Nov 30, 2016
Kenyan govt plans credit facility to cotton farmers
Nov 30, 2016
In a bid to revive its ailing cotton textile industry, the Kenyan government is planning to provide training and credit facilities to cotton growers.
The initiative comes as the manufacturers of Kenya are counting on the growth of apparel exports to US by 5 per cent after the extension of African Growth and Opportunity Act (AGOA) for a period of 10 years.
Post-AGOA extension, Kenyan farmers have begun sowing seeds bought from Israel instead of recycling seeds. This is likely to nearly double Kenya’s cotton production for next year in comparison to current year.
The government has taken the initiative with a strong demand for lint from domestic mills and also to meet the needs of supply manufacturers exporting clothing and textiles to the US under a preferential trade deal, according to a Bloomberg report.
To attract the global export market, Kenyan government has begun modernisation of Eldoret-based Rivatex textile factory. Earlier this year, Rivatex had received a Sh3 billion loan from the government of India through the Exim Bank to buy a modern textile machine for the factory.
East Africa could potentially export garments worth as much as $3 billion annually by 2025, according to a 2015 McKinsey report. Affordable electricity and cheap labour make Kenya and Ethiopia attractive to investors, according to the report.
In 2015, East Africa's biggest economy had exported clothing valued at $380 million. Brands such as Puma, Walmart, JC Penny, H&M source some of their garments from Kenyan Export Processing Zones, which employ over 66,000 people.
Meanwhile, the regional East African Community bloc is working to revamp the domestic garment market by banning secondhand import of clothes at the end of 2018.
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