The United States has reaffirmed its dedication to fostering regional integration in Africa as a critical driver of the continent’s economic growth and prosperity. This commitment was reiterated during a conference focused on the African Growth and Opportunity Act (Agoa) held in Johannesburg.
Agoa, a significant trade agreement, allows duty-free access to the U.S. market for specific product categories from eligible African nations, contributing to economic expansion and job creation across the continent. However, it’s essential to note that certain countries have faced sanctions for violating specific provisions of the agreement.
Recently, President Joe Biden indicated a possible exclusion of Uganda, Gabon, the Central African Republic, and Niger from Agoa. Uganda’s exclusion relates to the passage of an anti-gay law, while the other countries have faced criticism for democratic shortcomings, including the overthrow of elected leaders through coups.
The African Continental Free Trade Area (AfCFTA) also garnered unwavering support from U.S. officials during the conference. This free trade agreement aims to establish a single market for goods and services throughout the continent, with the potential to increase intra-African trade by a remarkable 52% and generate 18 million new jobs by 2035.
Don Graves, U.S. Deputy Secretary of Commerce, emphasized the potential that Agoa offers, stating, “We’re just scratching the surface of Agoa’s potential, and we’re equally excited about the African Continental Free Trade Area that has recently been established.”
He acknowledged that different African nations are at varying stages of industrial development and manufacturing capacity and stressed the importance of tailoring U.S. assistance to meet the specific needs of each country. The focus is on connecting American businesses with market opportunities in a mutually beneficial manner.
Additionally, Mr. Graves revealed plans to share U.S. expertise with Africa, building partnerships and enhancing capacity across the continent. The goal is to develop a skilled workforce capable of producing processed or finished products for global markets.
President Cyril Ramaphosa of South Africa voiced his desire for the U.S. to extend Agoa, which grants duty-free access to American markets for several African nations. He advocated for an extension of Agoa, intending to provide investors with a more extended incentive to establish new factories on the African continent. He believes that Agoa has played a pivotal role in the U.S.-Africa commercial relationship for over two decades and emphasized the need for longer extensions to facilitate investment.
The Agoa legislation is currently set to expire in 2025, and President Ramaphosa’s call for its extension reflects the broader ambition of strengthening economic ties between the U.S. and Africa. The commitment to both Agoa and the AfCFTA signals a promising trajectory for Africa’s economic development and trade partnerships.
Picture: Kailene Pillay / IOL
By: Montel Kamau
Serrari Financial Analyst
5th November, 2023
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