By Constance Adaurie
Africa is set to play a critical role in the global economy over the next 50 years as its population expands, particularly with the extension of the African Growth and Opportunity Act (AGOA), according to James Mbugua, Editor of The Nairobi Law Monthly.
Mbugua said the AGOA extension would further bolster businesses across the continent, positioning Africa to capitalise on its demographic growth in the coming decades.
WhenAGOA expired in September last year, it disrupted trade across Kenya and other African markets before its renewal to run through 2028.
Mbugua said the renewal includes a retrospective refund option for importers who paid duties during the lapse period, further calming concerns among import-dependent businesses.
AGOA was signed into US law in 2000 under President Bill Clinton to support sub-Saharan African economies through preferential trade terms with the United States.
Kenya’s clothing and textile sector — the largest beneficiary of AGOA on the continent — stands to gain the most from the extension. The industry employs hundreds of thousands of Kenyans across factories, warehouses and offices, producing jeans, uniforms and fashion accessories for export to the US market, Mbugua noted.
Citing Kenya’s Business Daily, Mbugua said the country’s export earnings jumped sharply after news of the extension, with domestic exports hitting a record monthly high of 10.5 billion Kenyan shillings.
He described the surge as an opportunity for Kenya to diversify its export base beyond traditional commodities like tea and flowers, noting that textile exports are largely value-added finished goods — a shift from the raw-material exports that have historically limited earnings for African economies.
Referencing African Business, Mbugua said the continent currently accounts for only 6 percent of China’s annual imports, underscoring the importance of alternative markets like the US.
American manufacturers are also benefiting, he said, pointing to textile firm SanMar, which reportedly cut its reliance on Chinese sourcing from 46 percent to 6 percent by shifting to African suppliers.
Mbugua added that Africa is positioned to play a growing role in the global economy, citing All Africa data indicating that 12 of the world’s 20 fastest-growing economies are on the continent. Trade arrangements such as AGOA, he said, will be central to sustaining that growth.
