Kenya Pivots to Turkey for Textile Investment Amidst AGOA Doubts

Nairobi, Kenya – As the future of the African Growth and Opportunity Act (AGOA) remains uncertain, Kenya is proactively seeking to diversify its export markets by attracting Turkish textile and garment manufacturers. The East African nation is making a strong case for Turkish investment, highlighting its existing preferential access to the European Union (EU) market through the Economic Partnership Agreement (EPA). This strategic shift aims to bolster Kenya's manufacturing sector and safeguard thousands of jobs in the apparel industry.

Investments Principal Secretary Abubakar Hassan, speaking on the sidelines of the fifth Turkiye-Africa Business and Economic Forum in Istanbul between Wednesday, October 16, and Thursday, October 17, 2025, emphasised Kenya's desire for Turkish companies to produce locally. "We need to think ahead and diversify, and we know that Turkey is good in textiles and garments, focusing on the European market with which we enjoy an Economic Partnership Agreement and enjoy duty-free access," Hassan stated.

Historical and Political Context

The African Growth and Opportunity Act (AGOA), enacted by the U.S. Congress in May 2000, has been a cornerstone of trade relations between the United States and eligible sub-Saharan African countries, providing duty-free access for over 6,000 products to the U.S. market. Kenya has been a significant beneficiary, particularly in its textile and apparel sector, with apparel shipments forming the bulk of its exports to the American market.

However, the program, initially set to expire in September 2025, has faced increasing uncertainty. While President William Ruto announced a one-year extension of AGOA in early October 2025, ensuring continued duty-free access until September 2026, this is viewed as a temporary reprieve. The potential non-renewal or changes to AGOA have raised concerns about the competitiveness of Kenyan goods, which could face tariffs of up to 28 percent in the U.S. market, impacting jobs and investments.

Kenya's trade relationship with Turkey has been developing, with bilateral trade reaching US$145 million in 2013. In 2023, Kenya's exports to Turkey were valued at $23.7 million (approximately KSh 3.06 billion), primarily tropical fruits, while imports from Turkey stood at $272 million (approximately KSh 35.15 billion), mainly nitrogenous fertiliser. Both countries have expressed interest in improving investment and trade opportunities, with discussions on a bilateral trade agreement and a double taxation avoidance agreement.

Laws, Policy, and Governance

Kenya ratified the Economic Partnership Agreement (EPA) with the European Union on April 24, 2024, which entered into force on July 1, 2024. This agreement grants Kenyan products duty-free and quota-free access to the EU market. This access is a key incentive Kenya is offering Turkish investors. The government is also implementing initiatives like the National Export Strategy and the Route to Market Strategy to support businesses in transitioning to high-value exports and diversifying trade relationships.

Furthermore, Kenya operates several Export Processing Zones (EPZs) across the country, managed by the Export Processing Zones Authority (EPZA). Businesses within these zones benefit from incentives such as tax holidays, duty-free import of machinery and raw materials, and exemption from VAT on inputs, aiming to promote export-oriented industrialisation and attract investments.

Stakeholders and Testimonies

The textile and apparel industry is a significant employer in Kenya. In 2024, Export Processing Zones (EPZs) employed 90,698 people, with the garment industry accounting for a substantial portion. The uncertainty surrounding AGOA's renewal has led to concerns about job losses. Some analyses suggest that over 150,000 Kenyan livelihoods, including workers and their dependents, are linked to AGOA's market access. Companies like United Aryan garment factory in Nairobi, which produces millions of jeans for U.S. retailers, rely heavily on AGOA's duty-free benefits to remain competitive.

The Kenya National Chamber of Commerce & Industry (KNCCI) has actively collaborated with the Turkish Embassy and the Turkiye Exporters Assembly to host delegations and promote trade and investment between the two nations.

Evidence and Data

Risks and Implications

The potential expiry of AGOA without a long-term replacement or a bilateral trade deal with the U.S. could significantly impact Kenya's export sector. Analysts warn that without a permanent arrangement, Kenya risks losing competitiveness, as its goods would face higher import duties in the U.S., making them less attractive compared to products from countries like Vietnam or Bangladesh.

This uncertainty has already led to reduced orders from U.S. buyers and could result in factory closures and job losses in Kenya's Export Processing Zones. The United Nations Conference on Trade and Development (UNCTAD) projects that Kenya's average weighted trade tariff with the U.S. could nearly triple to 28 percent upon AGOA's expiry.

Unknowns and Controversies

While President Ruto confirmed a one-year AGOA extension, the long-term future of the trade pact remains a subject of debate and political maneuvering in the U.S. The stance of the current U.S. administration on multilateral trade agreements, coupled with the imposition of a 10 percent tariff on imports from some African nations, including Kenya, has added to the uncertainty.

There are ongoing discussions about negotiating a Strategic Trade and Investment Partnership (STIP) between the U.S. and Kenya, which could serve as a long-term framework beyond AGOA. However, the specifics and timeline for such an agreement are not yet clear.

Timeline and Next Steps

• October 16-17, 2025: Fifth Turkiye-Africa Business and Economic Forum in Istanbul, where Kenya actively wooed Turkish investors.
• Early October 2025: President William Ruto announced a one-year extension of AGOA until September 2026.
• By End of 2025: Kenya expects to finalise a bilateral trade agreement with the United States.
• September 2026: Current expiry date for the one-year AGOA extension.

What to Watch

The coming months will be crucial in observing the progress of Kenya's efforts to attract Turkish investment in its textile sector and the outcomes of ongoing discussions regarding a long-term trade framework with the United States. The effectiveness of Kenya's strategy to leverage its EU EPA access to diversify its export markets will be a key indicator of its economic resilience.

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Kenya's pursuit of diversified trade partners and enhanced manufacturing capacity aligns with its broader economic development goals, including increasing the manufacturing sector's contribution to GDP and creating jobs. The focus on value addition in exports, as outlined in the Kenya AfCFTA implementation strategy (2022-2027), also underscores the nation's commitment to strengthening its position in regional and global trade.