More than 66,000 jobs in Kenya’s export processing zones (EPZs) are at risk as a US trade pact that underpins the country’s export economy is set to expire. The African Growth and Opportunity Act (Agoa), which for 25 years has allowed duty-free access for African goods into the US, lapses at midnight, Sept. 30.
Despite apparel dominating the programme, which supports over 800,000 livelihoods, tech-related jobs within the EPZs are equally significant, with approximately 3,000 to 7,000 roles, or 5 to 10% of the total workforce.
If the US Congress does not extend it, tariffs on Kenyan exports will rise above 30%, threatening years of gains in apparel and raising costs for technology service providers that depend on EPZ incentives.
Kenya’s EPZs are best known for textile firms like United Aryan, which produces Levi’s and Wrangler jeans, or Hela Clothing, which supplies PVH brands Calvin Klein and Tommy Hilfiger.
But these zones also house outsourcing and tech service companies such as Sama (a business process outsourcing firm that offers data labelling services) and Majorel (a content moderation company). They train and employ thousands of young Kenyans to label data for artificial intelligence systems, run call centres, and provide back-office support for US clients. These companies now risk losing duty-free imports of servers, networking equipment, and specialised hardware. Those costs underpin their ability to compete globally.
A threat to tech firms
The business models of companies like Sama and Majorel are highly sensitive to infrastructure costs. Losing EPZ exemptions means that tariffs and VAT will be applied immediately to imported computer hardware and networking equipment.
In outsourcing, contracts are priced per seat or per task. Even a small increase in the cost per worker can prompt clients to relocate projects to more affordable jurisdictions. Sama, for example, supports global AI firms by tagging images and text; therefore, a tariff-driven increase in capital expenditure for servers and equipment would erode its position as one of Nairobi’s anchor digital employers.
The same applies to Majorel, which provides multilingual customer support for multinational companies. A minor cost imbalance is enough to trigger a mass exodus of digital contracts, revealing that Nairobi’s nascent tech hub is critically dependent on an American trade waiver.
Pankaj Bedi, who chairs the apparel manufacturers and exporters sector at the Kenya Association of Manufacturers, wrote for the Star, a Kenyan newspaper, that lenders are already nervous.
“If Agoa cannot be renewed in time, Kenya must pivot immediately to a fallback plan: a Kenya–US Free Trade Agreement built on Kenya’s longstanding strategic partnership with the US and the low level of trade competition between the two countries,” Bedi said.
Financing payrolls and new contracts is becoming harder, as banks factor tariff exposure into their credit models, meaning that the squeeze runs across textiles and technology alike.
Agoa’s design gave Kenya two clear advantages: predictable access to the US market and fiscal incentives for companies inside the EPZ framework. Both are now at risk. The US administration has said it supports a one-year extension, but legislation requires congressional approval. The lack of urgency in Washington has left Nairobi’s exporters guessing.
Factories face digital gaps
On the apparel side, some Kenyan exporters have invested in digital tools to keep up with US buyers. Hela Clothing has implemented Radio-Frequency Identification (RFID) tagging and inventory management software to enhance visibility throughout its supply chain.
Ashton Apparel has piloted automated cutting machines to reduce waste. But many smaller firms still depend on manual processes. A tariff shock could tilt the economics towards automation, which in turn undermines the very jobs that Agoa was credited with creating.
US retailers are demanding detailed data on sourcing, labour conditions and environmental impact. Competitors in Bangladesh and Vietnam are already adopting blockchain platforms, such as TextileGenesis, and IoT monitoring to provide real-time reports.
Kenyan firms such as United Aryan and Hela still rely on manual audits. Suppose duty-free access is gone, the cost of lagging in compliance technology could be the difference between retaining and losing contracts.
What comes next
Kenyan officials say they are lobbying hard in Washington. President William Ruto argued last week that Agoa supports not just African exporters but also US consumers, delivering savings on everyday goods.
The Kenya Private Sector Alliance has called for a one- to two-year transition period to avoid sudden disruption. However, without congressional action, tariffs will take effect on October 1.
United Aryan cut 1,000 jobs this week, about 10% of its workforce. Business process outsourcing firms have not announced layoffs, but they face the same vulnerability. Both rely on a policy framework that may no longer exist by the time their next shipments or contracts are due.
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