Kenya’s textile industry, a cornerstone of the nation’s economy, faces a turbulent future as shifts in U.S. trade policies threaten to disrupt its export-driven apparel sector, which has long relied on favorable agreements to maintain a competitive edge. Economist Moses Muchiri Mwangi from the Institute of Economic Affairs has raised alarms about the potential fallout from these changes, particularly for a sector that employs thousands and contributes significantly to national revenue. The apparel industry has thrived under duty-free access to the U.S. market, but with new tariffs and uncertainties looming, the stability of this vital economic pillar is at risk. As global trade dynamics evolve, the challenges ahead could reshape not just the textile trade but also the broader economic landscape in Kenya. This pressing situation demands a closer look at the specific policies in question and their potential to alter market access, investor confidence, and job security within the country.
Navigating New Trade Barriers
The introduction of a 10% tariff on Kenyan exports to the U.S., combined with the impending expiration of the African Growth and Opportunity Act (AGOA) later this year, poses a severe threat to the textile industry’s competitiveness. AGOA has been a lifeline, granting duty-free access to the American market and enabling Kenya to build a robust apparel export sector over the years. Without its renewal, Kenyan goods could face steep duties, making them less attractive compared to products from other global competitors with more efficient production systems. This shift could deter foreign investment, as uncertainty discourages capital inflow into the sector. Beyond textiles, the ripple effects might slow activity at key economic hubs like Mombasa port, reduce demand for related imports such as machinery, and ultimately lead to job losses. The broader implications highlight a critical need for Kenya to diversify its export base and seek alternative markets to cushion against these disruptions and safeguard economic stability.
