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Grim outlook for Kenya’s Sh100bn Agoa target

Posted in Oilseeds, Fibres & Biofuels

KENYA - Kenya is not likely to meet its target of Sh100 billion ($1 billion) in earnings by the end of 2017 from textile exports, analysts have said.

Ecobank Capital soft commodities analyst Victoria Crandall said the country is currently producing an eighth of the cotton it requires for optimum production.

Kenya produces a mere 25,000 cotton bales a year, requiring imports to meet the 200,000 demand. Renewal of the African Growth and Opportunity Act has given impetus to the sector, which the government says has created thousands of jobs this year alone.

Ms Crandall said the country would require a sweeping, holistic approach to develop cotton production from scratch, adding that the government plan to provide 750 tonnes of certified seeds to farmers this year is inadequate to turn the sub-sector around.

PROVIDING SEEDS

“Providing seeds is only one of the many measures required to develop Kenya’s moribund cotton sector, which has been historically neglected for other cash crops,” said Ms Crandall.

Industrialisation Cabinet Secretary Adan Mohamed, however, dismissed the report, saying the targeted Sh100 billion would be facilitated by imported textile and not the local upstream industry.

“The initiative to start local farming is totally different and the textile we import from China and sew here, and sell to the United States is expected to gradually pick up in the next three years,” he told the Nation at Kilimo House yesterday.

A recent survey published by McKinsey and Company stated that Kenya needs to address its lack of local upstream industry since manufacturers have to import fabrics from overseas, which can take up to 40 days to make their way through customs and to a garment factory.

September 4, 2015; http://www.nation.co.ke/business/corporates/Grim-outlook-for-Kenya-s-Sh100bn-Agoa-target/-/1954162/2856758/-/inqru4z/-/index.html