Nigeria and others may lose AGOA opportunities as scrutiny increases
By Jeph Ajobaju, Chief Copy Editor
Policymakers in the United States are considering if and how the country should extend the African Growth and Opportunity Act (AGOA) which expires in 2025, with concerns over uneven utilisation or poor reciprocity from African countries.
Nigeria and some other countries have not fully utilised the opportunities provided in AGOA for them to export goods to the US with little or no tariffs, a system devised by the US to help boost economies across the continent.
Exports from Nigeria to America have fallen over the past few years, attributed to poor research and branding.
Professor Jennifer Cooke, Director of the Institute for African Studies at George Washington University, explained the reasons US authorities are demanding a better trade treatment from Africa, citing agitation for discontinuing AGOA.
She said some stakeholders have argued the US should demand reciprocal treatment as AGOA seems a one-way system under which goods are imported without tariffs, whereas US exporters pay tariffs that are often more than what Chinese and European importers pay.
According to her, this has led to dissatisfaction from policymakers who wonder why the biggest world economy is treated badly after giving free access to goods coming from Nigeria and other African countries.
“As a place becomes more strategic, the partnership becomes more far reaching,” Cooke stressed in Washington, according to reporting by The Guardian.
She said the first question every exporter must ask is if there is a demand for their product or service in the US.
Her words: “Many exporters just assume anything would sell and try to bring it in but you have to make your findings well before doing this. Also, the packaging or branding is very important.
“Most times, manufacturers that want to export don’t manufacture with us in mind but simply sell in ethnic supermarkets. Packaging is very important to the U.S. consumer.
“Manufacturers must ask themselves who they are exporting to and how to appeal to the American consumers who might not have the same taste as them.
“Reverse trade missions are important to introduce importers and exporters to one another as well as new markets, but they must benefit both sides. Making the connection to the consumer on the other side of your export is very important in facilitating trade opportunities.”
Cooke, citing the example of China, emphasised Nigerians in the diaspora have a role to play in helping local exporters connect with the American market.
“China has policies in place where they push entrepreneurs to set up companies in strategic places they have interest in. We don’t do that to our businesses, we can only encourage them.
“Perception is something we must work on too because a lot of businesses have the perception of risk for Nigeria, which is way bigger than the actual risk itself. This goes back to the lack of understanding about Africa.
“If something goes wrong in Zimbabwe, for example, people here say the whole continent is going downhill. There is a clear lack of nuanced understanding and a re-education process must be carried out to change a lot of these perceptions and this is a huge opportunity to close the perception gap.”
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Power Africa on energy supply
Michael Jordan, Power Africa Senior Advisor, disclosed the group’s partnership with the Africa Development Bank (AfDB) and World Bank to supply energy to some African countries, including Nigeria, will grow from 14 gigawatts (gw) to 30 gw by 2030.
Jordan said Power Africa is also working alongside other European countries to support African governments to implement their energy agenda.
He expressed regret that despite best efforts in the last decade, about 600 million people remain without electricity across sub-Saharan Africa.
He disclosed Power Africa, which is funded by USAID, seeks to reduce energy poverty, accelerate energy access, and decarbonise current energy systems.
“We are addressing challenges in partnership with private companies in Africa. Nigeria is the biggest electricity market in terms of the number of consumers,” Jordan added.
“The Nigeria Power Sector Programme which has been in existence in the last three years focuses on both on grid and off grid solutions.
“Nigeria has the highest number of people without power (mostly because it has more residents) and we know off-grid solutions are the best way to reach more people.
“We have worked with all the 11 distribution companies (DisCos) in the last few years to reduce energy losses and encourage productivity.”
Jordan said the programme, which is distributed across Sub-Saharan Africa, is working across geographic areas to achieve results and off-grid solutions like mini-grids, solar home systems, and solar for businesses.
“Power can raise the standard of living in many rural areas very effectively and exponentially as well as accelerate energy access,” he said.
