The African Growth and Opportunity Act (AGOA) is set to expire in September 2025. The potential end of this trade agreement raises pressing questions about the stability of thousands of jobs, the future of key export sectors, and the future of key export sectors, and the country’s wider economic resilience. In a recent interview hosted by CNBC Africa , our Executive Director Edgar Odari, unpacked the potential outcomes of this pivotal moment. Read on to learn more.
Uncertain Prospects for Renewal
Edgar Odari expressed skepticism about the likelihood of AGOA’s renewal, citing both the elapsed renewal timeline and shifting trade priorities in Washington. He pointed out that the United States, particularly under the Trump administration, has leaned toward reciprocal trade agreements, the kind that demand concessions from both sides, rather than continuing with unilateral preferences like the African Growth and Opportunity Act (AGOA).
“It seems unlikely that AGOA will be renewed,” he remarked, highlighting how this shift signals a potential turning point in US–Kenya trade dynamics, where access to the American market may increasingly hinge on negotiation and compromise rather than preferential generosity.
The Stakes for Kenya’s Economy
The expiration of AGOA is poised to deliver a severe blow to several pillars of Kenya’s economy. Odari points to agriculture, textiles, and manufacturing as the most exposed, warning that the fallout could be immediate and far-reaching.
The textile and apparel sector, one of Kenya’s biggest AGOA success stories, illustrates the stakes. Over the past two decades, preferential access to the US market has enabled the growth of export processing zones, attracted foreign investment, and created tens of thousands of jobs. Today, according to the Kenya National Bureau of Statistics, around 66,000 direct jobs are tied to AGOA exports in textiles alone. But the true scale of vulnerability extends far beyond these direct jobs. Entire value chains, from cotton farmers to transporters, suppliers, and small businesses, rely on the industry. Factoring in indirect employment, the potential impact runs into hundreds of thousands of livelihoods.
The agriculture sector faces similar risks, particularly in horticulture and cut flowers, which have gained competitive footing in the US market under AGOA. Removal of preferential treatment could reduce market access, driving up costs for Kenyan exporters while lowering their ability to compete with other global suppliers. For manufacturing, the expiry threatens to stifle momentum just as Kenya has begun carving a foothold in niche processed goods and light industries. Rising tariffs and uncertainty around market access could deter investment, stall expansion, and weaken Kenya’s ambition to industrialize.
Finding Opportunity in AfCFTA
Kenya cannot afford to wait passively as AGOA’s expiry looms. Odari stresses that this moment, while disruptive, also presents a chance to rethink trade strategy and embrace new opportunities. Central to this is the African Continental Free Trade Area (AfCFTA).
“Exploiting intra-African trade can help cushion the blow,” he explained, highlighting Kenya’s comparative strengths in the continental market. With AfCFTA lowering barriers to trade across Africa, Kenya has the opportunity to expand its export footprint, diversify partners, and reduce its overdependence on the US market.
In the short term, Odari notes that the government should explore interim export measures with the US, such as extensions under a generalized scheme of preferences (GSP), even though such arrangements have previously expired. These stopgap measures could help soften the immediate shock while Kenya positions its exporters for new markets. A particular focus, he argues, should be on textiles and clothing, sectors that have sharpened their competitiveness under AGOA. By redirecting these products into African markets, as well as Europe and Asia, Kenya can leverage existing expertise and infrastructure.
Looking at the long term, Odari emphasizes the importance of diversification and skills enhancement. The AGOA experience has exposed the risks of relying on unilateral agreements that are subject to the political mood of foreign capitals. Instead, Kenya and other African countries should work toward a continent-wide agreement with the US, providing more stability than piecemeal preferences. Such a shift would move Africa from being a passive recipient of concessions to an active negotiator of trade relationships, strengthening resilience and securing the continent’s economic future.
Lessons From South Africa: Not too long ago, South Africa’s automotive industry faced major disruptions when access to the US market became uncertain. Instead of crumbling, the sector pivoted quickly — diversifying export destinations, strengthening supply chains, and negotiating new trade agreements. This resilience helped safeguard jobs and turned a looming crisis into an opportunity for growth.
For Kenya, the takeaway is clear: as AGOA winds down, adaptability and diversification are essential. By learning from South Africa’s experience, Kenya can reorient its textiles, agriculture, and manufacturing sectors toward new regional and global markets while reducing dependence on a single trade partner.
The expiration of AGOA presents a critical juncture for Kenya’s economic future, requiring strategic pivots and enhanced regional cooperation to safeguard the nation’s economic interests.
‘Indeed, opportunities are plentiful for Kenyan businesses as AGOA exits,’ Odari concludes, accentuating the potential for innovation and adaptation in this transitional period.
Watch the full interview here: https://lnkd.in/d8eFN-vf. For any inquiries about the interview, feel free to contact Edgar Odari via LinkedIn.