Kenya: Government Targets Year-End U.S. Trade Deal; Pushes for AGOA Extension

Strategic Overview

Kenya has confirmed that it is working to finalize a bilateral trade agreement with the United States by the end of 2025 while simultaneously lobbying for a five-year extension of the African Growth and Opportunity Act (AGOA). This dual approach is framed as critical for safeguarding existing export markets and positioning the country as a competitive investment hub in East Africa.

Policy Reset and Economic Stakes

• Bilateral Track: Nairobi seeks a framework agreement with Washington that will cover market access, investment protections, and priority export clusters such as textiles, apparel, and agriculture.
• AGOA Extension: The current AGOA authorization is set to expire in 2025. Kenya is pressing for an extension until 2030, emphasizing that predictability on tariff-free access underpins jobs in its export processing zones and strengthens FX inflows.

Implications for Export Sectors

1. Textiles & Apparel

• Over 70% of Kenyan apparel exports go to the U.S. under AGOA preferences.
• A policy gap would risk mass layoffs in industrial parks across Nairobi, Athi River, and Mombasa.

2. Agriculture & Floriculture

• Kenya is a major exporter of cut flowers, fruits, and vegetables.
• A loss of preferential access would expose exporters to stiff competition from Latin America.

3. Investment Climate

• Certainty on market access will help attract fresh FDI into export-led manufacturing and agro-processing.
• Investors are cautious about U.S. policy volatility and see a dual-track approach (bilateral + AGOA) as a hedge.

Political and Diplomatic Dimensions

• Kenya’s Leverage: As East Africa’s largest economy and a regional security partner, Kenya has positioned itself as a reliable interlocutor for Washington.
• U.S. Calculus: A new trade agreement serves both economic and strategic interests, reinforcing Washington’s footprint at a time of intensifying competition with China in Africa.
• Regional Ripple Effects: A successful Kenya–U.S. framework could set precedent for similar bilateral pacts with other AGOA beneficiaries, reshaping trade dynamics across Africa.

Risks and Outlook

• Risk of Delay: U.S. domestic politics could slow ratification or dilute the scope of AGOA renewal.
• Negotiation Fatigue: Without progress, exporters face uncertainty on investment timelines and expansion plans.
• Outlook: Nairobi’s twin-track lobbying is pragmatic. The outcome of these negotiations will be decisive for East Africa’s export resilience over the next five years.

Kenya is racing to lock in market certainty before AGOA lapses. For both Nairobi and Washington, the ability to conclude a deal by year-end will signal whether Africa–U.S. trade policy can evolve beyond temporary preferences into a structured, long-term framework.

Kenya, being a regional hub for trade, logistics, and investment flows in East Africa, represents more than a single-country case study. Its stability and predictability directly shape regional value chains, aviation hubs, and cross-border supply networks. African Security Analysis (ASA) could provide tailored support, from scenario-based trade risk assessments to investor advisory and route intelligence, ensuring that stakeholders operating in and through Kenya can anticipate shocks, adapt strategies, and capitalize on the dual-track trade regime as it evolves.