Bonface Kanyamwaya, a journalist at TUKO.co.ke, has more than 10 years of financial, economic, business, markets, and aviation expertise, providing insights into Kenya and global trends.

The government of Kenya has inched closer to signing a deal that will renew the African Growth and Opportunity Act (AGOA) trade agreement with the United States.

A top source familiar with the details told that Kenya and the US have agreed on the resumption of the bilateral Free Trade Area (FTA), which signals the renewal of the deal.

"Kenya and the US have agreed on the resumption of the bilateral Free Trade Area (FTA), which is more like the extension of AGOA or a new and more enhanced framework. The talks will begin immediately," a close source to Prime Cabinet Secretary Musalia Mudavadi, who is familiar with the details, told in confidence on Tuesday, May 20.

With the current AGOA deal set to expire in September 2025, there have been fears that a majority of workers in Kenya, especially those in the apparel business, will lose jobs.

Data from the 2025 Economic Survey by the Kenya National Bureau of Statistics shows that in 2024, AGOA-accredited companies employed 66,804 workers, up from 58,002, representing a 15.18% increase.

According to KNBS data, the 40 clothing and apparel companies whose operations are domiciled in Athi River-based Export Processing Zones (EPZ) under AGOA also saw their capital investment go up to KSh 38 billion, representing an increase of 21.1%.

With plans in place to renew the deal, workers who have direct rights to export their goods into the US can now breathe easy.

There have been concerns from manufacturers in Kenya that if the deal is not renewed, firms that have been built with millions of dollars in investments will be forced to shut down.

This means that thousands of workers, many of whom are women who are the backbone of Kenya's textile industry, will lose employment opportunities.

The AGOA deal was only meant to bring on board qualifying countries in Sub-Saharan Africa by allowing duty-free exports on a long list of products.

Experts on trade matters wait with bated breath to see what the signing of the new pact or the extension of AGOA would mean for African countries following the reciprocal tariff that was imposed on Wednesday, April 2, by President Trump’s administration.

In other news, President Trump on Thursday, April 10 temporarily stopped tariffs imposed on Kenya and over 70 other countries after global markets plummeted.

On the other hand, Trump raised China’s tariffs to 25%, saying that the Asian nation showed disrespect to other countries.

Trump's move to pause tariffs came days after American billionaire Elon Musk urged him to soften his stance on the new trade policy, which was also hitting Musk hard.

Source: TUKO.co.ke