New AGOA: Africa Needs To Do More To Benefit From Trade With US

Written by Kevin Mwanza

Last week, as the AGOA meeting ended in Libreville, Gabon, one thing that was clear for the 39 African countries’ delegate at the event was that the newly signed African Growth and Opportunity Act, that enables African countries to access US markets tax-free, will be different.

For starters, the over reliance on oil export to the US market will not cut it this time as the global crude oil market was already grappling with over supply, pushing prices low. Manufactured goods from Africa are still a preserve of a few countries like South Africa.

According to U.S. government data, nearly 80 percent of the $27 billion worth goods exported from Africa in 2013 under the deal was oil

“We need to make sure AGOA’s potential is fully explored and the benefits fully utilized. And that will require work from both sides of the AGOA equation,” said Michael Froman, US representative at the Gabon meeting, said.

“Our African partners will need to design strategies to take full advantage of AGOA tariff preferences. And the United States will need to work to make sure we are providing the trade capacity building and other assistance necessary to support those strategies.”

Many African leaders have lamented that their countries lack the necessary skilled labor and infrastructure to take advantage of AGOA.

AGOA was enacted in May 2000 to give African countries duty free access to the U.S. market. The act was renewed by the .S. Congress for another 10 years in June after the initial 15-year deal expired.

“The first thing that we will have to do much more of … is to engage and actively collaborate with our private sector. I think we need to the heavy lifting in that regard. That is the key to having the expected impact from AGOA,” Amina Mohammed, Kenya’s foreign affairs minister, told delegates at the meeting.