Over 32, 000 Kenyans working in Kenya-base US textile factories will maintain their jobs after all. This follows US Congress’ vote for a three-year extension of the African Growth and Opportunity Act on Thursday 2nd 2012. The AGOA preferential trade programme which was established in May 2000, was meant to end on September 30 2012 but will now stretch up to 2015.
Manufacturers in the textile industry had predicted that the programme’s expiry was bound to cause shrinkage of some factories to as much as a fifth of their current sizes, while others would completely shut down.
The AGOA programme allows for duty-free import of clothing produced in eligible countries in Sub-Saharan African with yarn and fabric imported from countries like China and India. In Kenya, this apparel provision has created a transformational effect in creating more than more than 32, 000 jobs for Kenyans. It has also enabled African manufacturers to get the freedom to purchase fabric from outside the continent to sew garments for export to the U.S. market.
The extension also renders the newly independent Southern Sudan eligible, and thus prospecting Kenyan investors in the textile industry stand to benefit as well.