(5 minutes read)
· Kenyan Small and Medium Enterprises (SMEs) will benefit immensely from the proposed Free Trade Agreement being negotiated between Kenya and the United States, according to the American Chamber of Commerce in Kenya (AMCHAM)
· Maxwell Okello, CEO of AMCHAM said that there would be increased trade opportunities for both export and import, benefiting mainly SMEs from both countries
· Under the deal, Kenya will continue to have quota free access to the US market and would have benefits under African Growth and Opportunities Act (AGOA) to diversity its exports to the US
· The value of Kenya’s exports to the US increased from Sh17.4 billion to Sh51.9 billion, between 2009 and 2019. A major chunk of exports -70%-come from export of horticulture, apparels and textiles
Kenyan Small and Medium Enterprises (SMEs) will benefit immensely from the proposed Free Trade Agreement being negotiated between Kenya and the United States, according to the American Chamber of Commerce in Kenya (AMCHAM). Maxwell Okello, CEO of AMCHAM said that there would be increased trade opportunities for both export and import, benefiting mainly SMEs from both countries.
Some of the Kenyan firms with good supply chain networks can become distributors of the American products, which are known for high quality and innovativeness. Some of the American companies also would be interested in investing in Kenya in such areas where there can be good demand. This also can generate employment and income to the people.
Also hand holding between the American and Kenyan companies can lead to transfer of knowledge, expertise from the US corporations. Also, the American products, technologies and production arrangements could help Kenyan enterprises to move in the value chain.
There are also dissenting voices coming to the surface. East Africa Business Council Chair Nick Nesbitt while supporting the deal urged the government to exercise caution while negotiating with a superpower, which can tilt things to their advantage. Kenya and the US initiated consultations for the landmark agreement early last month and according to reports, talks are progressing. But still both countries have to cover a long distance to clinch a mutually agreeable deal.
Under the deal, Kenya will continue to have quota free access to the US market and would have benefits under African Growth and Opportunities Act (AGOA) to diversify its exports to the US. The value of Kenya’s exports to the US increased from Sh17.4 billion to Sh51.9 billion, between 2009 and 2019. A major chunk of exports -70%-come from export of horticulture, apparels and textiles.
Upon the successful conclusion of the free trade agreement, Kenya will become the second country in Africa to have a free trade agreement with the US, the first being Morocco, which came into being in 2004. World-wide, the US had entered into 14 FTAs. What is significant is that the African Growth and Opportunities Act, popularly known as AGOA, would expire on September 30, 2025. That would force many African countries to go for free trade agreement with the US to gain preferential access.
