Lerato Mbhiza
President Cyril Ramaphosa said that while several nations have benefitted from the African Growth and Opportunity Act (AGOA), more needs to be done to enhance trade relationships between the United States (US) and African countries.
Ramaphosa said while making the opening address to delegates at the AGOA Forum, where representatives from several countries gathered from Friday.
AGOA is a trade agreement that gives eligible African countries preferential access to duty-free products on the US market.
The AGOA Forum brings together the United States and AGOA-eligible countries along with representatives from key regional economic organisations and stakeholders from the private sector, civil society, and labour to discuss how to strengthen trade and investment ties between the US and sub-Saharan Africa.
The Forum aims to promote resilient, sustainable, and inclusive economic growth and development.
Ramaphosa said the forum needs to establish reforms that will not only benefit big corporations but also small and medium enterprises.
“The early reauthorisation of the renewal of AGOA, with a particular focus on how AGOA can be improved, will help to ensure that AGOA legislation achieves its objectives and reaches its full potential.”
There were 35 Agoa-eligible countries against the 49 countries that are potentially eligible for inclusion under the unilateral scheme, which has been in place since 2000.
Gabon and Niger’s eligibility have been removed from the AGOA because of “unconstitutional changes of government”, while benefits were withdrawn from the Central African Republic and Uganda because of “gross violations of internationally recognised human rights being perpetrated by those governments”.Mauritania’s eligibility was reinstated.
South Africa’s own eligibility was thrown into doubt earlier this year when US Ambassador Reuben Brigety alleged in May that South Africa had loaded arms and ammunition onto the sanctioned Russian vessel, the Lady R, in December 2022.
African Union Trade Commissioner Albert Muchanga said African Continental Free Trade Area and the African Growth and Opportunity Act – the two trade pacts would yield far greater benefits for the region.
Muchanga has also moved to quash fears that the advent of the AfCFTA would result in the United States (US) not renewing AGOA when it expires in 2025.
Muchanga, who was speaking on the first day of the AGOA Forum, told delegates that the combination of the two trade pacts would yield far greater benefits for the region.
AGOA, which was launched in 2000, gives duty-free and quota-free access to the lucrative US market for exports from more than 30 qualified African countries.
As it stands, the African countries do not have to offer such concessions to US imports in return.
This is already a cause of disagreement for some US businesses, who believe the US legislation left them at a slight disadvantage.
The more recent AfCFTA, which was established in 2018, gives US companies access to more than a billion people and a market valued at trillions of dollars.
Muchanga said the AfCFTA addressed some of the shortcomings in AGOA.
“They have been complaining to us that they cannot increase their investments across Africa because of the small, and fragmented markets.
“Through the continental free trade area, we have defragmented our economies, so we have their call for a large market space,” he said.
Plans to extend AGOA for another 20 years are expected to dominate talks at the ongoing forum.
United States Trade Ambassador Katherine Tai said African Growth Opportunity Act (AGOA) is a foundational trade and development programme with the African continent, to help sub-Saharan countries increase their access to US markets to improve trade.
Tai said discussions are also expected to ensure that Agoa is fit for the times we live in while preparing for the future.
“Following on the African leaders summit that Joe Biden hosted in December last year the instruction to all of all was ‘go to Africa, go often, and continue to build on this partnership. The African population is young and vibrant. The potential is here. We know that the future is Africa. It’s the basis on which we should be building our relationship with sub-Saharan Africa and the continent that’s why it’s so important.”
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