Japhet Ruto, a journalist at TUKO.co.ke, has over eight years of expertise in finance, business, and technology journalism in Kenya and globally.

Ahead of the African Growth and Opportunity Act (AGOA) expiration in September, companies authorised to export clothing and apparel to the US under a tax and quota-free trade agreement created 8,802 jobs last year due to increased demand.

AGOA-accredited companies employed 66,804 people in 2024, up 15.18% from 58,002 employees the previous year, according to the Kenya National Bureau (KNBS) of Statistics' 2025 Economic Survey.

According to KNBS data, the 40 clothing and apparel companies that operate in the Athi River-based Export Processing Zones (EPZ) under the AGOA framework increased capital investments by 21.1% to KSh 38.27 billion last year.

Export revenue increased 19.20% to KSh 60.57 billion due to increased investment, the largest increase since 2018, when textile sales increased 25.80% to around KSh 41.58 billion.

However, the AGOA-approved companies' performance improved during a year when trade pact renewal uncertainty began to grow.

Initiated during the Bill Clinton administration in 2000, the AGOA Treaty aimed to wean sub-Saharan Africa off foreign donations and integrate it into the global economy.

It was originally set to last for 15 years, but in June 2015, it was extended for an additional 10 years.

The US Congress, which is controlled by protectionist President Donald Trump's Republican Party, must approve the extension of the accord.

Beneficiaries of the tax and quota-free AGOA pact are concerned about its renewal when it expires in September due to Trump's insistence on a reciprocal tariff strategy in trade negotiations.

Geopolitical economist Aly-Khan Satchu opined that due to Trump's America first policy, the deal was unlikely to be extended.

"I see a zero chance of AGOA being renewed. However, a 10% tariff would, in my opinion, mean 66,000 jobs would survive; above that, then all bets are off," Satchu told TUKO.co.ke.

Elsewhere, Trump declared that the OECD global tax treaty had "no force or effect" in the United States and announced that his government had withdrawn from it.

The move might affect tax revenue by US multinational corporations in Kenya and other nations, as well as endanger international tax cooperation.

Incorporated into Kenya's Tax Laws (Amendment) Act 2024, the pact aimed to impose a minimum 15% tax rate on multinational corporations with billions of dollars in income, such as Google, X, Amazon, Microsoft, and Meta (Facebook).

Source: TUKO.co.ke