Africa Not Taking Advantage of AGOA, Says U.S.

ADDIS ABEBA – With six years left for the program to expire, U.S. official says only a limited number of African countries are benefiting from African Growth and Opportunity Act (AGOA).

The trade act has been the cornerstone of the United States’ economic engagement with sub-Saharan Africa for almost two decades.

During that time, the U.S. has invested heavily to help African countries better utilize AGOA.

These include the creation of the trade hubs as resources for African businesses and entrepreneurs, and allocating over 7bln USD for trade capacity building initiatives, officials say.

Constance Hamilton, Assistant U.S. Trade Representative for Africa, said while AGOA has brought important benefits, Washington “recognizes that the benefits are uneven”.

“As successful as AGOA has been, its benefits have not been broadly shared by all the countries that are part of the program,” she told telephonic press briefing on Tuesday.

Historically, five countries are major beneficiaries as AGOA suppliers. Their 2017 export data to the U.S. put Nigeria ($6.1 billion) as top supplier followed by South Africa ($2.9 billion), Angola ($2.3 billion), Chad ($590 million), and Kenya ($408 million).

Last year alone, Ms. Hamilton said the top five AGOA beneficiaries accounted for more than 75% of AGOA exports.

In the strategic textiles and apparel sector, the top five countries accounted for 95% of AGOA apparel exports.

Hamilton said, additionally, AGOA has not led to the trade “diversification for which we originally hoped”.

Petroleum products still account for the largest portion of AGOA imports, with a 67% share while the volume of trade remains modest.

“In the AGOA clothing sector, for example, we get about $1 billion per year from Africa,” Ms Hamilton said.

The figure is just roughly 1% of the United States’ $95 billion imports in global clothing imports.

“To maximize AGOA, countries must take an active role in creating the competitive conditions in which companies, entrepreneurs, and farmers can thrive,” she said. “The AGOA’s eligibility criteria were designed to help improve these conditions.”

Officials from the United States and 39 sub-Saharan African AGOA-eligible countries plan to explore how they can maximize the benefits of the trade act in a forum scheduled to be held in Ivory Coast, August 4-6, 2019.

The two sides will deepen their trade and investment ties in parallel with the implementation of the African Continental Free Trade Area, the U.S. officials say.

“Our whole focus, and our primary focus, for the administration, is primarily significantly increasing our trade and investment with the continent as a mechanism for growing Africa’s prosperity,” said Ambassador Tibor P. Nagy, U.S. Assistant Secretary for Bureau of African Affairs.

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