AGOA Renewal, Kenya’s Trade Lifeline: Past, Present and Future

Stability for Investors

The renewal restores confidence for lenders, manufacturers and investors who froze or scaled down commitments amid tariff uncertainty after the AGOA lapse. Before the renewal bill, exporters were already paying full U.S. duties of 15–42 % plus a 10 % reciprocal tariff, eroding competitiveness. An extension would remove or reduce those burdens temporarily.

Tariff Pressures

Even with AGOA, the landscape had become harder after the U.S. introduced broader tariffs that affected African exports, including Kenya’s — a factor that made renewal urgent.

Trade Diversification

Kenya, recognizing that AGOA alone isn’t sufficient long-term, is seeking a bilateral trade deal with the U.S. to cement market access and diversify beyond preferential schemes. Talks have been ongoing and were highlighted during high-level engagements.

Opportunity for New Products

The government is looking to expand Kenya’s U.S. export basket beyond textiles — including coffee, tea, macadamia nuts, horticultural products and services, aligning with its broader export diversification strategy. The three-year extension gives Kenya short-term stability, but exporters and policymakers are pushing for longer-term arrangements or a formal Kenya–U.S. free trade agreement (FTA) that would replace AGOA and provide security beyond preferential access.

Kenya is also leveraging the African Continental Free Trade Area (AfCFTA) to build resilience and reduce over-dependence on any one market. Diversified regional exports could cushion against future AGOA uncertainties. There’s a big push to expand the value chain in apparel and other goods, including local cotton production and yarn-to-fabric manufacturing, to capture more of the value added before exporting.

Even with AGOA, Kenya must improve ease of doing business, energy reliability, logistics and production quality to compete with lower-cost rivals from Asia and elsewhere. Lee Kinyanjui, Investments, Trade and Industry CS mentioned that “The uncertainty that had previously engulfed the sector will now give way to renewed confidence and expansion. We aim to grow exports of additional products under the AGOA framework beyond textiles, ensuring that Kenya fully leverages this opportunity to create jobs and generate wealth.”

Carole Kariuki, KEPSA CEO claimed that AGOA has been the single most effective U.S. policy tool in Africa over the last 25 years where it has supported industries, created jobs, and transformed lives. She noted that in 2024, Kenya exported $470 million worth of apparel to the U.S., supporting tens of thousands of jobs, a reminder of why the extension is vital for sustained growth.

AGOA fuelled decades of textile, apparel and other export growth, jobs and investment in the past years. The renewal has restored duty-free access, stabilising thousands of jobs and boosting investor confidence. Kenya aims to diversify its export base, negotiate deeper trade agreements with the U.S., and strengthen regional and global market linkages, with AGOA’s extension as a stepping stone toward sustainable economic growth.