Thousands of Kenyan jobs and businesses tied to exports to the United States have received a fresh boost after the US Senate approved an extension of the Africa Growth and Opportunities Act (AGOA), keeping eligible Kenyan goods free from US import duties until December 31, 2028.
The extension is expected to give manufacturers and exporters more confidence to plan production and investment, particularly in the apparel industry, which accounts for about 70 per cent of Kenya's exports to the American market.
Trade Cabinet Secretary Lee Kinyanjui said the decision would give manufacturers greater certainty as they plan their operations, while maintaining the third-country fabric provision would remain important to the continued growth of Kenya's garment industry.
The provision allows companies operating in Export Processing Zones (EPZs) to obtain yarn and fabric from countries that are not part of AGOA, use the materials in Kenya and ship the finished garments to the US without paying tariffs.
"This crucial rule allows firms within our Export Processing Zones (EPZs) to competitively source raw materials, such as yarns and fabrics, from non-AGOA countries, add substantial value through local manufacturing, and export the finished garments duty-free," Kinyanjui said.
The Ministry of Investments, Trade and Industry said the new arrangement will also address the uncertainty created after the previous AGOA programme ended on September 30, 2025.
Exporters who paid duties on eligible goods shipped to the US during the period between the expiry of the earlier programme and the enactment of the new Bill will be able to seek refunds.
"Exporters who shipped goods to the US during the gap between the program's previous expiration on September 30, 2025, and the enactment of this bill will not face financial penalties," Kinyanjui said.
The ministry said it will assist exporters with the process of submitting claims to the US Customs and Border Protection (CBP). Eligible duties paid during the gap period will be refunded within the required 90 days.
The government said the continued preferential access will help Kenyan companies maintain their presence in the US, one of the country's major trading partners, while supporting efforts to expand local manufacturing and create employment.
Kenya's garment industry stands out among the sectors that have benefited from AGOA, with the ministry describing the country as the largest beneficiary in the garment sector.
More than 70 per cent of Kenya's textile and apparel exports are destined for the US market, making the continuation of duty-free access important to factories and workers dependent on the trade.
Figures from the 2025 Kenya National Bureau of Statistics Economic Survey show that apparel exports under AGOA climbed to Sh60.6 billion, or about $470 million, in 2024.
The earnings marked a 19 per cent increase from Sh50.8 billion recorded the previous year.
The industry supports more than 66,000 direct jobs in Kenya and generated about Sh60.6 billion in export earnings in 2024.
The ministry said extending AGOA will also help safeguard investments already made in EPZ factories, machinery and skills development by allowing manufacturers to keep operating and generating returns.
The benefits are not limited to clothing manufacturers. Kenyan agricultural goods, including cut flowers, tea, coffee and macadamia nuts, have also benefited from duty-free entry into the US under AGOA.
The government said the extension fits into its plans to help local manufacturers raise production, attract further investment and expand Kenya's export range beyond traditional products.
More than 6,000 product lines are eligible for preferential access under the arrangement, providing businesses with room to explore additional opportunities in the US market.
"The Ministry of Investments, Trade and Industry will continue to actively engage the US Government to secure mutually beneficial bilateral trade and investment terms," Kinyanjui said.
The ministry urged exporters and other private-sector players to use the extended period to expand their businesses, increase output and invest in production.
"We urge the Kenyan private sector to accelerate production, invest boldly, and take full advantage of this preferential market access to the world's largest consumer market," it said.