the moment you talk to people about terms such as two or three years, it puts a strain on the people who plan," Nabutola said in an interview.

"Planning is supposed to be longterm, when you talk about short term measures like that people do not invest in huge capital investment and then expect the return in three years," he said ahead of the AGOA forum to will be held in Addis Ababa, Ethiopia between today and August 13.

"You ought to talk to them about long sustainable period of time, 10,15 or even a longer term,"

African players will be giving their suggestion to the US negotiators during the forum.

"We shall be discussing about he possibilities of renewing the AGOA programme for the long term. of curse we will have to answer questions on whether we lived up to the expectations," Nabutola said.

The AGOA bill's extension is being debated in the US congress this week with high confidence that it will pass.

it would be hard for many African products to compete in American markets without preferential consideration.

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