Ten years ago this month, US President Clinton signed into law the Africa Growth and Opportunity Act. The purpose of the Act was to help Africa overcome poverty by increasing trade with the US. The Act provided African textile and apparel manufacturers with duty-free access to the US market under certain conditions, and for the first five years of the AGOA there were some promising results, with Kenyan clothing exports to the US growing from $30 million on 2000 to $258 million in 2005.
However, African clothing manufacturers cannot compete with the economies of scale enjoyed by Asian clothing manufacturers. Local clothing markets are severely weakened by second-hand clothing and cheap Chinese imports which are dumped on the market, driving down prices to an unprofitable level. Further, Africa’s weak infrastructure contributes to the high cost and lengthy delays in shipping goods to the US.
By 2009, Kenya’s clothing exports to the US had shrunk to $195 million and the number of people employed in the apparel sector had dropped from 32,000 to 12,000. More than 90% of all duty-free trade from Africa to the US under the AGOA is now in oil and petroleum products, with the majority of that coming from Nigeria, Angola and Congo. Oil exports tend to be less beneficial to the exporting country’s economy than manufacturing exports.