African textile and garment industry foresees a positive outcome of the 10-year renewal of the African Growth and Opportunity Act. This 10-year renewal of the African Growth and Opportunity Act (AGOA) – under the United States’ General System of Preferences that allows duty-free imports of a wide range of African products, is expected to increase the exports of textile and garment products to the US from the country.
The renewal of the act is projected to give strong impetus to African textile and garment industry, and has also prompted many Turkish, Indian and Chinese textile companies to set up units in African countries, particularly Ethiopia and Kenya, to not only flee the rising production and labour costs at home but also avail the duty-free exports under AGOA.
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Some of the textile companies that are eager to take advantage of the rising demand in the US for their textile and apparel products are establishing multiple textile plants. Mombasa Apparel, an AGOA-supported company, launched its fourth textile factory in November last year on the coast of Kenya while Taiwan’s New Wide Garment, which already has eight factories in Kenya, Lesotho and Ethiopia, plans to further expand its African operations.
Kenya has emerged as Africa’s largest apparel exporter, followed by Lesotho, Mauritius and Ethiopia. Ethiopia offers cost advantages, Kenya boasts higher production efficiency. Nairobi-based J.C. Mazingue, Trade Advisor and Contractor, USAid said, “AGOA would provide African shippers duty-free access to 8,000 products in the US market, including almost all the textile and apparel products.”
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According to the Nairobi-based East African Trade and Investment Hub (EATIH), textiles and apparel account for some 90 per cent of exports from sub-Sahara African countries to the United States.
