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Web Exclusive | December 2016

Kenya plans cotton revival

Kenya plans to revive its cotton industry, a major foreign-exchange earner until the 1980s, amid strong demand for lint from domestic mills and the potential to supply manufacturers exporting clothing and textiles to the U.S. under a preferential trade deal. 

The government is planning training and credit facilities for farmers as part of a bid to restore production that peaked at 38,000 metric tons of seed cotton in 1984-85. Kenya currently produces 15,700 tons of seed cotton, creating about 5,240 tons of lint. Demand for the latter is about 37,000 tons, with the shortfall imported from neighbouring countries.

The initiative comes as manufacturers in East Africa’s biggest economy are counting on apparel exports to the U.S. growing 5% this year after the U.S. extended its African Growth and Opportunity Act, or AGOA, by a decade. East Africa could potentially export garments valued at as much as $3 billion annually by 2025, according to a 2015 McKinsey report. Affordable electricity and cheap labour--with monthly salaries as low as $60--make producers such as Kenya and Ethiopia attractive to investors, the study shows.
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