US trade deal extension secures thousands of Kenyan manufacturing jobs
Nairobi, 6 September 2026
This crucial US trade extension to 2028 safeguards 6,600 Kenyan textile jobs, restoring vital investor confidence after local export zones previously lost thousands of positions.
A Lifeline for Textile Workers
On 5 September 2026, US President Donald Trump signed H.R. 6500—the Continuing Appropriations and Extensions Act, 2027—into law, extending the African Growth and Opportunity Act (AGOA) through to 31 December 2028 [1][3][4]. This crucial legislative step guarantees continued duty-free market access for Kenyan exports to the United States, bringing immense relief to approximately 6,600 textile workers whose livelihoods were at immediate risk due to trade policy uncertainty [1]. For local businesses, such as Mombasa Apparels, the signing averted imminent plans to downsize staff, restoring stability to a sector that supports more than 66,000 direct jobs across manufacturing, transport, and marketing [1][3].
Overcoming Past Investment Delays
The trade extension comes after a highly volatile period for Kenya’s Export Processing Zones (EPZs). Following the initial expiration of AGOA on 30 September 2025, the US Congress failed to renew the deal on time, leading to a temporary retroactive restoration in February 2026 that was only scheduled to last until December 2026 [1][4]. This short-term window severely dented investor confidence, causing manufacturers to delay critical expansion decisions [1][4]. Consequently, during the previous financial year, Kenya’s EPZs lost 5,337 existing jobs, while an additional 5,000 potential employment opportunities were forfeited due to these investment delays [1][4].
Rebuilding Investor Confidence in the EPZs
A key component of the newly signed extension is the preservation of the ‘third-country fabric provision’ [4]. This rule allows Kenyan garment manufacturers operating in EPZs to source raw materials from countries outside the AGOA bloc while maintaining their duty-free export status to the US market [4]. The retention of this provision is expected to help factories recover from recent pricing pressures; for instance, in 2025, Kenyan factories shipped 148 million garment pieces to the US—representing a volume increase of 27.586 per cent from 116 million pieces in 2024—yet intense market competition saw total export value decline by 4.1 per cent to Ksh58.1 billion [2].
The Scale of US-Kenya Trade Relations
Despite recent margin pressures, the US remains a vital trading partner for Kenya. In 2025, US goods imports from Kenya reached $862.2 million (Ksh111.6 billion), contributing to a total two-way goods trade valued at approximately $1.8 billion (Ksh233 billion) [2]. The sector’s historical resilience is evident in its employment figures: the number of people employed by AGOA-accredited enterprises grew to 82,026 in 2025, a rise of 22.786 per cent from 66,804 in 2024, as the number of active enterprises expanded to 44 [2]. Additionally, apparel exports under the framework had previously grown by 19.291 per cent in 2024 to reach Sh60.6 billion [4].
Strategic Diversification Beyond Apparel
Investments, Trade and Industry Cabinet Secretary Lee Kinyanjui welcomed the decision, noting that the two-year extension provides the immediate certainty required to secure investor commitments [2][3]. However, the Kenyan government plans to treat the period leading up to 31 December 2028 as a structural transition window [1][2]. The state aims to collaborate closely with private-sector groups, such as the Kenya Private Sector Alliance, to diversify Kenya’s export basket beyond apparel into high-value agricultural goods, leather products, pharmaceuticals, and other manufactured items [1][2][3]. Beyond national economic gains, maintaining a stable job market and manufacturing base in Kenya is vital for regional integration, providing critical livelihood opportunities and economic security that indirectly support host communities and displaced populations in East Africa [GPT].