State Department for Investment Promotion Leads Dialogue on Textile Sector Amid U.S. Tariffs and AGOA Uncertainty

April 8, 2025, NSSF Building, Nairobi
The Principal Secretary for Investment Promotion, Abubakar Hassan Abubakar, convened a consultative meeting today with key stakeholders in Kenya's textile and apparel sector including representatives from the Export Processing Zones Authority (EPZA), Gatsby Africa and the Kenya Association of Manufacturers (KAM).
The primary focus of the meeting was to address pressing challenges facing the industry, particularly: Impact of Newly Imposed U.S. Tariffs: The recent implementation of a universal 10% tariff by the United States on all imports, effective April 5, 2025, has raised concerns about its potential impact on Kenya’s competitiveness in the U.S. market, a significant destination for the country's apparel exports. 
Impending Expiration of the African Growth and Opportunity Act (AGOA): With AGOA set to expire on September 30, 2025, stakeholders deliberated on strategies to advocate for its extension, emphasizing the importance of continued duty-free access to the U.S. market for sustaining the sector's growth. 

Kenya's textile and apparel industry is a vital contributor to the national economy. The EPZ program hosts over 100 companies, providing direct employment to more than 66,000 individuals. The sector has experienced notable growth, with apparel exports reaching approximately Ksh.51 billion, positioning Kenya as the largest exporter of garments under AGOA. 
In response to these challenges, the Kenyan government is actively seeking to diversify its trade partnerships. Negotiations are underway for enhanced market access within regional blocs such as the African Continental Free Trade Area (AfCFTA), the East African Community (EAC), and the Common Market for Eastern and Southern Africa (COMESA). These efforts aim to reduce reliance on traditional markets and bolster the resilience of Kenya's textile and apparel industry.
Additionally, the meeting highlighted recent investments aimed at strengthening the sector. Notably, the International Finance Corporation (IFC) has partnered with Kenya's Royal Apparel EPZ Limited, providing a $15 million loan to support the expansion of a new factory near Nairobi, projected to create approximately 3,700 jobs. 
The consultative meeting underscored the collective commitment of the government and industry stakeholders to navigate the current challenges facing Kenya's textile and apparel sector. Through strategic partnerships, advocacy for favorable trade policies, and investment in capacity building, the sector aims to sustain its growth trajectory and further solidify its position in the global market.