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Last Updated:  Tuesday, 4 March, 2003, 14:43 GMT
Kenya shrinks at US textiles deadline
The future of Kenya's textile industry hangs on whether the US agrees to grant it a longer breathing space to comply with trade laws, exporters have warned.

The Africa Growth and Opportunity Act (Agoa), passed in 2000, opened up tariff-free access to the US market for African textiles.

But it stipulated that, after October 2004, only items made entirely from African raw materials would continue to get duty free access.

Kenyan textile exports have risen since the act was passed, but the industry has a long way to go before it can make clothing entirely from local yarns, according to Jaswinder Bedi, chairman of the Kenya Apparel Exporters' Association (KAEA).

US farmers' fears

Kenya's textile industry currently imports most of its raw materials from Asian countries.

Washington insisted on the October 2004 deadline for fear that Asian firms would use African factories to gain access to US markets and undercut US producers.

But Mr Bedi said: "We're not ready for the switch and the US government is aware of this.

An extension was "very crucial for Kenya", he told BBC radio.

Without one "what we've done so far will actually go to a standstill if the supply chain is not addressed".

Kenya's once-vibrant cotton farming sector collapsed in the 1990s as cotton prices fell worldwide.

The US has pledged more than $300m in aid to Kenyan farmers to help revitalise the industry.

Anti-corruption drive

Mr Bedi said the success of newly-elected President Mwai Kibaki's crackdown on corruption would determine Kenya's ability to attract foreign investment to boost the textile growing, spinning, weaving and finishing sectors.

"We have huge capacity lying there," Mr Bedi said.

"It just needs to be restarted with the right government policy."

"Those are the real issues because investors are really scared to put in 20, 30, 40 million dollars into a plant when with the stroke of a pen it can all go away,"

To qualify for Agoa's exemptions from customs duty and quotas, African states must meet standards for democratic and transparent government.

Kenyan clothing firms produce garments for international brands such as jeans labels Lee and Wrangler, and fashion house Tommy Hilfiger.

Agoa has prompted investors to introduce modern machinery to Kenyan factories and improve quality, said VR Shenoy, deputy managing director of Kenap, which includes Tommy Hilfiger among its customers.

"I'm sure in five years time Kenya will be able to compete globally on the quality front as well," he said.

James Whittington, BBC Africa business editor
"I'm overlooking the factory floor..."

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03 Mar 03 |  Business
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