January 22, 2026
The United States House of Representatives recently passed a bill extending the African Growth and Opportunity Act (AGOA) for three more years, offering Kenya a critical lifeline to bolster its exports to the lucrative American market. This development, announced on January 13, 2026, comes after months of uncertainty following AGOA’s expiry on September 30, 2025, during which Kenyan exporters faced tariffs as high as 42 percent on goods like apparel and textiles. The extension not only safeguards over 330,000 jobs in Kenya’s export processing zones (EPZs) but also paves the way for Nairobi to aggressively pursue a bigger slice of the US import pie, estimated at billions in potential revenue.
Background on AGOA’s Role in Kenya-US Trade
AGOA, enacted in 2000, has been a cornerstone of preferential trade between the US and sub-Saharan African nations, allowing duty-free access for over 1,800 products, including textiles, apparel, coffee, tea, and horticultural goods. For Kenya, the program fueled a robust export industry, with shipments to the US reaching $737 million (about Sh95 billion) in 2024, dominated by $470 million in apparel alone. Over the past five years, Kenyan firms dispatched 518.3 million pieces of textiles and apparel under AGOA, growing the number of participating companies from 28 in 2020 to 40 in 2024.
The program’s lapse last September triggered immediate challenges, as exporters grappled with reinstated duties ranging from 15 to 42 percent, eroding competitiveness against rivals like Bangladesh and Vietnam. This uncertainty hit EPZs hard, where companies employing tens of thousands faced potential shutdowns amid the Trump administration’s protectionist tariffs, including a baseline 10 percent on all partners announced in April 2025. Kenyan business lobbies, such as the Kenya Private Sector Alliance (KEPSA) and the American Chamber of Commerce in Kenya, mounted intense campaigns, dispatching delegations to Washington to advocate for renewal.
Key Provisions of the Extension Bill
The newly passed House bill extends AGOA until at least 2029, providing a three-year bridge to negotiate longer-term arrangements like a bilateral free trade agreement (FTA). A standout feature is the provision for refunds on duties paid by exporters since October 1, 2025, post-expiry period, retroactively easing financial strains on firms that continued shipping despite the tariffs. This measure, combined with restored duty-free status, is projected to revive shipments that dipped sharply in late 2025.
Investments, Trade and Industry Cabinet Secretary Lee Kinyanjui hailed the move in a January 14 statement, noting it dispels sector-wide uncertainty and restores confidence for expansion. He emphasized that Kenya now has a window to diversify beyond textiles, incorporating high-potential products like coffee, tea, macadamia nuts, horticulture, wood, plastics, and even services such as tourism. This aligns with President William Ruto’s December 2025 Washington visit, where the US signaled support for extensions amid ongoing Strategic Trade and Investment Partnership (STIP) talks.
Economic Impact and Job Preservation
The extension arrives at a pivotal moment for Kenya’s economy, which saw US exports to Kenya surge 60 percent to $771 million in 2024, underscoring mutual benefits. For exporters, it prevents a projected tripling of weighted tariffs, as warned by the UN Conference on Trade and Development (UNCTAD), preserving an industry that generated Sh60.5 billion in exports last year. EPZ workers, particularly in apparel hubs like Athi River and Nairobi, stand to benefit most, with over 330,000 direct and indirect jobs secured.
Beyond immediate relief, the bill supports Kenya’s export diversification drive, shifting from reliance on preferential access to value addition and new markets, reducing vulnerability to global shocks. The government aims to leverage AGOA’s short-term stability to negotiate an FTA, potentially covering advanced sectors and ensuring predictability past 2029.