Former United Nations Conference on Trade and Development Secretary-General Mukhisa Kituyi.
The future of the African Growth and Opportunity Act (Agoa), now looks bleak, after US President Donald Trump’s order for a freeze on foreign aid, former United Nations Conference on Trade and Development (UNCTAD) Secretary-General Mukhisa Kituyi has warned.
Dr Kituyi on Monday said the extension of the Agoa deal hangs in the balance as the US would end the programme that has greatly benefited Kenya and other African countries.
Agoa signed several years ago expires at the end of 2025.
Agoa is a trade programme established in 2000. It allows eligible sub-Saharan African countries to export around 1,800 products, particularly textiles and agricultural goods to the United States market duty-free.
Enacted in 2000 under President Bill Clinton, Agoa was conceived as a political and economic tool that enhanced US soft power by providing economic benefits to sub-Saharan countries.
Agoa the core of US economic policy, promotes economic growth in Africa.
“The risk that African countries may lose duty-free access to the US markets has grown exponentially over the past weeks after the USAID freeze. If the Trump administration could shut down USAID, in the way in which they have done, I think Agoa may not survive," stated Dr Kituyi, during an interview at NTV'S Fixing the Nation Show.
"The suspension of the aid, by the White House has created uncertainty over the future of Agoa putting it at risk and it may die. However, l expect the US administration to push for renegotiating Agoa rather than ending it entirely," further stated Dr Kituyi.
After Trump last month abruptly suspended US foreign aid funding, there are renewed fears for the fate of the Agoa deal that gives products of African countries duty-free access to the US market.
Create jobs
Agoa has helped Kenya grow its economy, create thousands of jobs and diversify its exports since its inception.
Particularly, Agoa has benefitted Kenya's textile and apparel sector leading to monthly exports to the tune of Sh4.5billion.
Dr Kituyi said the United States wants stricter rules of origin to prevent companies from importing textiles from China or India, stitching them in Africa, and labelling them as ‘Made in Africa.'
Article 105 of Agoa states that to be a beneficiary, a country must meet eligibility criteria that include progress towards establishing a market-based economy, the elimination of barriers to US trade and investment and implementation of poverty reduction and economic policies, among other benchmarks.
President Trump, known for his economic nationalism, has shown little support for free trade.
Trump's most recent promise to impose a 25 percent tariff on goods from Mexico and Canada-America’s top trade partners and raise tariffs on Chinese products to 60 percent shows his protectionist agenda.
Sh15 billion
At the same time, Dr Kituyi advised President William Ruto's administration to urgently budget for Sh15 billion to fill the gap left by the US Agency for International Development (USAID) freeze.
"The sudden suspension of the USAID has plunged hundreds of thousands of Kenyans into a state of uncertainty and fear, spelling doom for Kenyans' jobs and funding," stated Dr Kituyi.
"The Kenyan government must now find Sh15 billion to just sustain the minimal work on HIV/AIDS and malaria. President Ruto and his administration should reduce wasteful spending and instead use the funds to bridge the gap left by USAID," added Dr Kituyi.
According to Dr Kituyi, the government should urgently look for ways to mitigate the pain created by the exit of USAID.
"President Ruto's administration should urgently reconfigure its priorities to fill the gap left by USAID. They can use contingent funds or call for a supplementary budget to fix the gap,” stated Dr Kituyi.
According to Dr Kituyi, the freeze by USAID is not the only money that Kenya receives.
"Many programmes run by the United Nations High Commission for Refugees (UNHCR) and the World Health Organization (WHO) are going to be highly impacted. More than 50 percent of UNHCR funding comes from the US," said the former UNCTAD secretary general.
"We are heading to a point where the Kenyan government will find food for refugees in camps," he added.
For many, the agency’s projects were lifelines, offering essential support in healthcare, education and economic development.
With the abrupt cessation of these vital programmes, approximately 40,000 direct and indirect employees now face an unsettling future, alongside countless others dependent on contractor engagements tied to USAID initiatives.
Numerous non-governmental organisations that relied on USAID funding now confront mass job losses and life-threatening changes for patients who depended on crucial health services.
Programmes that were instrumental in maintaining the well-being of countless Kenyans—ranging from maternal health to HIV/AIDS treatment— are now at risk, leaving a significant void in the healthcare landscape.
