Kenya says it plans to invest KES250 million into its flagging cotton industry to allow it to keep its preferential trade deal with the US.

The country is one of the main countries to capitalise from The African Growth and Opportunity Act, which provides African countries with duty and quota-free entry to the US market.

Kenya's cotton industry, however, is in a spiralling state of decay after low prices and decreased demand led many manufacturers to cease production.

David Mwiraria, Kenya's Minister of Finance, said in a budget speech that turning around the cotton industry was imperative to cutting down on poverty in the country, and added that he aimed to increase budget allocation for agriculture from 16 billion shillings in 2004/05 to 27.8 billion shillings in 2007/08.