ADDIS ABEBA – The United States on Tuesday hailed Ethiopia’s growing use of the African Growth and Opportunity Act (AGOA). The acclaim came amid fear that African nations’ underutilization of the preferential access deal could force Washington not to renew it beyond 2025.
The AGOA accord provides 39 sub-Saharan African countries duty-free access to the U.S. for about 6,500 products. But the dominate items are Oil or petroleum-based, not the industrialized goods that provide a value-added boost to local economies, according to a U.S. official.
U.S. Assistant Secretary of State for African Affairs Tibor Nagy told AGOA Forum in the forum in Ivory Coast late Tuesday that the trend is changing.
He said non-oil trade under AGOA increased more than 300 percent since 2001, despite petroleum products still hold 67 percent share.
Nagy mentioned Kenya and Ethiopia as countries that are using the trade pact aggressively in recent times for their non-oil products.
“Ethiopia only started using the AGOA program for footwear in 2007,” he said. “However, in the last six years, Ethiopia’s exports through AGOA have increased over forty-five-fold.”
He said Ethiopia is now the first substantial AGOA footwear supplier to the United States. “What a great achievement,” he added.
Another east African nation, Kenya is now the second-largest exporter of non-oil products under AGOA with 70 percent of its exports fall under AGOA.
The majority of the products come from the agriculture sector, Nagy said, adding: “There clearly is a strong demand for Kenyan produce in the United States.”
Nagy’s glowing report over a few countries does not indicate the whole picture. “I do not think that AGOA has been the game-changer for many countries on the continent that we hoped it would be,” Constance Hamilton, assistant U.S. trade representative for Africa, said recently.
The value of trade between the U.S. and sub-Saharan Africa was $41.2 billion last year, making the U.S. the region’s third-largest trading partner. Trade with China was worth 3.5 times more.
African Union favors a free-trade agreement with the U.S. to replace the African Growth and Opportunity Act when it is expired in 2025.