Kenya is eyeing more forays in Africa and the European Union to find an alternative market to the US, amid fears that President Donald Trump’s radical trade policies will hit exporters servicing the American market.
The Ministry of Industry, Trade, and Investment (MITI) said it is exploring the EU, where Kenya already has an active Economic Partnership Agreement (EPA), to absorb exports that will lose the US market, terming Trump’s tariffs as an opportunity for a reset.
Kenya signed the trade agreement with the EU in December 2023, and the deal came into force in July 2024.
The agreement gave Kenya free access to the EU, a $20 billion (Sh2.6 trillion) economy, with no restrictions on taxes on Kenyan exports and no limits on the quantity of exports.
“The EPA framework gives access to 27 EU member states and 400 million consumers. The potential to grow our exports from $500 million (Sh64.89 billion) to $1 billion (Sh129.79 billion) in the next two years is ours to actualise,” said Trade Cabinet Secretary (CS) Lee Kinyanjui.
The CS spoke on Tuesday as he launched a policy on boosting Kenya’s cotton, textile and apparel sector, a move that comes just a week after a 10 percent US tariff on Kenyan goods came into effect.
The US market in particular has been the backbone of the textile and apparel sector, taking up Sh68 billion worth of products from Kenya last year alone.
The products gained duty-free access to the US market on the back of the African Growth and Opportunity Act (Agoa), which expires in September.
At least 41 textile factories are currently operating in the export processing zones in Kenya and exporting products to the US under Agoa, the ministry says.
The 10 percent tariff on Kenyan exports is expected to reduce the competitiveness of Kenyan exports to the US as prices are expected to rise at the consumer level, competing with US companies that will not be affected by the tariff.
Industry players have been lobbying for the removal of the tariffs on goods exported under Agoa, but indications from the government are that this may not be possible.
“We knew there has always been a problem but the time to sort it was difficult but now an opportunity has presented itself where we are being told that access to some of these markets cannot be there,” CS Kinyanjui said.
The CS also said Kenya is exploring the African market for the export of textiles and other products through the African Continental Free Trade Area (AfCFTA).
The AfCFTA covers 55 nations and targets to bring together more than 1.3 billion people in a $3.4 trillion (Sh440.74 trillion) economic bloc.
Industry Principal Secretary (PS) Juma Mukhwana said Kenya wants to trade with Africa by sourcing raw materials for the manufacture of textile products from the West African region, where exports of the raw materials are high.
“Kenya is doing very well on the value addition side, but we are using raw materials from another continent, but we have raw materials within the continent in West Africa. How do we use that to grow our competitiveness to add value to what we are doing,” PS Mukhwana said.
He said the lack of capacity to produce finished products in West Africa and Kenya’s lack of enough raw materials to feed its textile factories created room for collaboration within the continent rather than trade with countries outside Africa.
