Is AGOA Helping African Countries?

Can’t get it wrong, in the fight for survival only the fittest or strongest survive. And I think the sages are right. The writings on the wall are palpable as the yawning gap speaks for itself. From time immemorial, trade between African countries and the west or other blocs has been one not without misgivings or mixed feelings in terms of deficit .Yet, African nations haven’t stopped it as they continue to engage their western partners in trade.

Why? The reason, African countries simply cannot do away with them. Perhaps certain things have to be done right and done well to ensure that the continent doesn’t continue to hemorrhage and leave its peoples perpetually impoverished.

Exactly 14 days from today as I put pen to paper a high-powered business delegation from the United States led by US Trade Representative Ambassador Robert Lighthizer is heading to Lomé the capital city of tiny Togo (in West Africa) for a two-today summit commencing the 8^th of August to the 10th.

The delegation will include senior officials from the U.S. Departments of State, Agriculture, Commerce, Labor, Transportation, Treasury, and the U.S. Agency for International Development, the U.S. Trade and Development Agency, as well as the Millennium Challenge Corporation, the Overseas Private Investment Corporation, and the U.S. African Development Fund. Members of Congress and their staff from both parties are also invited to attend the Forum.

According to the US Trade website, the Forum will also bring together senior government officials from the U S and 38 Sub-Saharan African AGOA-eligible countries to discuss ways to boost economic cooperation and trade between the US and Africa. The African Union and regional economic communities will also participate.

This year’s Forum is themed: “The United States and Africa: Partnering for Prosperity through Trade.” The 2017 Forum will explore how countries can continue to maximize the benefits of AGOA in a rapidly changing economic landscape, and highlight the important role played by women, civil society, and the private sector in promoting trade and generating prosperity.

Amina Salum Ali Ambassador of the African Union to the United States told Ghana Tourist Coach Media in an interview that not all countries of the sub-Sahara Africa are qualified to participate in AGOA even though the organisation had been in existence 17 years now.

“Currently only 39 Africa countries are eligible to participate in AGOA. But I am hopeful we can increase the number to include all the countries in the sub region.”

She revealed that out of the 39 or 38, just about 9 countries are truly benefitting and utilizing AGOA to the significant extent that they should. According to the Ambassador the remaining countries really needed to pick up the pace and continue to encourage the African citizens to benefit from the AGOA programme, which allows companies that are doing businesses through it to bring in products in and around Africa duty-free.

So my question then is what happened to the majority 30?

Herr response: “Africa must as possible speak with one voice, when we continue to negotiate not only with the United States but other trade partners as fragmented individual states the success rate of AGOA will not be as effective. Furthermore, we need to start look at the possibility of AGOA not being good in the past year 2025. And that we need to look into the discussion as to what do in the post AGOA period.”

2025 is around the corner and therefore discussions for post AGOA should start today. AGOA is moving forward, we‘ve had successes; we have had significant increase in trade between the United States and Africa. However, AGOA should have been much more successful than it’s been. We’re hoping that the remaining 8 years of AGOA, more and more African countries are going to take advantage of what AGOA has to offer.”

Post AGOA however, she emphasised, ‘Africa has got to begin to look at speaking with one voice, negotiating as far as trade not only with United States but also other African countries as well. There was an issue discussed of possibility of free trade areas and this should be approached in a continental viewpoint, failing that maybe regional which will be more appropriate instead of the individual Afriican countries negotiating individually.”

This year’s forum which is to be co-sponsored by the United States and Togo will also welcome representatives from the private sector, civil society, and the U.S.-sponsored African Women’s Entrepreneurship Program (AWEP) will participate in Forum activities August 8-9. The Ministerial plenaries will follow on August 9-10, bringing together senior government officials from the United States and the 38 African beneficiary countries.

Trade disparity
As I aforementioned trade between African countries and its partners hasn’t been all that favourable in the past and now. Trade data reveals for example that West African country Benin has exported almost nothing to the US since it joined membership 17 years ago. In contrast, the data shows the tiny nation has imported at least $600 million worth of US goods. That’s a classic example of the fittest shall survive game. What’s wrong with Benin? Are their goods not good enough to enter the US market?

Even countries that are understood to have significantly had a fair share of the deal are doing so per their petroleum and mineral producers. According to the data 99 per cent of Angola’s exports from AGOA have been energy-related. The trend isn’t different (but perhaps more than that of Angola) from other countries such as Nigeria, DR Congo and Botswana. So it turns out any other country with oil has portfolio experienced same.

And it’s been established that over 80 per cent of all exports under AGOA fall under the energy and mineral sector.

Nonetheless the programme has chalked some successes. Statistics suggest a positive balance of trade for AGOA participant countries. In 2008, the United States exported $17,125,389 in goods to then 41 AGOA countries, and the U.S. imported $81,426,951 for a balance of $64,301,562 in favor of the AGOA countries.

AGOA was originally signed in 2000 and it was renewed for another 10 years up to 2025 by the United States Congress at the just-ended forum held d in Washington DC. The AGOA law, which enhances market access to the United States for qualifying sub-Saharan African countries, has been the cornerstone of the U.S. government’s trade policy with sub-Saharan Africa since 2000. Also the law mandates that each year a special Forum be convened to discuss issues related to the implementation of the law and issues of economic cooperation and trade in general.

Eligibility
The legislation authorized the President of the United States to determine which sub-Saharan African countries would be eligible for AGOA on an annual basis. The eligibility criteria were to improve labor rights and movement toward a market-based economy. Each year, the President evaluates the sub-Saharan African countries and determines which countries should remain eligible.

I should point out countries’ inclusion has swayed over the years with changes in the local political environment. For instance in December 2009, Guinea, Madagascar, and Niger were all removed from the list of eligible countries. However, by October 2011, eligibility was restored to Guinea and Niger, and by June 2014, to Madagascar as well. Around 2015 Burundi was cautioned that it would lose its AGOA eligibility status. And she did lose her inclusion by the 1^st of January 2016. My checks revealed that the landlocked African nation remains suspended. In fact Burundi was suspended for its continued crackdown on opposition members. South Africa was the second country that faced suspension after Burundi.

The Forum is held in Washington every other year, and in an AGOA eligible African country in the other years. So far, the Forum has been held four times in Washington, and once each in Mauritius, Senegal, Ghana, Kenya (2009), Zambia (2011), Ethiopia (2013) and Gabon (2015).