Kenya’s textile and apparel industry achieved a record export volume to the United States in 2025, but declining revenues have exposed growing structural challenges within one of Africa’s most important manufacturing sectors.
According to the Economic Survey 2026, Kenyan apparel manufacturers exported 148 million garments to the US market during 2025, a significant increase from 116 million pieces in 2024. The 27.6% growth in export volume demonstrates the sector’s continued production expansion and its importance to Kenya’s industrial economy.However, despite shipping more products than ever before, the value of these exports fell by 4.1%, declining from KSh 60.6 billion in 2024 to KSh 58.1 billion in 2025.
Record Production, Lower Returns
The latest figures reveal a growing imbalance between production volumes and export earnings, suggesting that Kenyan manufacturers are receiving lower prices for their products in international markets.While factories are producing and exporting more garments, revenue per piece has declined, highlighting increasing pressure on profit margins and raising concerns about the long-term sustainability of Kenya’s export-led apparel model.
The trend comes despite positive developments within the sector. The number of AGOA-accredited companies increased from 40 in 2024 to 44 in 2025, while capital investment rose by 10.4% to KSh 42.3 billion.Employment growth was equally impressive. Formal jobs under the AGOA framework expanded by 22.8% to reach 82,026 workers, reinforcing the apparel sector’s role as one of Kenya’s largest industrial employers.
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AGOA Extension Brings Relief but Not Long-Term Certainty
Earlier this year, U.S. President Donald Trump signed legislation extending the African Growth and Opportunity Act through December 2026.The extension was welcomed by Kenyan manufacturers, many of whom had been concerned about the future of duty-free access to the US market. AGOA remains a critical driver of Kenya’s textile and apparel exports and has played a major role in attracting investment into the country’s export processing zones.
However, policymakers and industry leaders recognize that another short-term extension does not provide the long-term certainty needed for major investment decisions.Following the renewal, U.S. Trade Representative Jamieson Greer emphasized that future trade relationships should deliver greater market access for American businesses while encouraging stronger commitments from partner countries.
Why Export Earnings Are Falling
Industry stakeholders point to several factors behind the decline in export value.Weak consumer demand in key Western markets has increased price sensitivity among retailers and brands. At the same time, intense competition from Asian manufacturing hubs continues to place downward pressure on garment prices.
Many Kenyan factories also remain heavily concentrated in basic apparel categories where margins are relatively low and competition is intense. As global buyers seek lower-cost sourcing options, suppliers often face pressure to reduce prices in order to maintain orders.
This has created what many analysts describe as a “volume versus value” challenge: factories are producing more garments, but each unit generates less revenue than before.
Kenya Must Move Up the Value Chain
The latest data underscores the need for Kenya’s apparel sector to transition from volume-driven manufacturing toward higher-value production.Industry experts argue that future growth will depend on expanding into premium apparel, technical textiles, branded fashion products, sustainable garments, and specialized manufacturing segments where competition is based on quality and innovation rather than price alone.
A stronger focus on product development, design capabilities, sustainability certifications, and regional textile integration could help Kenyan manufacturers capture greater value from global supply chains.Many exporters are also advocating for a comprehensive Kenya–US bilateral trade agreement that would provide a more stable framework beyond AGOA’s periodic renewals.
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A Critical Moment for Kenya’s Textile Future
The Economic Survey 2026 presents a mixed picture for Kenya’s textile and apparel industry. On one hand, the sector continues to attract investment, create jobs, and expand production. On the other, declining export earnings highlight the limitations of relying solely on volume growth.
As AGOA approaches another deadline and global competition intensifies, Kenya faces a crucial challenge: transforming its apparel sector from a high-volume exporter into a higher-value manufacturing powerhouse.Without such a transition, the country risks remaining trapped in a cycle where producing more garments no longer translates into greater economic returns, despite the sector’s growing contribution to employment and industrial development.
