America plans AGOA expansion to all Africa, Nigeria yet to take full opportunity of easy trade
By Jeph Ajobaju, Chief Copy Editor
Proposals are being floated by the United States Congress to extend the African Growth and Opportunity Act (AGOA) to all 54 African countries and also extend the trade deal to 2041.
The US enacted AGOA in 2000 to provide trade preference for African countries as part of efforts to strengthen US trade ties with Africa and the Caribbean.
The Act is set to expire in 2025. Nigeria is yet to take full opportunity of the window to export more goods to the US to boost foreign exchange (forex) and end perennial dollar shortage in the exchange market.
East African reports Senators Chris Coons of Delaware and James Risch of Idaho introduced the bipartisan AGOA Renewal and Improvement Act of 2024, which would see AGOA cover all 54 African countries and extend the programme to 2014.
The extension is expected to integrate AGOA with the African Continental Free Trade Agreement (AfCFTA) to promote and enhance intra Africa supply chain on the continent.
US Secretary of Commerce Gina Raimondo speaking in Nairobi during an economic event said plans to extend AGOA are on course.
“President [Joe] Biden and our administration have made it a priority to renew AGOA. It is the decision of the US Congress, so we have to work with some of the members,” Raimondo said.
The two Senators who proposed the bill enthused the update would push beneficiary countries to increase their exports under the agreement.
“This bipartisan bill aims to refine AGOA’s eligibility criteria, increase transparency, and hold US agencies accountable for their advice to the President,” Risch said.
Coons made a case for the renewal and improvement of AGOA and its benefits to African countries.
“The AGOA Renewal and Improvement Act is necessary to support continued economic development on the continent while further strengthening ties between the United States and partners in sub-Saharan Africa,” he stressed.
AGOA is limited to Sub-Saharan Africa but the new bill seeks to include North African countries on condition they meet eligibility requirements related to governance, human rights, and foreign policy.
The US legislators believe AGOA would provide US businesses interested in sourcing from Africa or investing in its supply chain assurance that the region possesses long-term trade potential.
Explainer
AGOA covers almost all goods imported to the US from sub-Saharan Africa. The list of covered goods has not been substantially updated since it was created in 2000. The new proposal seeks to add additional goods.
Countries in Africa become ineligible for AGOA once they become high-income economies according to the measure of GDP per capita by the World Bank. This means AGOA is only meant for developing economies on the continent.
Under AGOA, Nigeria is eligible to export textile and apparel goods to the US with minimal barrier.
__________________________________________________________________
Related articles:
Nigeria and others may lose AGOA opportunities over poor utilisation
US assures Nigeria of priority access to its market
Nigeria lags behind in utilisation of AGOA, AfCFTA
Experts stress barrier removals to realise AfCFTA benefits
__________________________________________________________________