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DHL Boss Says AGOA Creates ‘Virtuous Cycle Of Success’ in Africa

DHL Boss Says AGOA Creates ‘Virtuous Cycle Of Success’ in Africa

Express mail service provider DHL Express has its finger on what merchandise is moving around Africa, who’s moving it, and how much.

The company has seen significant volume growth in sub-Saharan Africa in terms of trade with the U.S. since the 2000 introduction of African Growth and Opportunity Act (AGOA), the company’s managing director said in an interview in CapitalFM.

Charles Brewer is managing director of DHL Express sub-Saharan Africa, a division of the German logistics company Deutsche Post DHL. Deutsche Post is the world’s largest logistics company.

Along with many world leaders, DHL supports the call for the renewal of AGOA when it expires in 2015, Brewer said.

From CapitalFM.

“Trade lanes in Africa have increased significantly as a result of relieved trade barriers, which have had a positive impact on many local businesses,” Brewer said. “A key driver of this growth has been AGOA, which has stimulated trade and investment between Africa and the U.S.”

DHL has seen a significant growth in trade between Sub Saharan Africa and the U.S., with strong positive growth in the last year.

Brewer points to figures by AGOA1, which reveal that the U.S. imported $8.468-million worth of goods from the Southern Africa Development Community (SADC) region in 2000 and $19.869 million in 2012. Figures released by the U.S. Department of Commerce – International Trade Administration2, report that in 2013, U.S. imports from sub-Saharan Africa, under AGOA, totaled $39.3 billion. The top three trade lanes to the U.S. from sub-Saharan Africa originated from Nigeria, Angola and South Africa, which accounted for $11.72, $8.74 and $8.48 billion respectively.

Brewer said AGOA offers tangible incentives to 40 sub-Saharan African beneficiary countries, such as duty- and quota-free access to the U.S. market for certain product lines.

“AGOA has facilitated trade between sub-Saharan Africa and the U.S. by enabling the trade process, as well as successfully promoting the integration of sub-Saharan Africa into the global economy. These favorable trade conditions have also allowed the region to maximize the opportunities available and increase exports,” said Brewer.

Brewer said that since the introduction of AGOA, DHL Africa has seen an increase in primary trading sectors like manufacturing, apparel and footwear – all directly supported by AGOA. In addition, it has also witnessed an increase in secondary sectors that are dependent on agriculture, petroleum and natural gases.

Due to expire in 2015, it is the decision of the U.S. Congress on whether to extend or amend the AGOA agreement. Brewer says that Sub Saharan Africa’s growth is still dependent on trade facilitation and enhancing both intra-regional trade and global trade. “While trade between the U.S. and sub-Saharan Africa has increased significantly in the last few years, there is still much room for growth.”

Brewer’s views were echoed at the AGOA Forum where World Bank Group President Jim Yong Kim said trade preference schemes such as AGOA can play an important role in helping Africa realize its opportunities to expand trade. AGOA helps African countries in diversifying their exports, and moving away from dependence on minerals and commodities to reach more diversified and inclusive sources of export growth. U.S. President Barack Obama also announced his commitment to support the continuation and enhancement of AGOA.

“Africa is the ‘last frontier,” Brewer said. “The more we collectively focus on connecting it with the world, the more sustainable its economies will be and the more jobs we will create – creating a virtuous cycle of success.”

Read more at CapitalFM.