African Ambassadors based in the United States have recommended that the African Growth and Opportunity Act (AGOA) should be reauthorized for at least another 15 years as AGOA’s expiry date approaches.
As a result of AGOA, which increased the range of products for which preferential access is granted by the Generalized System Preferences (GSP) including clothing, petroleum products, and a range of other agricultural and industrial products, exports from Sub Saharan Africa to the U.S market have increased. Nevertheless, not all Sub Saharan African countries are garnering benefits from the huge opportunities of AGOA, according to several sources. For example, only 4 countries of the 39 eligible countries were able to gain more than USD 100 million from exports through AGOA during 2012.
However, the scheme is due to expire in 2015. It was initially set to expire in 2006 but has been extended.
Many Sub Saharan African countries are requesting that the U.S government extend the AGOA, stating that they haven’t benefited from the scheme as much as they should have as a result of various hindrances including lack of infrastructure and properly trained and developed labour force, among others. During his visit in July this year, President Brack Obama hinted that the scheme will be extended. The extension therefore seems to be real. “The question will be for how long it is going to be extended,” said Girma Biru, Ethiopian Ambassador to the US and the Chairman of the Ambassadors’ AGOA Working Group.
After a series of studies and meetings, the working group identified several priority areas that will require further attention if AGOA is going to realize its full potential.
These priorities include addressing gaps in AGOA product coverage, including within product categories, creating greater flexibility in rules of origin for general goods and ensuring special provisions for apparel, establishing certainty in the duration of AGOA’s benefits, improving links to African regional integration, addressing supply side constraints, enhancing availability of dedicated resources, aggressively building capacity in several key areas among others.
The working group, therefore, has recommended that the U.S government should reauthorize AGOA at least for another 15 years. “Eligible countries would require up to 15 years until they become middle income countries and be able to compete for the global market,” said Girma. “That is why the working group recommended extending AGOA for that period of time.”
The working group also recommended that political dialogue should be expanded from its current ministerial status to includes heads of state so as to have a large and lasting impact. Increasing trade and market access is another recommendation of the working group. The working group also recommended more U.S investment in the continent and that the U.S’s direct and/or indirect involvement in capacity building should generate increased private sector engagement.
Girma Biru said that the recommendations were endorsed by the Midterm Review, a meeting held on 30-31 July in Washington DC. He also said that the working group has presented these recommendations to the US Congress. “I bet they are convinced about the whole presentation. I am not sure if they are ok with the number of years we recommended, though,” he told journalists on Friday August 9.