The American Apparel & Footwear Association applauds Senator Chris Coons (D-DE) and Senator James Risch (R-ID) for introducing the AGOA Renewal and Improvement Act of 2024.Currently set to expire in September 2025, AGOA is a pivotal trade preference program that provides duty-free access to the U.S. market, fostering economic growth and opportunity between the U.S. and eligible African countries.

This program is the cornerstone of the U.S. economic relationship with Sub-Saharan Africa. By lowering the cost of trade and encouraging investment in the region, AGOA has created valuable opportunities for U.S. businesses, workers, and consumers, while promoting sustainable economic growth and development throughout the region.

The proposed AGOA Renewal and Improvement Act of 2024 would extend AGOA by 16 years, pushing the program’s expiration from 2025 to 2041.

This long-term extension would provide businesses the certainty needed to invest in sub-Saharan Africa, further supporting economic growth and development in the region.

The extension mirrors the 16-year sunset provision included in the U.S.-Mexico Canada Agreement (USMCA).

AGOA is also a bridge to trade agreements, such as the African Continental Free Trade Area (AfCFTA) and the U.S.-Kenya Strategic Trade and Investment Partnership (STIP).

"As companies work to diversify out of China today more than ever, immediate and long-term renewal of AGOA for a 16-year period would be incredibly impactful and timely," says AAFA president and CEO Steve Lamar.

"AGOA renewal would bring quality work opportunities for African workers, many of whom are women, as companies commit to retain or grow orders from African factories as vital partners in their sourcing matrices."

"Sourcing decisions are already being made for goods that will be shipped after AGOA’s current expiration," adds Beth Hughes, AAFA vice president of trade and customs policy.

"As we fast-approach the September 2025 expiration date, we do not want to see trade begin to drop off as sourcing is shifted away from African countries.

The current expiration of Generalized System of Preferences – which we are hoping will also be renewed for a long term during 2024 – is fuelling speculation that a similar fate awaits AGOA. Action now, well before the program expires, eliminates that uncertainty."

   Update: The Bill was introduced in the Senate Finance Committee on 11 April. Download it here.

   Update: Download a summary here. 

   Official Title as introduced: A bill to reauthorize the African Growth and Opportunity Act.

   Sponsor: Sen. Coons, Christopher A.    [D-DE]

   Co-sponsors:

Sen. Risch, James E.    [R-ID]*              

Sen. Young, Todd    [R-IN]*

Sen. Bennet, Michael F.    [D-CO]*

Sen. Van Hollen, Chris.   [D-MD]*

Sen. Rounds, Mike    [R-SD]*

Sen. Durbin, Richard J.    [D-IL]*

* = Original cosponsor

A bipartisan group of senators will introduce a bill to renew the United States' trade pact with sub-Saharan Africa ahead of its expiration next year, an aide to one of the senators said on Thursday.  [    Download it here and download a summary here]

The bill was introduced by Senators Chris Coons, a Democrat, and James Risch, the top Republican on the Senate Foreign Relations Committee. A cross-party group of senators - Dick Durbin, Michael Bennet, Chris van Hollen, Todd Young and Mike Rounds - are also co-sponsoring the bill.

An aide to Coons said it was a high priority to reauthorize the African Growth and Opportunity Act (AGOA) this year.

The bill, which was seen exclusively by Reuters, would renew the African Growth and Opportunity Act for 16 years, through 2041, and help countries implement strategies to take advantage of the program.

It would also maintain benefits for countries as they grow richer, enabling them to remain in the program if they are determined to be high-income for five years rather than removing them if they reach that threshold for a single year.

Under the bill, countries would be reviewed for eligibility every other year - instead of annually, under current statute - but the U.S. president and certain congressional leaders could review countries' eligibility out of cycle at any point.

If countries were found to be ineligible for the program, the president would have a menu of options for enforcement ranging from full termination of benefits to taking no action. Current statute requires the president to terminate AGOA benefits if a country does not meet eligibility.

A draft of the bill introduced by Coons last November (November draft “Agoa Renewal Act of 2023”) mandated an immediate out-of-cycle review for South Africa, one of the biggest beneficiaries of the program, but it is not included in this version of the bill.

An aide to Coons said it was viewed as unnecessary to single out a particular country since the bill already allows for out-of-cycle reviews, but senators remain concerned about South Africa's activities.

U.S. President Joe Biden has said he supports the reauthorization of the trade pact, which was initially enacted in 2000. More than $10 billion worth of African exports entered the United States duty-free under the program in 2022, according the U.S. Trade Representative's office.

American business groups have said they need certainty about AGOA in order for African countries to take advantage of global efforts to lower dependence on Chinese manufacturing.

Aides to Senate Democratic leader Chuck Schumer and Senate Foreign Relations Chair Ben Cardin did not immediately respond to requests for comment.

   Update: The Bill was introduced in the Senate Finance Committee on 11 April.  Download it here.

   Update: Download a summary here. 

   Official Title as introduced: A bill to reauthorize the African Growth and Opportunity Act.

   Sponsor: Sen. Coons, Christopher A.    [D-DE]

   Co-sponsors:

Sen. Risch, James E.    [R-ID]*              

Sen. Young, Todd    [R-IN]*

Sen. Bennet, Michael F.    [D-CO]*

Sen. Van Hollen, Chris.   [D-MD]*

Sen. Rounds, Mike    [R-SD]*

Sen. Durbin, Richard J.    [D-IL]*

* = Original cosponsor

Consistent with the Biden-Harris Administration’s commitment to the highest levels of transparency in trade agreement negotiations, the Office of the United States Trade Representative (USTR) today released summaries of texts proposed by the U.S. side on good regulatory practices, workers’ rights and protections, and a second tranche of agriculture text. Negotiations on these texts are ongoing. USTR will negotiate the workers’ rights and protections and agriculture texts during the April 2-12 round in Washington, D.C.

The goal of the Partnership is to increase investment; promote sustainable and inclusive economic growth; benefit workers, consumers, and businesses (including micro, small, and medium-sized enterprises); and support African regional economic integration.

The summaries detail the negotiating proposals from the U.S. side for the following chapters: a second tranche on agriculture, good regulatory practices, and workers’ rights and protections.  USTR previously released public summaries of texts on agriculture; anticorruption; micro, small, and medium-sized enterprises; and services domestic regulation. 
 
The United States and Kenya share the goal to pursue, through the Partnership and these negotiations, high standard commitments in a wide range of areas in order to achieve economically meaningful outcomes, as outlined in the joint statement that was released on July 14, 2022.

Download the summaries and readouts in the US-Kenya STIP section here on AGOA.info. 

Experts at the Center for Global Development argue that the unconventional approach could bring billions in new trade opportunities and would fit with US “friend-shoring” efforts.

The US should pay ‘negative tariffs’ in Africa – essentially targeted manufacturing subsidies – to help revive its faltering African Growth and Opportunity Act (AGOA), according to a new report from the Washington-based Center for Global Development (CGD).

CGD’s Justin Sandefur and Arvind Subramanian estimate that $291m in negative tariffs – which they describe as “a drop in the bucket compared to aid levels” could create $1.5bn in new trade and would fit with US “friend-shoring” efforts – the act of manufacturing and sourcing from countries that are geopolitical allies.

AGOA, which was launched in 2001, grants duty-free access to the US market for thousands of products from eligible African countries. Some 80% of the tariffs waived under the program have been for garment exports.

Despite an initial “fast and furious” impact within five year’s of AGOA’s passage – in which African garment exports to the US grew by 150% and new factories were opened in Kenya, Lesotho, and Mauritius – the benefits of the AGOA soon fizzled out. By 2010, garments exports were almost back at their 2000 level, the result, the authors say, of Chinese competition flooding the market when “arcane” global textile treaties expired in 2005.

“During the early-aughts “AGOA boom”, African apparel exports enjoyed a double advantage over global competitors, including China. They not only faced zero tariffs, they bypassed quotas. Studies in the 1990s typically estimated those quotas were equivalent to an additional tariff on the order of anywhere from 10 to 100 percent on garments from various Asian countries. So Africa’s advantage was huge – and most of it disappeared in 2005.”

A radical solution?

The authors say that their proposal for negative tariffs could kickstart the flagging scheme.

“To re-establish that tariff advantage – or, more likely, to level the playing field against ferociously competitive Asia – we propose a simple but fairly radical tweak to AGOA starting in 2025: negative tariffs. Since AGOA tariffs are already at zero, the only way to open up a price incentive for production in Africa at this stage without totally tearing up the World Trade Organization (WTO) rules would be to cross into negative rates. While unconventional, we find that such tariffs – think of them as targeted manufacturing subsidies for extremely lagging regions – would be both effective and cheap.”

The authors estimate that a 10 percentage point negative tariff on apparel products would “cost” about $291m in foregone revenue, while a 20 percentage point negative tariff would be more expensive, at about $880m.

“The benefits would potentially be large. We estimate that a 10 percent negative tariff would create about $1.5 billion in new trade, and a 20 percent tariff nearly $3 billion,” they say.

The authors argue it’s a good time for the US to make an ambitious push on African industrialisation. After dominating global apparel exports in the 2000s and 2010s, China’s market share is now in decline, falling from a peak of 38% of American apparel imports in 2010 to 24% in 2022, as the country graduates to more capital- and skill-intensive industries.

However the authors say that additional support is also needed to build manufacturing supply chains on the continent.

“If capital markets function perfectly, then if America provides tariff incentives to expand manufacturing in Africa, new private investment in African garment factories should follow. In the real world, policy action on the investment side may be necessary…The US could take the lead in addressing this challenge. It could set aside, say, $2.5 billion (implying about a 15 percent increase in US foreign aid to the region) as venture capital to build manufacturing supply chains in Africa.”

That could offer an investment role for the US government’s Development Finance Corporation (DFC), which the report says committed just $50m to African manufacturing projects in full-year 2023 out of a $2bn Africa portfolio.

“Strengthened AGOA trade preferences could serve as a pull mechanism to create bankable projects for DFC to lend to and invest in, reorienting its work away from financial services towards job creation and industrialisation.”

Time for change 

Without reform, AGOA will continue to struggle to make an impact, the authors say.

“Simply renewing AGOA “as is” won’t be enough to enable African economies to compete. But stronger policy tools exist; evidence suggests they’re affordable and could significantly boost the continent’s industrial output. Trade not (just) aid, and investment in manufacturing in Africa, not just extracting raw materials from Africa, should be the new mantra for policymakers as they contemplate possibilities for AGOA 2.0.”

US Ambassador Brian Shukan hosted a bipartisan delegation from the United States Congress from March 28-29. The House Ways and Means Committee, led by Chairman Jason Smith focused on economic opportunities for Benin under the African Growth and Opportunity Act (AGOA).

The delegation held discussions with the President and government officials, addressing specific recommendations for AGOA and to inform the reauthorization process.

AGOA has been at the core of U.S. economic policy and commercial engagement with Africa since its initial authorization in 2000. 

The delegation’s visit underscores U.S. commitment to supporting Benin’s growth and importance of sustained progress in upholding the rule of law and democratic principles and promoting good governance.

Ambassador Shukan stated, “We welcome the visit of Chairman Smith and his bipartisan delegation, demonstrating the commitment of the U.S. Congress to reauthorize AGOA, which remains a priority for the Administration and a key pillar of the shared prosperity and economic engagement between Benin and the United States. AGOA can be a transformational tool for prosperity and upholding our shared rights and values.” 

AGOA offers reduced tariffs on more than 6,700 products produced in Africa to be exported to the U.S. market. 

To meet the rigorous eligibility requirements for AGOA, countries must establish or make continual progress establishing a market-based economy, the rule of law, political pluralism, and rights to due process. Additionally, countries must eliminate barriers to U.S. trade and investment and enact policies to reduce poverty, combat corruption, and protect human rights. Benin has remained eligible for AGOA since the program’s creation.

For further information, please call the U.S. Embassy at +229 21 30 06 50. 

AGOA Benin Profile:
https://agoa.info/profiles/benin.html

AGOA Eligibility Criteria:
https://agoa.info/about-agoa/country-eligibility.html

USTR/2022 AGOA Implementation Report:
https://ustr.gov/sites/default/files/files/reports/2022/2022AGOAImplementationReport.pdf

A delegation the United States Congress visited Mauritius March 26-27 to assess the implementation of the African Growth and Opportunity Act (AGOA).  

The visit underscored the United States’ commitment to deepening the economic cooperation between our two countries and to support Mauritius’ continued utilization of AGOA benefits.

The delegation of eight members from the Congressional Ways and Means and the House Foreign Affairs Committees met with Mauritian government officials, including Prime Minister Pravind Jugnauth, the Mauritius Export Association, and representatives from the business sector.  

The delegation visited the local factory RT Knits and discussed opportunities and sectors that could benefit expanding trade and investment ties.

Ways and Means Committee Chairman Jason Smith stated, “The bipartisan delegation in Mauritius today strongly supports AGOA and is committed to working closely with the Mauritian government to see the program renewed.  We look forward to working with Prime Minister Jugnauth to find ways to deepen our trade and economic ties in the future.”

U.S. Ambassador Henry Jardine said, “The key message that the delegation conveyed during their time here in Mauritius is that they are very supportive in seeing how we can renew AGOA.  The Members of Congress were very keen to learn about the value and impacts of AGOA here in Mauritius.

The delegation said that they are going to take that message back to Congress and look at the considerations that need to be made in the case of Mauritius in particular.”

The AGOA program has been a cornerstone of U.S.-African economic relations, offering sub-Saharan African countries duty-free access to the U.S. market.  Mauritius has been among the successful participants, with its diverse exports ranging from textiles to seafood benefiting significantly from AGOA.  In 2022, U.S. goods imports from Mauritius totaled $285 million (Rs 13.224billion).

About AGOA

Enacted in 2000, AGOA provides eligible sub-Saharan African countries with duty-free access to the U.S. market for over 1,800 products, in addition to the more than 5,000 products eligible for duty-free access under the Generalized System of Preferences program.  

To meet the rigorous eligibility requirements, countries must establish or make continual progress establishing a market-based economy, the rule of law, political pluralism, and rights to due process.  Additionally, countries must eliminate barriers to U.S. trade and investment and enact policies to reduce poverty, combat corruption, and protect human rights.

For more information

Mauritius Trade and Investment Summary:
https://www.ustr.gov/countries-regions/africa/mauritius

AGOA Mauritius Profile:
https://agoa.info/profiles/mauritius.html

AGOA Eligibility Criteria:
https://agoa.info/about-agoa/country-eligibility.html

USTR/2022 AGOA Implementation Report:
https://ustr.gov/sites/default/files/files/reports/2022/2022AGOAImplementationReport.pdf

Duty- and quota-free access to the United States of America’s market granted by the African Growth and Opportunity Act (AGOA) has played a significant role in boosting trade and investment between sub-Saharan Africa and the US.

Many qualifying African countries have achieved notable successes in exporting goods under Agoa to the US. These successes include textiles and apparel from Kenya, Ethiopia, Mauritius, Lesotho, Ghana, and Madagascar.

For example, in Kenya, the sales dominated by apparel under Agoa have grown from US$55 million in 2001 to US$603 million in 2022, constituting 67.6 per cent of the country’s total exports to the US, according to information obtained from the World Economic Forum.

Kenya is the second-largest exporter of textile and apparel products to the United States among Agoa beneficiaries.

Furthermore, Kenya will receive $55 million from the US to expand its export processing zones, aiming to bolster Nairobi’s apparel exports, data from Agoa website show.

The funding announcement was made by the US initiative Prosper Africa and the US Embassy during the launch of the US-Kenya Business Roadshow on April 25, 2023, in New York. This funding commitment aligns with President Joe Biden’s pledges made at the US-Africa Leaders’ Summit last year.

The funds, to be administered through USAid and Prosper Africa, will primarily target women-led organisations and export processing zones (EPZs), where a significant proportion of the workforce consists of young women.

US Ambassador to Kenya, Meg Whitman, expressed enthusiasm about partnering with the Prosper Africa initiative to drive investment not only in Kenya but also in countries across the African continent.

The funding involves six new co-investments with American and Kenyan apparel companies, which will connect American buyers with Kenyan manufacturers, creating jobs.

Outline of Agoa

Enacted in 2000 by the United States, Agoa was designed to promote economic development in sub-Saharan Africa by facilitating trade and investment. One of its key provisions was to provide duty-free access to the US market for eligible African countries, including Nigeria, for a wide range of products, including textiles and apparel.

Agoa provides eligible sub-Saharan African countries with duty-free access to the U.S. market for over 1,800 products, in addition to the more than 5,000 products that are eligible for duty-free access under the Generalised System of Preferences programme.

To meet Agoa’s rigorous eligibility requirements, countries must establish or make continual progress toward establishing a market-based economy, the rule of law, political pluralism, and the right to due process.

Additionally, countries must eliminate barriers to U.S. trade and investment, enact policies to reduce poverty, combat corruption, and protect human rights.

By providing new market opportunities, Agoa has helped bolster economic growth, promoted economic and political reform, and improved U.S. economic relations in the region.

Thirty-two countries will be eligible for Agoa benefits in 2024. In 2015, Congress passed legislation modernising and extending the programme to 2025.

Nigeria’s textile and apparel potential

Nigeria possesses significant potential in the textile and apparel industry, with a rich history of textile production and a large domestic market. The sector can create employment opportunities, promote industrialisation, and contribute to economic growth.

One way of estimating the size of or valuing Nigeria’s textile and apparel market is to look at the value of imported garments or apparel. Data from the National Bureau of Statistics (NBS) indicates that the textile, apparel, and footwear subsector last experienced positive growth in 2018.

Despite the federal government’s efforts to revive local production through protection policies, Nigeria’s textile industry continues to struggle, leading to a doubling of textile imports over the past years.

Since then, the Central Bank of Nigeria (CBN) has implemented various intervention programmes, including financial support, training initiatives, and foreign exchange restrictions on textile imports at the official exchange market.

Despite these efforts, NBS data shows a significant increase in textile imports, rising by 100.3 per cent to N365.5 billion in 2022, that is, $862.23 million in 2022 exchange rate marking the highest level in at least 15 years, up from N182.5 billion in 2020, this was $462.12 million, in the best exchange rate of the 2020.

Hamma Kwajaffa, director-general of the Nigerian Textile Manufacturers Association told BusinessDay that Nigeria’s high cost of production makes local textile and apparel makers uncompetitive, and discourages investments.

During the 1970s and early 1980s, Nigeria, Africa’s most populous nation, boasted over 180 textile mills, employing more than one million Nigerians. Among these mills were United Nigerian Textile Limited, Aswani Textile, Afprint, Asaba Textile Mills, and Edo Textile Mills.

However, by the 1990s, these once-thriving firms vanished due to challenges such as smuggling, rampant importation, unreliable power supply, inconsistent government policies, and insecurity, making it impossible for them to remain competitive.

Nigeria’s efforts through NEPC to seize AGOA

The Nigeria Export Promotion Council (NEPC) initiated several projects and initiatives to leverage Agoa and promote Nigeria’s textile and apparel exports to the US market. Examples of these projects include:

Capacity Building Programmes: NEPC organised training workshops and capacity-building programmes to enhance the skills and capabilities of Nigerian textile manufacturers and exporters.

Market Access Initiatives: NEPC facilitated trade missions and participated in trade fairs and exhibitions in the United States to showcase Nigerian textile products and explore market opportunities.

Quality Standards Improvement: NEPC worked to improve the quality standards of Nigerian textile and apparel products to meet the requirements of the US market and enhance competitiveness.

Status of NEPC projects

Despite these efforts, the outcomes of NEPC projects have been mixed, and the Nigerian textile and apparel industry has failed to fully capitalise on Agoa. While some companies have benefited from Agoa preferences and increased exports to the US market, the overall performance of the sector has been below expectations.

Despite its potential, Nigeria’s textile and apparel industry has failed to fully benefit from Agoa due to various challenges and limitations.

To unlock the sector’s growth potential and capitalise on future trade opportunities, Nigeria must address the challenges dwarfing the sector through targeted policies and interventions that promote competitiveness, innovation, and market access.

Agoa’s conclusion in 2025 underscores the urgency for Nigeria to accelerate reforms and strategic investments in its textile and apparel industry to position itself for sustained growth and competitiveness in the global marketplace.

Nigeria’s top 10 textile and apparel-making states

Unfortunately, there isn’t official data readily available to definitively rank the top 10 textile and apparel-making states in Nigeria. However, several states consistently rank high anecdotally and based on industry reports.

However, this ranking is based on the criteria below.

Industry recognition: States known historically or anecdotally as centres for textile production or garment manufacturing made the list.

Concentration of businesses: States with a higher density of textile mills, garment factories, and tailoring businesses were considered strong contenders.

Presence of traditional textiles: States known for specific, well-regarded traditional textiles like Kano cloth, Akwete, Aso Oke, and Adire were included due to their cultural significance and potential economic impact.

This is not an exhaustive list of criteria, and a more in-depth analysis might consider factors like:

Fabric production capacity: States with higher cotton production or established textile mills would likely rank higher.

Export volume: Ideally, data on textile and apparel exports from each state would be a strong ranking factor.

Employment numbers: The number of people employed in the textile and apparel sector within each state would be valuable data.

Unfortunately, such comprehensive data isn’t readily available for all Nigerian states.

Here are the top 10 textile and apparel-making states:

Abia State: Often referred to as the “Fashion Capital of Nigeria”, Abia State is home to a large concentration of textile mills, garment factories, and indigenous tailors particularly in Aba, its commercial centre.

Lagos State: Lagos, the commercial hub of Nigeria, also boasts a significant textile and apparel industry. From large manufacturers to a thriving market for local fabrics and small-scale tailoring businesses, Lagos plays a vital role in the sector.

Kano State: Located in northern Nigeria, Kano has a rich history of textile production and is known for its traditional Kano clothes. The city also houses several modern textile factories.

Ogun State: With its proximity to Lagos, Ogun State has emerged as a textile and apparel manufacturing hub. Several industrial parks house textile companies, making the state a significant player in the sector.

Ondo State: The southwestern state of Ondo is known for its production of Akwete cloth, a handwoven fabric traditionally made by women. The state is also increasingly attracting textile manufacturers.

Osun State: Osogbo, the capital of Osun State, is known for its traditional Aso Oke cloth. The production of this weft-faced, narrow-loom Yoruba textile is a significant source of income for many in the state.

Kwara State: Kwara State has a growing textile industry, with several garment factories operating in the state. The state is also home to many cotton farmers.

Kaduna State: Kaduna State has a long history of textile production, dating back to the pre-colonial era. The city of Kaduna was once a major centre for the textile industry, and there are still some textile factories in operation today.

Delta State: Delta State is home to a growing textile industry, with several garment factories operating in the state. The state is also working to develop its cotton production capacity.

Ekiti State: Ekiti State is known for its production of Adire cloth, a traditional indigo-dyed fabric. The state is also home to some textile manufacturers.

It is important to note that this list is not exhaustive and the ranking can vary depending on the specific criteria used.

During an exclusive side chat at Source Fashion in London, the president of Ethiopia's Hawassa Industrial Park Investors Association (HIPIA) Hibret Lemma, confesses Ethiopia is only just at the start of its shift away from relying solely on the US for its garment exports.

He admits losing AGOA was a big hit to the country's garment sector and it slowed down growth considerably. However, Ethiopia's garment suppliers were hopeful that AGOA would be reinstated by the end of 2022 and that hope continued again until the end of 2023.

The nation's apparel sector has now accepted the waiting game is set to continue, with even AGOA's existing members still waiting for the agreement to be extended beyond its 2025 expiry date.

Lemma states: "We're back to reality now so we’ve been looking at the Europe market for about a year but it’s still in the early stages."  

In fact, Lemma took part in a panel session at last summer's Source Fashion event where he explained why European fashion sourcing executives should consider tapping into Ethiopia's sourcing potential.

Ethiopia's main challenge since losing AGOA

In his one-on-one chat with Just Style, however, Lemma is much more frank about the challenges since losing AGOA. He notes the main problem for the Hawassa Industrial Park is that it was originally designed with the US fashion industry in mind.

It was built seven years ago with US fashion conglomerate PVH Corp as an anchor investor, so the factory lines were made for repetition and big volume orders.

Ethiopia's manufacturers were not looking at other markets before the loss of AGOA so it meant cutting staff and employees having to go back to their rural homes.

Hawassa, which is still Ethiopia's biggest industrial garment factory park, had 4,500 employees at its peak. Since the end of the country's AGOA membership in 2022 this has dropped down to 3,000.

For Lemma, losing staff due to war and economic issues was a major challenge and on top of that having less help from the government, due to it it having other priorities. He adds access to foreign currency has historically also been a problem, but that is getting better.

The silver lining is that most companies managed to stay at the park, despite some downscaling, but they are now looking for reasons to expand. Indeed, despite the loss of AGOA Lemma retorts proudly that only two companies have closed since 2021.

On the whole, Lemma believes the factories wanted to stay open, which shows the resilience and true long-term potential of Ethiopia's garment sector.  

Remarkably, some garment manufacturers are still working with the US market despite the extra costs of not having the AGOA advantage. Lemma suggests these companies have successfully mastered efficiencies such as discounts on transportation to make exporting to the US a profitable endeavour.  

Arguably, the big lesson Ethiopia has learned after all this is not to rely on one market and one trade agreement, such as AGOA.

It is the same lesson fashion retailers and brands learned during the Covid-19 pandemic, when supply chain issues were rife. Diversification is key at both ends of the supply chain spectrum.

Pros and cons of exporting to Europe

There are still plenty of opportunities for Ethiopia's garment sector, however Lemma accepts: "Adapting to the European market and fast fashion will require adjusting lines and having more agility, which takes time."

He continues that styles and volume are different for European fashion brands and retailers so this is a challenge for its supply chain.

The French sporting brand Decathlon is namedropped as already sourcing from Ethiopia along with French department store Monoprix, which Lemma says shows the country does have some experience with the European market, but it's still at an infant stage from a scale point of view.  

Just Style spoke to a number of Ethiopia garment suppliers while wandering around the responsible global fashion supplier trade show. Many of them were quick to cite Europe as their new target market.

JP Textile Ethiopia's general manager Dick Sun noted that the UK announced duty-free benefits for Ethiopia last year, which is why he was keen to be at the London-based show.

However, Desta Garments PLC's general manager Eyob Bekele points out that Europe and the UK offer Ethiopia the same duty-free benefits as their Asian suppliers, so he views the likes of Bangladesh and Pakistan as real competition.

Bekele acknowledges that Ethiopia doesn’t have as much vertical sourcing, which makes it a challenge as Ethiopia has to buy materials from Asia, while also competing with the sourcing major continent on export price for its ready-made garments. 

There is development in Ethiopia's cotton farms and companies are looking into backward integration in terms of developing the fabric, but it has to be sustainable, Bekele adds.

Lemma hopes verticality will be on the horizon for Ethiopia in the not too distant future. He stated: "We would love to see fabric mills and a ginning capacity. We also want our garment hub to be a leader in Africa. I hope in three or four years we will be a leader at least in sub-Saharan Africa".  

For Bekele, sustainability is key as he points out that Europe in particular is looking for more sustainable options and higher quality fabrics.

Plus, he agrees with Lemma that the US' consumer power is much bigger than Europe so his factory was not set up for the smaller volumes European brands and retailers are now requesting.

Demka Group's managing director Ayhan Demir explains his Turkish company opened an Ethiopia factory eight years ago. AGOA was a "big disappointment" and is the reason why his company has now "turned its face to Europe and the UK".

Demir shares UK retailers Matalan and Primark currently work with Demka Group's factory in Türkiye, but given the impact of the Red Sea crisis, he is hopeful the Ethiopia factory could become an attractive proposition for them moving forward.

Sumbiri Hela Intimate Apparel's general manager Ravi Jaya Thilaka also points out that Ethiopia is already producing highly technical garment products.

He says his company has the first bra factory in East Africa which involves using high tech machinery. His factory has 3,000 employees and he is proud to say the workforce is trained and has a willingness to learn with potential for them to improve.

Will Africa be Ethiopia's next big opportunity?

Lemma describes Africa's consumer market as a real growth opportunity, but he notes you can't put a timeline on it as the free trade agreement for Ethiopia is not yet in operation.

He is referring to the African Continental Free Trade Area agreement (AfCFTA), which aims to create the largest free trade area in the world measured by the number of countries participating.

Ethiopia is yet to commence its trial but it is said to be making preparations with a view to diversifying its export products.

Bekele believes that once the trade agreement is in operation the duty-free benefits will give Ethiopia a big opportunity. He notes volume is also substantial in Africa but affordability has to be a key part of any African consumer push.

For Bekele, another arguably missed opportunity to date that would prevent both the amount of excess garment waste that enters the region as well as the chance to boosts Ethiopia's sourcing potential locally is for global fashion brands and retailers to open stores in the continent.

Bekele believes there is demand for it as many Africans currently buy branded products when they travel to Europe so he asks: "Why are chains not opening in Africa?"

Hirdaramani Apparel's group marketing consultant Tharumal Wijesinghe agrees that Africa's potential is "huge".

He maintains it is beneficial for his multinational company to stay in Ethiopia as it gives European fashion brands and retailers the chance to expand their sourcing in the region for the time being.

However, like so many of the other Ethiopian garment manufacturers exhibiting at Source Fashion, Wijesinghe has still got his fingers (and toes) crossed for AGOA and its huge US consumer market returning in the near future.

South Africa has been conducting a high-wire act in its relations with the United States (US). It is maintaining friendships with Washington’s enemies like Russia, Iran and China while trying to avoid disrupting its economic relations with America.

Tensions came closer than ever to breaking point this month as the US House of Representatives’ Committee on Foreign Affairs passed the US-South Africa Bilateral Relations Review Bill (US-SA Bill). The law would require the government to comprehensively review its relations with South Africa.

While the committee debated the bill, South Africa’s Minister of International Relations and Cooperation Naledi Pandor was in the US to persuade officials and legislators ‘to rethink any intention to execute punitive measures of any kind towards our country.’

The US-SA Bill follows other hostile congressional initiatives, including House Resolution 145 of February 2023, which also called for a review of US-South Africa relations, and the African Growth and Opportunity Act (AGOA) Renewal Bill of 2023. This demanded a review of South Africa’s participation in AGOA, which is up for renewal next year.

In essence, the animus in Congress towards Pretoria, mainly from Republicans but also some conservative Democrats, is inspired by their contention that, as the US-SA Bill says, ‘The [African National Congress’] foreign policy actions have long ceased to reflect its stated stance of non-alignment, and now directly favour [China], the Russian Federation, and Hamas, a known proxy of Iran, and thereby undermine United States national security and foreign policy interests.’

The bill, if passed, would require the US administration to report to Congress on its review of US-South Africa relations and state explicitly ‘whether South Africa has engaged in activities that undermine United States national security or foreign policy interests.’ A finding that Pretoria has undermined those US interests would almost certainly sink South Africa’s further participation in AGOA.

The US’ problem with Russia, as the US-SA Act details, includes South Africa’s decision to allow the US-sanctioned Russian cargo ship Lady R to dock in the Simon’s Town naval base and transfer arms in December 2022. There is also the joint naval exercise South Africa conducted with Russia and China in February 2023, on the first anniversary of the Ukraine invasion.

Issues with China include establishing the private Test Flying Academy in South Africa, which the US says recruits ex-American and North Atlantic Treaty Organization pilots to train Chinese pilots, among others.

Things started calming down last year, especially after South Africa’s President Cyril Ramaphosa led the African peace mission to Ukraine and Russia, and Pretoria participated in the Ukraine Peace Formula talks.

But that changed when Hamas attacked Israel on 7 October 2023, killing about 1 200 and taking some 250 hostages, followed by Israel’s massive counter-attack on Gaza, which has killed roughly 30 000 people so far. South Africa accused Israel of genocide at the International Court of Justice (ICJ), and in its January provisional ruling, the court ordered Israel to prevent genocide.

This move by South Africa more than anything else provoked Republican Congressman John James and Democratic Congressman Jared Moskowitz to table the US-SA Bill, which will now be debated in the full house.

In the foreign affairs committee debate last week, James called South Africa’s ICJ charge against Israel ‘politically motivated and grossly unfounded.’ He said the government ‘has displayed consistent and overt anti-Israel sentiment,’ citing the ICJ case, Pandor’s phone call with Hamas, and her meeting in Iran with President Ebrahim Raisi shortly after the Hamas attacks, as evidence.

Pretoria has been unapologetic about its position on Israel and Gaza. A week before leaving for the US to try to salvage relations and AGOA, Pandor urged pro-Palestinian activists to demonstrate outside the embassies of Israel’s five main allies. This was something of a high-wire act: to encourage protests at the US embassy one week, and visit the US the next to ‘affirm the very positive relationship between South Africa and the United States.’

As far as one could tell, Pandor’s mission didn’t go too well. She seems not to have met all the US officials or legislators she should have. At the Carnegie Endowment for International Peace, she dismissed a characterisation of Iran as an ‘authoritarian’ regime, which further annoyed South African detractors.

‘Certainly, the passage of the James Bill was foreseeable, and its sponsors were unlikely to be swayed by a last-minute appeal by the Foreign Minister, especially two months before South Africa’s national election,’ Anthony Carroll, retired adjunct professor at Johns Hopkins University, told ISS Today.

‘However, it should be pointed out that while US-South Africa have weathered storms in the past, including ARMSCOR, medicine control legislation, AIDS denialism, the Libya invasion and chicken trade disputes, the expanding influence of Russia and Iran in South Africa’s domestic and international affairs has deepened Washington’s concerns.’

Nevertheless, in his latest weekly letter to the nation, Ramaphosa said, ‘Our relationship with the US is characterised by mutual respect and a willingness to engage in constructive dialogue even on issues where we may differ.’

It’s true that the Biden administration and most Democrats still value the relationship with South Africa, even if they don’t always like Pretoria’s foreign policy positions. This was noted by Gregory Meeks, the senior Democrat on the House foreign affairs committee, in the debate on the bill last week.

Opposing the bill, he said: ‘South Africa is a key partner of the United States in good matters of both global and regional consequence,’ adding that South Africa had been critical in driving innovation, investment and trade in Africa. Meeks recalled that Biden’s sub-Saharan Africa strategy had stressed that ‘It is impossible to meet today’s defining challenges without Africa’s contribution and leadership,’ suggesting that relations with South Africa were critical in that endeavour.

The Biden administration evidently fears that alienating South Africa could drive it further into the Russia-China camp. And most observers in Washington don’t think the US-SA Bill will become law, perhaps because the more sober-minded and Democrat-controlled, Senate won’t take it up. As long as Biden is in office, it’s likely that for the reasons cited by Meeks and others, the US government will hold the line on relations with South Africa, even if that line stretches taut at times.

The worrying prospect for South Africa, though, is that if Donald Trump wins the November election, then all bets will be off, and the hostility evident in James’ bill could be transplanted to the White House.

The fourth edition of the regional American Chamber of Commerce Kenya (AmCham) Business Summit, the premier platform for strengthening bilateral trade and investment between the United States, Kenya, and East Africa is set to be held on April 24–25, 2024, in Nairobi, Kenya.

Kenya’s President William Ruto is confirmed as Chief Guest, leading a government delegation to the summit that aims to expand commercial opportunities and markets. Several high-ranking US government officials are also expected. Close to 1,000 delegates, including business and government delegations from the US and across the East African region are expected to attend.

AmCham’s Board President, Mr Peter Ngahu highlighted that the Summit would explore opportunities to promote sustainable and inclusive growth while increasing investment in Kenya and the East African region.

“As we celebrate years of shared value and interests, the AmCham Business Summit stands as a beacon of opportunity. We look forward to exploring how we can leverage these opportunities as we stay committed to helping drive investments in East Africa.”

Encouraging delegates to secure their attendance, AmCham’s CEO Maxwell Okello said, “The summit provides a platform to explore the vast trade and investment opportunities that lie ahead, fostering economic growth and prosperity across our region. We are delighted to convene the business community to chart the course towards strengthened cooperation in critical spheres such as trade and investment, technology, sustainability, healthcare, and economic growth, all while nurturing meaningful connections between businesses and nations.”

A wide range of topics critical to the region’s economic development, including shaping the future of US-East Africa trade and investment, climate action, digital transformation, and sustainable finance for East African economies, will be covered in a series of panel discussions, keynotes, and roundtables moderated by experts from the public and private sectors. 

East African economies are expected to register the highest regional economic performance on the continent, with growth figures at over 5 percent, according to the African Development Bank’s East Africa Economic Outlook.

Despite anticipated growth, East African economies continue to grapple with persistent barriers to trade and investment, including illicit trade, counterfeits, currency volatility, and inflation, impeding the region’s business landscape.

In 2022, the United States emerged as Kenya’s largest export market, with approximately $890 million in goods exported to the U.S. Additionally, the U.S. exported around $600 million in goods to Kenya, indicative of a fairly balanced trade relationship that is expected to increase as the United States and Kenya negotiate a first-of-its-kind bilateral trade agreement between the United States and a sub-Saharan African country known as the Strategic Trade and Investment Partnership.

As Prepared for Delivery in Johannesburg, South Africa

Thank you for the warm welcome. I want to express my gratitude to Consul General Spera and the American Chamber of Commerce for hosting me. I am honored to be joined today by South African Entrepreneurs that are building companies to unlock the economic potential of their country. 

I owe my own presence here today to the inspiration I drew from South Africa. In the middle of the night nearly 35 years ago, I was shaken awake by my father, asking me to follow him. Entering the sitting room, I found the television already on. Instead of sitting down, my father just stood in front of our small television watching a scene I did not understand. 

There were people who looked like me screaming, shouting, and waving flags. As these people shouted with joy, I turned to see my father crying for the first time in my life. Back then, I had no idea that this moment would be etched into my memory, helping to inspire my interest in public service. 

As South Africans know far better than anyone, the significance of what happened on February 11, 1990, extended far beyond the confines of my sitting room and reverberated far beyond South Africa. Nelson Mandela’s release from prison became more than just a historic event; it became a defining chapter in the collective narrative of the anti-apartheid struggle for South Africans and in the global fight for civil rights. To my father, Mandela's release was more than a political victory; it was a testament to the resilience and spirit of a people who yearned for change. 

South Africa and the United States have both come a long way from that day. We have seen progress and setbacks, but through it all we have maintained our strong belief in the democratic values that inspired our civil rights movement and your fight against apartheid. We now are countries where the right to democracy is extended to all our citizens. The promise of our democracies is that economic opportunity will not just be for the wealthy and well-connected, but for all of our people. My view is that forging a deeper economic relationship between our two countries is critical to extending opportunity to those who have been left out and left behind for far too long.  

At the core of our economic relationship is the connection between our people, with thousands of South Africans living in America as well as thousands of Americans that call South Africa home. An important facilitator of our economic relationship is the African Growth and Opportunity Act (AGOA), a cornerstone that provides African companies and workers from 32 countries duty-free access to our market for more than 7,000 products. 

South Africa has consistently been among the top beneficiaries of this arrangement. Because of AGOA, over $3 billion of South African exports to the United States entered duty free last year. This benefit represents the American commitment to a strong economic relationship with South Africa, and to economic integration with other countries in Africa as well.  President Biden has urged the U.S. Congress to renew AGOA—showing support not merely for a trade agreement but for our close partnership with companies and people in Africa.

Today, as a partner invested in South Africa’s success, I would like to talk about three key areas to unlocking the economic potential of the South African economy: (1) reliable power; (2) deepening South Africa’s connection to the global economy, especially the clean energy supply chain; and (3) stemming the tide of corruption. 

No country’s economy can succeed without keeping the lights on. South Africans should not have to rely on an app to determine if they can prepare a meal for their families nor should your businesses be forced to spend thousands of dollars on generators. South Africa has the resources to generate reliable power for its citizens. 

What I have heard from South Africans is that keeping the lights on is not a question of capacity, it is a question of political will to make the decisions necessary to modernize the grid and enable new generation sources to come online. Allowing for more renewable energy development is a sustainable and cost-effective means of helping to end the electricity crisis. The United States recognizes the scale of the challenge and, along with the other parties in the Just Energy Transition Partnership (JETP), stands ready to provide South Africa with financial resources and technical assistance to jumpstart the energy transition and solve the energy crisis. 

Two years into this first-of-its-kind JETP model, South Africa has made important progress on implementing policies that open power generation to private sector investment, resulting in 66 gigawatts of renewable energy projects at various stages of development. If unlocked with transmission investments, this pipeline would be more than enough to end loadshedding and meet South Africa’s air pollution and climate goals. The multilateral development banks also have a strong role to play here, and we were pleased to support a nearly $2 billion financing package to South Africa that includes development policy loans from the World Bank and African Development Bank, and our partnership is ready to provide more than $9 billion of financial assistance.

The United States is also committed to South Africa’s mission of ensuring that the energy transition must be a “Just” one. To that end, we increased our grant commitment by $45 million in 2022 to support job training programs in the coal-intensive Mpumalanga region.  To further demonstrate our support, Secretary Yellen visited Mpumalanga last January to talk to workers and communities about their challenges and aspirations. 

The transition to clean energy should create jobs and economic opportunity for South Africa. Many of the minerals that are core to this transition can be found here, making it essential for companies to extract them responsibly. Given the global need for these minerals, the clean energy supply chain should create significant jobs for South Africans.  

But this industry will not thrive unless there are the right economic incentives for companies to invest in extraction. The history of mining and many other industries in South Africa are colored by racism. But in order to afford the cost of addressing the legacy of racism, South Africa needs the wealth and opportunity this sector can bring to the country.  This can and must be done in a way in which the benefits of investments in this sector are not concentrated in the hands of a few.

As the world demands more minerals to drive this transition, it can create more opportunities to make sure gains are equitably shared with all South Africans. We are committed to working with South Africa to build a clean energy supply chains that invests in workers and protects the environment. 

But to unlock the full potential of South Africa’s rich resources, South Africa needs to implement policies that will allow its diverse service sector to thrive. The United States is making investments to help grow South Africa’s diversified economy. For example, the American Development Finance Corporation supported the Africa Data Centres project which is bringing 35 megawatts of capacity to South Africa, creating hundreds of construction jobs, and  helping to provide the digital infrastructure needed for the growing IT and fintech sectors, as well as other sectors of the economy.   

Investments alone cannot unlock the potential of your economy. My conversations with South Africans from a diversity of backgrounds makes clear that progress on reliable energy and addressing all the other challenges this great country faces is inhibited by corruption. Corruption is a tax the rich and powerful put on everyone else. We think about this a lot in the United States; in fact, my department just released our National Risk Assessment on Money Laundering, which highlights the costs of corruption in our country and how we can work to end it. No nation is immune from these challenges. We humbly want to be your partner as the South African people take steps to address corruption. Last year, the U.S. and South Africa launched an effort to marshal our collective resources towards the fight against illicit wildlife trafficking, a trade fueled by corruption and organized crime. We want to build upon this work to leverage international frameworks to combat corruption and promote transparency in various sectors, ensuring that resources are allocated efficiently for the benefit of all citizens.

As you know, a focus on combatting corruption creates a positive environment for job creation in South Africa. South Africa’s greatest resource is the creativity and ingenuity of its people. An unemployment rate of 43 percent among people under 35 years of age means this country’s greatest resource is being underutilized. I know from employers that the challenges of the education system often leave young people unprepared for the labor market. On Thursday, I’m looking forward to visiting the Harambee Youth Employment Accelerator to discuss job readiness and the entrepreneurship landscape for young South Africans. This ecosystem is teeming with ideas and talented people.

At the core of any democracy must be a commitment to providing economic opportunity for its citizens. It is what the South African people deserve, and we want to be your partner in unlocking that economic opportunity. I believe there is great promise in our economic relationship because it is not built just on transactional value or out of necessity. It is instead grounded in our shared values—democracy, equality, and respect for human rights—values that form the bedrock of both our nations. 

That is why Bobby Kennedy could speak to the ripples of hope and inspire young people from Soweto to students in Cape Town, just as Mandela’s unyielding march for freedom could change the life of a young boy in Southern California and university students across America.  

That is also why we can engage in robust debates, often on fundamental questions. It is through these conversations, arguments, and collaborative efforts that we refine our ideas and make informed decisions. In these moments, when we can be honest with each other and work together to find collective solutions, our partnership is truly tested and strengthened. 

And despite the real differences our countries often have, there is so much more that ties us together. It is our values, our hopes, and our desire to promote economic opportunity for all our citizens. For the United States, Africa’s success and South Africa’s success will mean success for all of us.

The Office of the United States Trade Representative today released President Biden’s 2024 Trade Policy Agenda and 2023 Annual Report to Congress, which details USTR’s work to advance President Biden’s trade agenda. 

The President’s 2024 Trade Policy Agenda stands up for workers’ rights and sustainable trade practices, supports U.S. farmers, ranchers, fishers, and food manufacturers, bolsters supply chain resilience, addresses unfair policies and practices, and advances inclusive, durable trade policy through expanded engagement.    
 
“Trade is an integral part of our Administration’s vision to fundamentally shift our economic policies to focus on strengthening our middle class and working communities,” Ambassador Katherine Tai said.  

“The 2024 Trade Policy Agenda and 2023 Annual Report include key accomplishments and priorities to realize this vision.  We are creating new and innovative trade arrangements with our allies and partners, enforcing existing ones, and bringing more diverse voices to the table—to drive inclusive economic growth for more people across our society.”
 
USTR is implementing the Biden-Harris Administration’s economic vision by negotiating historic trade arrangements with our allies and partners: 

• U.S.-Taiwan 21^st Century Trade Initiative: In June 2023, the United States and Taiwan, under the auspices of the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the United States (TECRO), signed the first agreement under the Initiative, which includes high-standard commitments and economically meaningful outcomes in a number of areas.  The United States and Taiwan, under the auspices of AIT and TECRO, will continue negotiating a second agreement covering other economically significant areas.

• U.S.-Kenya Strategic Trade and Investment Partnership: Since launching negotiations in July 2022, the United States and Kenya are continuing discussions on high-standard commitments in a wide range of areas with a view to increasing investment; promoting sustainable and inclusive economic growth; benefiting workers, consumers, and businesses (including micro-, small, and medium-sized enterprises (MSMEs); and supporting African regional economic integration.

• The Indo-Pacific Economic Framework for Prosperity: The United States and our IPEF partners have made considerable and substantial progress on several chapters of the Trade Pillar.  USTR is fully committed to continuing this work to advance our shared vision for a high-standard agreement under the Trade Pillar. 

• Americas Partnership for Economic Prosperity: The United States is working with other founding members to enhance economic cooperation in our hemisphere and drive inclusive, people-centered economic growth.  Building on the Leaders’ Summit of the Americas Partnership in November 2023, USTR is working closely with our partners to establish a Council on Trade and Competitiveness, which will meet regularly to implement the guidance with respect to trade matters in the East Room Declaration of the Leaders of the Americas Partnership.

Under Ambassador Tai’s leadership, USTR is delivering important wins for domestic agricultural stakeholders, including farmers, producers, and processors, as U.S. agricultural exports totaled $181 billion in 2023.

Through the United States – Mexico – Canada Agreement (USMCA), USTR is empowering workers and defending the interests of U.S. energy and agricultural producers.  This includes using the USMCA’s Rapid Response Mechanism to bring tangible benefits to workers, including higher wages, safer working conditions, and reinstatement and backpay to those who were terminated for participating in union activity. 

In line with the Biden-Harris Administration’s goal of creating economic prosperity for all, USTR is taking unprecedented steps to promote equitable, inclusive, and durable trade policy.  This includes hosting first-ever minister-level dialogues with labor and Indigenous leaders during the U.S. host year for the Asia-Pacific Economic Cooperation (APEC).

At the World Trade Organization (WTO), building on the progress made at the Thirteenth Ministerial Conference, Ambassador Tai is working with other WTO Members to reform the organization to restore transparency, rebuild its ability to address emerging challenges, and make the dispute settlement system more effective.

USTR will continue to deliver for U.S. workers and businesses, and for a global trading system that is more resilient, sustainable and equitable.  

Background:

The 2024 Trade Policy Agenda and 2023 Annual Report of the President of the United States on the Trade Agreements Program are submitted to the Congress pursuant to Section 163 of the Trade Act of 1974, as amended.

Download the report HERE

President William Ruto will visit the United States on a State Visit in May during what is likely to be one of the most turbulent US elections in memory. Barring some miracle, or catastrophe, the US presidential election will be a showdown between the same two contenders—albeit older and less energetic—as in 2020.

The US presidential election in November is the most significant geopolitical risk event of 2024.

Its outcome could result in a dramatic change in US foreign and domestic policy. These policy changes, assuming former president Donald Trump wins again, would almost certainly change the immediate fortunes of actors across the world including flashpoints like Russia-Ukraine War, securitization of the Red Sea corridor, and the Taiwan Straight or the European Union policy, NATO, and, closer to home, US commitments across Africa.

Maybe those changes are good. Maybe those changes are bad. But when Ruto steps off the plane in Washington, DC he will be in the centre of a monumental national moment in America. This political context will need to shape his and the Ministry of Foreign Affair’s long-term planning if, for no other reason, the approximately 50/50 chance that most key US officials they meet will be unemployed this year.

As I have said many times before in other forums: there is no country in Africa which has had as good of a relationship with the US for as long as Kenya. The ties are so special that America’s first black president is the son of a Kenyan. Those realities are the momentum which will keep these two nations together as partners. 

That reality is also the currency that Ruto needs to leverage during his DC visit. The US needs a partner like Kenya on the continent and Kenya can latch some of its boundless capabilities to this relationship to unlock the next stage of its economic development.

As significant as pageantry and power aesthetics are to State Visits, Ruto and his team must leverage these presidential moments into deepening diplomatic and trade ties with US officials two and three levels below the White House. To achieve this, Ruto’s delegation and entourage must have access to senior career policymakers most likely to survive a regime transition and be well-briefed on how to advance Kenya’s strategic national priorities during this red-carpet moment. 

State Visits create an enormous amount of buzz—especially in election years. Often there are plenty of unofficial side events that carry on the State Visit themes which Kenya must also leverage to its advantage to explore or deepen commercial ties. These unofficial side events have been abused by other African governments who fill planes with hangers-on, dilettantes, distant relatives, or other leeches who throng shopping malls rather than advance national interests.

Ruto and his entourage would be wise to use of unofficial events to signal the aptitude of Kenyan diplomacy, talent, and business acumen. 

So many governments miss or squander opportunities to leverage side events organized by think tanks, big banks, NGOs, diaspora communities, co-working spaces, business councils, trade boards, universities, or the plethora of other interest groups that operate in the US. All these forums present opportunities for the Ruto government to officially or unofficially advance its vision for Kenya, the African continent, and their role in the world. And every one of these opportunities can be expected to exist beyond the life of the Biden administration.

These unofficial side events should also include finding ways to engage with former or future Trump officials. Obviously due to US laws on foreign influence, as well as not looking bad in front of the Democratic administration, this would need to be handled with care.

But the outcome is simple: make sure there are friendly lines of communication open in case Trump wins in November. Afterall, it was under the Trump administration that the Kenya Free Trade Agreement, which was expected to be the largest free trade deal with an African country, almost came into life. This initiative ended when Trump lost the 2020 election.

American political uncertainty presents the opportunity for Ruto’s administration to focus relationship-building in US institutions and across civic forums to achieve long term priorities. The well-choreographed agreements, commitments, and meetings emanating from the White House are also win-themes for Ruto upon his return home, but Kenya must take a more multi-dimensional view of this trip beyond the planned giveaways.

South African President Cyril Ramaphosa today, 21 February 2024, received for a visit from a bipartisan congressional delegation from the United States of America, in Tuynhuys, Cape Town. The delegation is visiting South Africa at the invitation of the Aspen Institute.

The President and the US congressional delegation discussed the importance of the relationship between South Africa and the US, which manifests in strong economic, political and social ties.

“Our relationship is characterised by mutual respect and a willingness to engage in constructive dialogue even on issues where we may differ,” said President Ramaphosa.

The President further highlighted the support that the US has provided to South Africa over the years in the fight against HIV and AIDS. The PEPFAR programme has contributed significantly – and continues to contribute – to the remarkable progress South Africa has made to end HIV as a public health emergency.

President Ramaphosa emphasised the strength of bilateral relations as evidenced through several meetings and calls he has had with President Biden, official engagements between South African and US delegations which has allowed for a constructive exchange of views and further cemented the ties between the two countries.

The engagement also covered South Africa’s economic opportunities with a focus on the expansion of trade and investment ties. The African Growth and Opportunity Act (AGOA) continues to present significant value to Africa’s industrialisation, integration and the diversification of the continent’s economies. AGOA provides a platform for US investors to participate in the opportunities presented by the African Continental Free Trade Area (AFCTA).

On international relations, President Ramaphosa underscored South Africa’s commitment to promoting peace, security and development on the African continent and across the world. This includes South Africa’s non-aligned position that seeks to forge cordial relations with all countries and promote the resolution of conflict through dialogue.

The President emphasised the need for an inclusive negotiated settlement of the Israel-Palestinian conflict, and South Africa’s support for the legitimate aspirations of Palestinians to self-determination and statehood and of Israelis to peace and security. 

“We continue to make the call for the release of hostages, an immediate ceasefire and the urgent provision of humanitarian aid to the people of Gaza and meaningful negotiations towards a lasting solution,” said President Ramaphosa.

President Ramaphosa congratulated the delegation for the upcoming celebration of 250th anniversary of the US Declaration of Independence in July 2026 as South Africa marks 30 years of freedom and democracy.

President Joe Biden plans to welcome Kenyan President William Ruto to the White House in May, hosting a state visit after reneging on his promise to visit Africa last year.

White House press secretary Karine Jean-Pierre said Friday that the visit set for May 23 will mark the 60th anniversary of U.S.-Kenya diplomatic relations and "celebrate a partnership that is delivering for the people" of both countries while affirming "our strategic partnership" with Ruto's country.

It "will strengthen our shared commitment to advance peace and security, expand our economic ties, and stand together in defense of democratic values," Jean-Pierre said in a statement. "The leaders will discuss ways to bolster our cooperation in areas including people-to-people ties, trade and investment, technological innovation, climate and clean energy, health, and security."

Word of Ruto's visit comes after Haiti announced this week that it is working on an official agreement with Kenyan officials to secure the long-awaited deployment of Kenyan police forces there. High-ranking officials from both countries recently met in the U.S. for three days to draft a memorandum of understanding and set a deadline for the arrival of forces in Haiti from the east African country.

Jean-Pierre added Friday that, beyond Kenya, Ruto's visit to Washington will "further the vision" that "African leadership is essential to addressing global priorities."

First lady Jill Biden traveled to Kenya last February during a five-day, two-country tour of the continent. The White House also confirmed that both Ruto and Kenyan first lady Rachel Ruto will be honored with a dinner with the Bidens.

The White House hosted a state dinner celebrating close ally Australia in October, which followed the president's skipping a stop in that country earlier in 2023 to focus on debt limit talks in Washington. But those festivities last fall were toned down some given Israel's ongoing war with Hamas.

Biden said in December 2022 that he would visit sub-Saharan Africa the following year, which would have made him the first U.S. president to travel there in a decade. The president pledged at the end of a U.S.-Africa Leaders Summit in Washington with 49 leaders, in which he suggested the continent would be a strategic focus as the U.S. made political and financial commitments.

But other priorities interceded in 2023. Biden pulled off last-minute trips to Israel and Vietnam, as well as a secretive journey to Ukraine. He ended last year by skipping a December U.N. climate change conference in Dubai, while sending Vice President Kamala Harris in his place, and never scheduled an Africa trip.

Biden is now seeking reelection in November's election while juggling a host of pressing foreign security matters, including the Israel-Hamas war and continuing discussion in Congress over proposed foreign aid for Ukraine amid its war with Russia.

On Friday he traveled to East Palestine, Ohio, making good on months of saying he'd visit the site of a Norfolk Southern train derailment that spilled a cocktail of hazardous chemicals and caught fire in February 2023.

Vice President Kamala also spoke Friday at the Munich Security Conference and was asked about Washington's "growing transitional mindset" toward Africa — a characterization she disputed, countering that "the future has to be about partnership and investment."

"I believe that we must think differently about the relationship between the United States and the continent of Africa," the vice president said, adding, "We look at the future of the continent and how it will affect the world: It is indisputable. There will be a direct impact."

Harris noted that the median age on the African continent is 19 and that population growth means that, in the coming decades, as many as 1 in 4 people in the world will live there.

"In terms of the future, we must see the innovation that is currently happening there and partner with African leaders and nations," she said. "And change the way we are thinking, in a way that is not about aid, but about partnership. Not what we do for the continent, but what we do with the continent and its leaders."

A Civil Society Organisation, Network and other stakeholders from across the United States and African Growth and Opportunity Act-eligible countries have petitioned the President of the United States of America, Joe Biden, to consider an extension of the initiative.

The CSO made the plea in a letter dated February 16, 2024, titled ‘Petition for Timely Re-Authorisation and Enhancement of the African Growth and Opportunity Act Beyond 2025.’

They noted that AGOA had played an integral role in creating sustainable economic growth and development, poverty reduction, democracy, the rule of law, and stability in Sub-Saharan Africa and created 120,000 jobs in the United States and about one million direct and indirect positions across Sub-Saharan Africa.

The CSO added that renewing and enhancing the AGOA would help increase exports, create new jobs, and alleviate the suffering of the underprivileged due to current currency fluctuations and inflation across the region.

The letter read in part, “We, the undersigned members of the AGOA Civil Society Organisation Network and other stakeholders from across the United States and AGOA-eligible countries, committed to sustained US-Sub-Saharan Africa trade and economic cooperation hereby petition for your support for the timely re-authorisation/extension and enhancement of the African Growth and Opportunity Act by the 118th Congress.”

According to the stakeholders, it is in the interest of the United States to engage and compete in emerging markets in Sub-Saharan African countries and to use the renewal of AGOA beyond 2025 to address underutilisation of AGOA benefits and reverse the decline of AGOA imports from $78.01bn in 2013 to $28.19bn in 2022.

They argued that fostering strong commercial and political ties with Sub-Saharan Africa can only enhance the long-term economic security of the United States since the region is a substantial consumption hub of the future and one of the fastest-growing economies in the world.

In 2002, 2004, and 2006, with bi-partisan support, Congress passed, and the Executive Branch implemented legislative enhancements of AGOA. In 2015, Congress passed the Trade Preferences Extension Act, updating and extending the program to September 30, 2025.

AGOA trade preference benefits continue to help lower the cost of trade, encourage investment in the region, and help create valuable opportunities for US businesses, workers, and consumers.

AGOA has played an integral role in creating sustainable economic growth and development, poverty reduction, democracy, the rule of law, and stability in Sub-Saharan Africa and helped create 120,000 jobs in the United States and about one million direct and indirect positions across Sub-Saharan Africa.

US total goods imports under AGOA totalled $6.7bn in 2021 compared to $8.4bn in 2019. This decline was the result of the lower value of oil imports. However, non-oil imports under AGOA, a key source of new investment and jobs, increased to $4.8bn in 2021 from $3.8bn in 2019. South Africa (the largest non-oil AGOA beneficiary) has exported the widest selection of products under AGOA, ranging from passenger vehicles to citrus products, yachts, and frozen sorbet. Today, only 32 of 49 Sub-Saharan countries are eligible for AGOA benefits.

The time has come for young emaSwati entrepreneurs to seize opportunities to manufacture basic every day consumer products for export to the US under the African Growth and Opportunity Act (AGOA).

The main drive is to get emaSwati to manufacture products locally, sell locally, regionally and internationally using the various initiatives made available by government. 

Eswatini’s economy is at a crossroads. While the country boasts a strong manufacturing sector, diversification and export growth are crucial for sustainable development.

AGOA presents a unique opportunity for Eswatini’s small and medium-sized enterprises (SMEs) to tap into the vast US market for manufactured goods.

I have asked Allan-Lloyd Junior Hamusokwe, Head Researcher at the Youth Chamber of Commerce and Industries (YCCIE) - Eswatini, to delve into the potential of AGOA for Eswatini’s SMEs, introduce the YCCIE 2024 SME Start-Up Tool Kit, and emphasise the importance of value chain development for risk reduction, profit maximisation and sustainable success.

This article has been presented by him to try and give us as much information as possible on this topic. 

Manufactured goods landscape

Eswatini’s manufacturing sector significantly contributes to the economy, accounting for around 30 per cent of GDP and employing over 20 per cent of the workforce. The sector is dominated by textiles and apparel, with exports exceeding US$1 billion annually. However, diversification is essential for long-term growth.

Current exports and AGOA’s potential

Eswatini’s current manufactured goods exports to the US under AGOA primarily comprise: Textiles and apparel: Cotton yarn, fabric and finished garments benefit from duty-free access under AGOA. [  AGOA.info note: Click on the table link in the Eswatini section for a breakdown of exports under AGOA]

* Wood and wood products: Furniture, doors and processed wood products offer export potential.
* Agro-processed products: Canned fruits, jams and beverages present opportunities for value-added exports.AGOA opens doors for further diversification:* Metal products: The National Development Plan (NDP) envisions expansion beyond mining, with potential for steel fabrication, wire products and light engineering.
* Electronics and light assembly: Government seeks to attract foreign direct investment in electronics manufacturing, creating opportunities for SMEs in light assembly.
* Plastics: Existing plastic injection molding and extrusion plants can expand production for export.
* Advanced textiles: Technical textiles and non-woven fabrics hold promise, as highlighted in the NDP.

Manufactured goods exports statistics

The International Trade Centre (ITC) reports that Eswatini’s exports of manufactured goods to the US under AGOA reached US$137 million in 2021 [  AGOA.info note: According to the ITC, Eswatini's exports to the US in 2021 were valued at $18m, with the majority comprising sugar - while apparel exports accounted for a relatively small share of the total. For a breakdown of sectoral exports to the US, see the table here], with textiles and apparel accounted for the majority.

However, the growth potential is significant. The AGOA market for apparel alone is estimated at US$19.6 billion, with opportunities in other sectors like furniture, plastics and machinery. The country can effectively use light manufacturing to create jobs for the youth, earn foreign currency and create wealth for many young emaSwati who will choose to start these businesses. 

Empowering entrepreneurs

Recognising the challenges aspiring SMEs face, the YCCIE has developed the 2024 SME Start-Up Tool Kit. This comprehensive guide provides:

* Market research and feasibility analysis tools to identify viable opportunities in the US market under AGOA.
* Information on AGOA eligibility requirements and compliance procedures to navigate the trade agreement effectively.
* Guidance on value chain development to build strategic partnerships and reduce risks.
* Financial planning and resource mobilisation strategies to secure funding for business ventures.
* Mentorship and networking opportunities to connect with experienced entrepreneurs and industry experts.

Importance of value chain development for SMEs

Understanding and integrating into value chains is crucial for SME success in the export market. Value chain development involves:
* Identifying your niche within the manufacturing process (eg supplying raw materials, processing intermediate goods or assembling final products).
* Building strong relationships with other actors in the chain (eg suppliers, distributors and customers).
* Investing in quality control and certification to meet US standards.
* Continuously innovating and adapting to market trends and customer demands.

By adopting a value chain approach, SMEs can:
* Reduce risks by mitigating dependence on single buyers or suppliers.
* Increase profits by capturing a larger share of the value added in the production process.
* Improve efficiency through collaboration and knowledge sharing.
* Enhance sustainability by adopting responsible sourcing and production practices.

Conclusion

Eswatini’s SMEs have the potential to be major players in the export of manufactured goods to the US under AGOA. By leveraging the YCCIE 2024 SME Start-Up Tool Kit, understanding the importance of value chain development and capitalising on the opportunities presented by AGOA, Eswatini’s SMEs can contribute significantly to economic growth, job creation and sustainable development. 

The focus has been on AGOA for this article because it is an opportunity that emaSwati are not taking full advantage of. The reason might have been that they simply do not know much about the initiative, or they know but do not know how it can be accessed. 

The general feeling has been that AGOA is for big businesses and that access is very difficult. We need to have more information on how an ordinary liSwati can manufacture for international markets such as AGOA because the aim was to help ordinary Africans.

A bill has been submitted to the United States congress calling for a full review of the country’s bilateral relationship with South Africa following the International Court of Justice ruling that found it plausible that Israel has committed acts of genocide against Gaza.

The bipartisan bill which was introduced by US Republican congressman John James and Democratic Party congressman Jared Moskowitz this week could threaten South Africa’s prospects to benefit from the African Growth and Opportunity Act (AGOA). 

[ Download a copy of the Bill alongside ] 

The bill will still need to be discussed and passed by congress.

It states that not later than 30 days after the date of enactment of this Act, US President Joe Biden in consultation with the Secretary of State and the Secretary of Defense, shall certify to the appropriate congressional committees and release publicly an unclassified determination explicitly stating whether South Africa has engaged in activities that undermine United States national security or foreign policy interests.

It further states that the US government must provide an unclassified report submitted to the appropriate congressional committees justifying the determination upon its certificate.

US Embassy mission spokesperson David Feldmann declined to comment. The ANC and the government’s response will be added when received.

The bill accuses the ANC of acting inconsistent with its publicly stated policy of nonalignment in international affairs.

It states that the South African Government has a history of siding with malign actors, including Hamas and the Russian Federation.

The US congress bill argues that the South African government’s support of Hamas dates back to 1994, when the ANC first came into power, taking a hardline stance of consistently accusing Israel of practising apartheid.

The ANC and the South African government have however been known to have ties with the Palestine Liberation Organisation dating back to former president Nelson Mandela’s term in office.

“Following Hamas’ unprovoked and unprecedented horrendous attack on Israel on October 7, 2023, where Hamas terrorists killed and kidnapped hundreds of Israelis, members of the South African Government and leaders of the ANC have delivered a variety of anti-semitic and anti-Israel-related statements and actions,” it reads. 

The US congress states that some of the anti-semitic remarks include President Cyril Ramaphosa’s statements accusing Israel of genocide. 

It said that the anti-semitic statements also include International Relations and Cooperations Minister Naledi Pandor’s statement expressing concern about escalating violence, urging Israel’s restraint in response.

It adds that Pandor implicitly blamed Israel for provoking the attack through “continued illegal occupation of Palestine land, continued settlement expansion, desecration of the Al Aqsa Mosque and Christian holy sites, and ongoing oppression of the Palestinian people. 

It accused the ANC national spokesperson Mahlengi Bhengu-Motsiri of anti-semitic remarks after stating that the decision by Palestinians to respond to the brutality of the settler Israeli apartheid regime is unsurprising. 

“On December 29, 2023, South Africa filed a politically motivated suit in the International Court of Justice wrongfully accusing Israel of committing genocide. The South African Government has pursued increasingly close relations with the Russian Federation, which has been accused of perpetrating war crimes in Ukraine and indiscriminately undermines human rights. South Africa’s robust relationship with Russia spans the military and political space, including allowing a United States-sanctioned Russian cargo ship, the Lady R, to dock and transfer arms at a South African naval base in December 2022,” the bill stated. 

It also cites that South Africa dispatched multiple high-level official delegations to Russia to further political, intelligence, and military cooperation.

The congress bill states that South Africa and the ANC’s relationship with the Chinese government and its ruling Chinese Communist Party(CCP) – which is committing gross violations of human rights in the Xinjiang province and implementing economically coercive tactics around the globe – undermine South Africa’s democratic constitutional system of governance. 

These acts include what it says are ongoing ANC and CCP inter-party cooperation; recruitment of former United States and NATO fighter pilots to train Chinese People’s Liberation Army pilots at the Test Flying Academy of South Africa; South Africa’s hosting of 6 Chinese government-backed and CCP-linked Confucius Institutes; South Africa’s participation in a political training school in Tanzania funded by the Chinese Communist Party, cooperation with the Chinese global Belt and Road Initiative; and the widespread presence in South Africa’s media and technology sectors of PRC state linked firms. 

“The ANC-led South African Government has a history of substantially mismanaging a range of state resources and has often proven incapable of effectively delivering public services, threatening the South African people and the South African economy,” the bill stated. 

The bill accuses Ramaphosa of having declared the national state of disaster over the worsening energy crisis, “the worsening, multi-year power crisis caused by the ANC’s chronic mismanagement of the state owned power company Eskom, resulting from endemic, high-level corruption”. 

It states that the persistence of Transnet’s insufficient capacity, an on-going outbreak of cholera, a failure to provide clean water to households and rampant state capture are part of ANC governments mismanagement of the state.

Dirco spokesperson Clayson Monyela said that relations between the two countries are warm and mutually beneficial.

“We know for a fact that the USA government doesn’t share the views of the individuals behind this bill. We are confident that it won’t go anywhere. We continue to engage, share information, and cooperate with the USA at bilateral and multilateral fora to deepen the already strong ties between our two countries politically, economically, and work together to respond to global developments, ” he said.

The US plans to strengthen Kenya’s public procurement systems in what is seen as a strategy to put in place sound structures ahead of the planned trade pact.

This comes as talks on the Strategic Trade and Investment Partnership (STIP) resumed last week with a meeting in Nairobi.

Kenya is pushing for the deal and renewal of the African Growth and Opportunity Act (AGOA) which expires next year.

Washington in a statement on Tuesday said the US and Kenya held a productive in-person negotiating round under the STIP in Nairobi, between January 29-31.

Assistant United States Trade Representative (USTR) Constance Hamilton led the team that included officials from the US Department of State, the US Department of Agriculture, and the Food and Drug Administration.

“During the three-day negotiating round, the two sides primarily exchanged views on the most recent proposed texts that concern agriculture, good regulatory practices, and workers’ rights,” US Trade Representative Katherine Tai’s office said in a statement (see alongside).

They also discussed textual issues in the chapters on anticorruption; Micro- Small and Medium-sized enterprises, and services domestic regulation. 

The US has been pushing for transparent and competitive procurement in Kenya's public government.

It also wants effective protection of intellectual property rights, favourable sanitary and phytosanitary measure among other interests.

This, as it seeks to secure business for US companies and a comprehensive market access for agricultural goods in Kenya, by reducing or eliminating tariffs.

Kenya has since entered into a grant deal with the US securing approximately Sh198 million in technical assistance towards strengthening the country’s public procurement 

The grant is facilitated by the United States Trade and Development Agency (USTDA).

It aims at fortifying the value for money approach in public procurement through the development of a comprehensive procurement manual and guide for suppliers.

National Treasury Cabinet Secretary Njuguna Ndung’u and US Ambassador  Meg Whitman signed the deal at an event in Nairobi on Tuesday [see image]. 

Ndung’u welcomed the partnership and expressed optimism the grant would help in transforming public sector procurement.

The financial infusion, the CS said, would enable smarter, long-term investments, ultimately resulting in substantial savings for the government.

“The US is a key partner in trade and investment in Kenya. The two countries will continue fostering the long standing strengthened cooperation that exists,” he said.

According to the two, the collaboration will not only enhance Kenya's procurement practices but also solidifies the robust economic ties between the two countries, setting the stage for continued cooperation and mutual benefit.

The move points to procurement irregularities and corruption in government tenders, which have previously been flagged, with the Public Procurement Administrative Review Board halting a number of multi-billion tenders mainly in State agencies.

International firms have been keen on major tenders in the country’s energy sector, roads, ports, rail among others, with a number of tenders being slowed down by either court cases or intervention by the procurement watchdog, over irregularities.

Meanwhile, Kenya is seen to bank on the renewal of AGOA, in case a strategic deal is not sealed by next year, to ensure continuity in accessing the US market.

While negotiations for a trade pact began back in July 2020 during the Donald Trump and former President Uhuru Kenyatta tenures, administration changes in both countries following subsequent elections and the Covid-19 pandemic stalled the process.

On July 14, 2022, the two countries launched the STIP which is now being pursued by the US President Joe Bidden and President William Ruto’s administrations.

According to experts familiar with negotiations, it takes up to two years or more, to seal a comprehensive deal.

“It could even go beyond 2025 before all parties agree but the negotiators have agreed to expedite the process. With this in mind, it is safe to have the AGOA in place,” an official familiar with the process, told the Star.

Kenya has been trading with the US mainly through the AGOA programme since its inception in 2000.

AGOA is a unilateral trade preference programme that provides duty-free access to the US market for over 1,800 products exported from the Sub-Saharan Africa, that meet certain eligibility requirements.

In addition, AGOA beneficiaries receive duty-free access to the United States for more than 5,000 additional products under the Generalised System of Preference (GSP).

More than 70 percent of Kenya's exports to the US are duty-free under AGOA, mainly apparel. 

With a bilateral deal, Kenya is keen to tap at least five per cent of the US market, which has the potential to earn the country more than Sh2 trillion in export revenues annually.

According to Trade and Investments Cabinet Secretary Rebecca Miano, Kenya also continues to attract US firms keen to set up in the country, an indicator of growth potential in Foreign Direct Investments.

Africa’s biggest economy is still failing to tap the opportunities that the African Growth and Opportunity Act (AGOA) present to boost its foreign exchange, amid acute dollar shortages.

The AGOA has been on for over twenty-three years as it was enacted in 2020. In 2015, the program was modernised and extended to 2025, implying that there are only about 15 months before the window closes.

Some countries have taken advantage of the AGOA more than others, Kenya and Ghana have been identified as countries with worthy experiences to share from their trade interactions on the AGOA platform.

“Currently, Kenya exports about $900 million worth of products to the US, and on the converse, imports about $600 million,” said Isaac Otolo, advisory Partner, Transactions PwC based in Nairobi, but covering the East African region.

He added that “20,000-25,000 direct jobs have been created to take advantage of the AGOA opening and window, with over 100,000 indirect jobs.

“Kenya’s tea, coffee, and certain gemstones also go out through the window.”

AGOA, a US initiative essentially opened the window to allow for imports from Africa into the United States through a preferential window, but with the exports first meeting certain conditions, and according to Otolo, Kenya was one of the first countries to take advantage.

“Kenya’s main exports out of the AGOA window are from the apparel space and a lot of those goods are produced and processed in Kenya.

“Majority of these goods are processed in export processing zones where primarily foreign investors have been able to access,” Otolo said.

In the Ghana context, Albert Kassim Diwura, deputy CEO of the Ghana Export Promotion Authority, has said that a core mandate for the Ghana Exports Promotion Authority, amongst other things, is to provide current and reliable trade information to its exporters, constantly updating them about the AGOA.

“Another thing we prioritise is the capacity building of our exporters. We have an export school (virtual), though our plan is to have one in brick-and-mortar.

“As part of our delivery at the export school, we make AGOA top priority, telling people the products, the opportunities, how much we’ve made going by data, etc.,” Diwura said.

Ghana also has seen remarkable growth in its apparel and clothing sector. The nation’s ability to produce trendy, affordable clothing has made it a favoured supplier for American retailers, contributing to Ghana’s increased share of AGOA exports.

Nigeria’s non-oil AGOA exports have remained stagnant, primarily comprising a few agricultural products and handicrafts.

Though, “Nigeria was the top supplier of energy products in 2022 ($3.4 billion)”, experts have said that it is increasingly important for African nations to diversify their economies and expand their non-oil export sectors.

The AGOA was introduced as a transformative initiative designed to catalyse economic growth and foster trade between the United States itself, Nigeria, and other eligible African countries.

It is a testament to international collaboration and embodies a time-sensitive opportunity that requires strategic and swift actions, stakeholders have said.

However, Femi Boyede of Femi Boyede Consulting opines that the opportunity is far gone now, and more emphasis should be on maximising the opportunities that the AfCFTA offers.

“If we are talking about a race against time, then what time are we racing against? The twenty-three previous years that we have wasted or the 15 months thereabout that are left?

“It’s important to ask this question now because another time has started again, two years ago; the AfCFTA.

“Are we going to be racing against this or the same things that clipped our wings for the twenty-three plus years of AGOA (with Nigeria being credited only with the proceeds of oil sales to the US when we can export 6,700 other products under the Africa Growth and Opportunities Act) will resurface?” Boyede remarked.

US authorities will expedite negotiations on the Kenya-US Strategic Trade and Investment Partnership (STIP) and consider extending the African Growth and Opportunity Act (AGOA) beyond its expiry next year.

Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs Musalia Mudavadi who spoke after a meeting with US Secretary for State Mr Tony Blinken said these initiatives will facilitate expanded duty and quota-free access for Kenya’s and Africa’s exports to the US market.

STIP, which comes after the successful conclusion and signing of the EU Economic Partnership Agreement, will give Kenya unprecedented access to the US market. 

Mr Mudavadi and Mr Blinken discussed the Kenya-US partnership on peace and security in East Africa. 

"I held a constructive meeting with US Secretary of State Mr Tony Blinken on peace and security issues, including regional conflicts in East Africa and disruption of global logistics by the Middle East crisis’ said Mr Mudavadi.

On his part, Blinken stated: "We appreciate Kenya’s longstanding role in ensuring international peace and security."

Mudavadi's trip to the US comes after another successful trip to China where he has been proactively running with President Ruto’s economic diplomacy agenda.

Mr Mudavadi is on a strategic global tour to promote Kenya as an FDI destination, create markets for Kenyan goods and services as well as opportunities for Kenyan human capital across the world.

President Ruto mandated Mr Mudavadi to work with the National Treasury, Trade, Labor and Agriculture to create wealth and employment opportunities using economic diplomacy.

 Follow updates on the US-Kenya STIP negotiations here

The third round of the Strategic Trade and Investment Partnership (STIP) negotiations between Kenya and the United States opened in Nairobi yesterday.

Investment, Trade and Industry Cabinet Secretary Rebecca Miano said Kenya’s delegation is being led by Trade Principal Secretary Alfred K’Ombudo. 

The main agenda items for the meeting which wraps up tomorrow revolve around agriculture, good regulatory practices, and workers’ rights and protection, important areas that affect the livelihoods of millions of people in both countries.  The negotiators will seek to find common ground and address any outstanding challenges.

“As we exchange ideas on several areas of mutual interest, we should zero in on imperatives that can yield transformative trade and investment ideals. These will underpin our collaborative future, whilst setting a groundbreaking precedent for regional integration,” Miano explained in a statement. She expressed confidence that the two teams are equal to the task of crafting a more impactful partnership capable of unlocking the full potential of our bilateral cooperation.

Miano also called for the renewal of the African Growth and Opportunity Act (Agoa) and for Kenya to be granted special congressional permanent market access by the United States.

The trade agreement, set to expire in 2025, offers duty-free access to US markets for countries in sub-Saharan Africa that meet certain conditions on rule of law, human rights, and labour protections. It has provided substantial diplomatic benefits and led to major growth in sectors such as apparel, with exports to the US nearly doubling over 20 years.

If Agoa is renewed and Kenya is granted special congressional permanent market access, it could potentially enhance the benefits Kenya receives from the STIP.

It would provide Kenyan businesses with greater access to the US market, promoting economic growth and diversification.

Permanent market access

“Still on the co-operation of our two nations, I take this opportunity to call for the renewal of Agoa and urge our American counterparts to grant Kenya special congressional permanent market access. This will not only boost our trade relations but also foster peace and stability in the region,” Miano added.

The STIP is a key initiative that was launched in July 2022 to strengthen trade and investment ties between the US and Kenya.  The partnership aims to support sustainable and inclusive economic development, benefit workers, consumers, and businesses, especially micro, small and medium-sized enterprises (MSMEs), and help with the process of African regional economic integration.

In agriculture, the US has suggested a comprehensive set of provisions to improve market access for agricultural producers and promote food security.

These provisions aim to increase regulatory transparency and facilitate agricultural trade through science-based decision-making. In terms of good regulatory practices, both countries are working towards high-level commitments.

These include ensuring enough time for public consultations on proposed regulations, making proposed regulations available for stakeholder review, and basing regulatory decisions on the best available information, science, and evidence.

Regarding workers’ rights and protection, the US and Kenya are committed to advancing and protecting labour rights through the enforcement of labour laws, promotion of social dialogue, and co-operation on labour and employment priorities.

Kenya and the United States are set to begin talks on contentious clauses in a proposed bilateral trade deal amid fears the agreement could flood the market with cheap agricultural imports from America.

The delayed third in-person round of talks will focus on agriculture, good regulatory practices and workers’ rights and protections, according to a statement from the US Trade Representative Office (USTR).

The three-day negotiations starting from Monday were initially scheduled for December before being pushed back with a public explanation.

“US agricultural sector, which is highly subsidised, corporatised and industrialised, creates tariff and non-tariff barriers to imports. Kenya will run into many of these barriers,” said Prof David Monda, who teaches public policy at the City University of New York.

“Kenya will also struggle to negotiate around anti-dumping measures, especially in the poultry sector where the heavily subsidised US agro-industry can flood Kenya with cheap poultry products, crippling the domestic market.”

President Joe Biden’s team, led by Assistant US Trade Representative for Africa Constance Hamilton, said negotiators “have continued to make progress in deepening mutual understanding and resolving differences” since the last in-person meeting in Washington last December.

Trade Principal Secretary Alfred K’Ombudo is Kenya’s lead negotiator in the proposed US-Kenya Strategic Trade and Investment Partnership (STIP).

The talks come at a time when civil society and professionals have protested over the lack of stakeholder engagement by Kenyan authorities, especially on trade in agricultural and food products.

This is despite the USTR’s office collecting public views from American stakeholders between August and September 2022.

“With respect to agriculture, we recommend that Kenya assesses the cost of agricultural trade liberalisation for Kenya and Kenyan farmers ... There needs to be a comprehensive assessment of the effect of agricultural trade liberalisation,” the Kenya Small Scale Farmers Forum said in a statement last year.

Ways and Means Committee Chairman Jason Smith (MO-08) and Ranking Member Richard E. Neal (MA-01) released the following statement after hosting a bipartisan roundtable with Committee members and ambassadors from several African Growth and Opportunity Act (AGOA) countries.

AGOA is a U.S. trade program focused on strengthening economic ties between the United States and nations in Sub-Saharan Africa.

“We appreciate the ambassadors from African countries in the AGOA program as well as members of the Ways and Means Committee for participating in this positive dialogue to highlight both the importance of securing strong trade and investment partnerships between our nations, as well as affirming our commitment to this program and its future success,” said Chairman Smith and Ranking Member Neal.

“U.S. trade policy has proven to be an important avenue for bipartisan collaboration in Congress.

The Ways and Means Committee continues to engage in a thoughtful process to ensure America’s trade relationships are fair and beneficial to American workers, families, farmers, and small businesses.

We look forward to bringing that same level of commitment to the consideration of how best to renew the AGOA program and any potential reforms that are needed to improve outcomes and secure lasting and mutually productive trade relationships.”

Uganda's recent suspension from the preferential trade arrangement known as the African Growth Opportunity Act (AGOA) by the United States has undoubtedly posed a challenge, potentially rendering the the East African country's products less competitive in the U.S market.

However, amid this storm, the resilience and quality of Ugandan products could serve as a sturdy anchor, allowing the East African nation to weather the adverse effects of this decision, according to trade experts The Independent has talked to.

On January 01, President Joe Biden's administration struck Uganda off the list of sub-Saharan African countries that can benefit from AGOA on a claim of President Yoweri Museveni's government "gross violations of internationally recognized human rights"

Biden said in an executive order dated December 29, 2023 that he had "determined" Uganda alongside three other countries-Central African Republic, Gabon and Niger- no longer meet the requirements necessary to allow them to continue benefiting from the AGOA trade deal.

"Accordingly, I have decided to terminate the designations of the Central African Republic, Gabon, Niger, and Uganda as beneficiary sub-Saharan African countries for purposes of section 506A of the Trade Act, effective January 1, 2024."

The decision came barely three months after President Biden wrote to the Speaker of the U.S Congress last October expressing his intention to remove the four countries from the list of AGOA beneficiaries over human rights abuses. Analysts in Uganda linked the country's suspension from the trade deal to the recent enactment of a harsh Anti Homosexuality Act.

"Despite intensive engagement between the United States and the Central African Republic, Gabon, Niger, and Uganda, these countries have failed to address United States' concerns about their non-compliance with the AGOA eligibility criteria," he said.

Other countries already out of the AGOA affirmative programme include; South Sudan, Somalia and Burundi in the East African Community bloc as well as Ethiopia, Guinea, Mali, Gabon, Cameroon, Burkina Faso, The Gambia, Sudan and Zimbabwe. Mauritania was reinstated the same day Uganda was evicted from the deal.

However, President Museveni in a televised address on Jan.09 scoffed at the US administration saying such trade restrictions and pressures "have no meaning because Uganda is a country of wealth creators."

"Those putting pressure on us are just wasting time," Museveni said. He said his government's solutions to foreign pressure include; fighting corruption and concentrating on regional integration so that Uganda "only trades with countries that 'respect us."

Lindsey Spector, the Spokesperson of the U.S. Mission in Uganda told The Independent on Jan.11 in an email that, "AGOA stipulates that, to be eligible, a country, among other things, must "not engage in gross violations of internationally recognized human rights."

"U.S. law requires the President to monitor and annually determine if an AGOA beneficiary country should continue to be eligible, and if a country that currently is not a beneficiary, should be designated as a beneficiary," Spector said.

"Uganda was deemed ineligible after extensive communication with the government of Uganda over several years regarding deficiencies in meeting agreed-upon standards of democracy and human rights."

AGOA boon

Since the enactment of the AGOA legislation in 2000 to permit several African countries to export more than 1800 products to the U.S. market duty-free, Uganda has been a beneficiary of the affirmative programme albeit with very low export volumes.

Uganda has over the years exported diverse products ranging from, fish, footwear and leather products, dried fruits, banana products, tea, coffee, crafts, Shea butter products, apparel, Cow horn products, fruits and vegetables, Nile Perch, vanilla, chocolate, and flower cuttings.

Latest statistics from the U.S. Department of Commerce show Uganda's trade with the U.S. is far way smaller compared with its neighbours Kenya and Tanzania. For example, in the 12 months ending June 2023, Kenya's exports under AGOA amounted to US$ 268 million (47% of total exports to the U.S) while Tanzania's AGOA exports amounted to US$47 million worth of commodities (40% of its total exports to the U.S). In the same period under review, Uganda's exports to the U.S. under AGOA amounted to US$ 8.2 million, just about 11.5% of its total exports to the U.S.

Dip in export volumes and value

Interestingly, trade analysts have told The Independent that while the US decision could have a negative impact on the volume of its exports by rendering them slightly expensive compared to Uganda's peers, the East African nation will survive the AGOA suspension.

Dr. Isaac Shinyekwa, a Senior Research Fellow at the Economic Policy Research Centre (EPRC) at Makerere University told The Independent on Jan.11 that Uganda's suspension from AGOA does not mean that local exporters cannot send their products to the American market.

"What it means is that (now) Ugandan products have lost preferential treatment and are now less competitive," he told The Independent.

"For example, under AGOA, a Ugandan product did not attract a particular duty once it got onto the American market. Now, without AGOA, these products will be subjected to that duty which previously the Ugandan exporters did not have to pay, meaning Ugandan goods are now less competitive."

Dr. Shinyekwa, however, insisted that Uganda will overcome the AGOA suspension just like it did with the recent Rwandan border closure. He said the local entrepreneurs will reinvent themselves but they will do so at a higher price.

Meg Jaquay, the Chairperson of the AGOA Exporters Association of Uganda, says Ugandan entrepreneurs are determined to maintain their presence in the American market with or without the AGOA suspension.

Jaquay who also doubles as the President of the American Chamber of Commerce in Uganda told The Independent that unless the perception of not being under AGOA is a deterrent to American buyers, the impact of the AGOA suspension shall be "limited financially."

She points to the performance of Uganda's entrepreneurs in the U.S market during the COVID-19 pandemic for her optimism. She told The Independent that even during the pandemic, Uganda showed the largest growth of exports to the USA when compared to her East African neighbours. "That means the interest in Ugandan products is growing," she said.

"If your business must have the USA market as one of its sales channels, then it's all up to us as business owners to find the buyers that will buy our fantastic products, pay the price for them, and keep coming back for more despite not being under AGOA."

Jaquay told The Independent that it is not always about a tax advantage and luckily many of the products that Ugandan entrepreneurs export to the US still fall under what is called the "GSP" or the generalized system of preferences which is the import duty code from 1974 which still allows at least 5000 items to be imported into the US duty-free. She says, with AGOA, another 1800 products were added to that list making it more viable for other sectors to enter duty-free.

"(This means that) those sectors are now going to have to look to see how these minimal import duties may affect their bottom line. For some of them, they may just be able to absorb it until we are reintroduced into AGOA. It always comes back to the fact that, when you're in business, your ideal is with a client who you target," she says.

"If our Ugandan exporters' ideal client is a US business or a US consumer, then the business here in Uganda is just going to have to work a little bit smarter to figure out how to stay at the negotiating table without the umbrella of AGOA in their back pocket. It's not impossible, it's just something that we just now have to work just a little bit smarter to gain the trust of those US buyers."

"What we don't want to have to happen, and have seen it over the last few weeks since this was announced, is that everyone thinks Ugandan exporters will stop exporting to the USA. That is most definitely not the case," she told The Independent, adding that: "Every single exporter that I have spoken to has a shipment going to the USA this month. The consumers still love and want our products, and that is what we as business owners have to focus on."

AGOA's mixed results for Africa

Over the last two decades, AGOA has certainly helped boost African exports to the US, but the trade data raises questions about why some countries are better able to capitalize on the preferential trade rules. As of May 2023, 35 sub-Saharan African countries stood to benefit from the American trade programme, but experts say AGOA utilization rates and results have varied widely.

For instance, Kenya and Lesotho have had some of the highest AGOA utilization rates: 88% of Kenyan exports and 99% of Lesotho's exports to the U.S. market qualified for zero-tariff treatment with apparel products dominating for both countries' exports to the U.S.

But analysts at the U.S.based Brookings Institute say almost half of all beneficiary countries had a utilization rate of 2% or lower during the same period, meaning 98% of U.S imports from those countries were subject to U.S tariffs.

These discrepancies in utilization rates, the analysts pointed out, have tended to hinder AGOA's potential to "tip the scales when it comes to economic development, growth of commercial opportunities and job creation for many beneficiary African countries."

Why some countries are not benefiting from AGOA

Several factors could explain variations in AGOA utilization including differences in business environment, competing interests, lack of credit, lack of internet access, insufficient capacity, lack of government investment, and production costs and bottlenecks.

In order to go around some of those challenges, however, some countries have become creative by developing so-called "utilization strategies" which have in turn helped them register good AGOA export figures.

For example, the Brookings Institute notes, as of 2022, 18 of the 39 beneficiary countries had developed a strategy to utilize the AGOA programme. And 14 of the 16 countries that had published strategies in 2021 were able to increase their non-crude oil exports. Many countries that adopted a national AGOA strategy -such as Mali, Mozambique, Togo, and Zambia-experienced particular success and saw their exports to the U.S. rise by over 90% during this period.

One example is Ethiopia. Just before U.S. sanctions were slapped on it, Ethiopia had boosted its AGOA-eligible exports after developing a utilization strategy that identified sector-specific constraints and formulated strategies to address them.

This strategy is said to have led to the creation of a one-stop technical and information hub to assist the five priority product areas the Ethiopian government identified in the country's AGOA utilization strategy-textiles and garments, leather and leather products, horticulture, handicrafts and agro-processing.

Exactly one year after the hub opened, Ethiopia increased its exports to the U.S by over 50%-much more than the total increase of exports from AGOA-eligible countries to the U.S during the same period from 2015-2016 (19% on average).

Similarly, in 2017, Botswana developed an AGOA utilization strategy that identified specific barriers to exports, and established evaluation criteria and an institutional structure to track key metrics of specific priorities. Four years later, Botswana held more stakeholder meetings with civil servants in various ministries, private sector associations, individual firms, women's groups and non-governmental and semi-governmental organizations to gather input on new areas of concern in the economy resulting in a revised strategy.

"Botswana's strategy of continuously adjusting to changing circumstances may offer an important example for other countries in Africa on how to reduce policy conflict and ambiguity to successfully bridge the gap between policy formulation and implementation," said Landry Signé, Senior Fellow, Global Economy and Development at the Africa Growth Initiative.

According to Signé, a review of trade data suggests that creating AGOA strategies is positively associated with increasing AGOA utilization rates. Eswatini, Ghana, Lesotho, Madagascar, Malawi, Mali, Mauritius, Mozambique, Namibia, Rwanda, Senegal, Sierra Leone, Tanzania, Togo and Zambia are the other countries which have since managed to come up with AGOA utilization strategies and they have seen their AGOA exports rise from 2% to more than 3000%.

For instance, Kenya which published a utilization strategy in 2012, saw its exports to the United States under AGOA subsequently doubled between 2012 and 2020, thanks mainly to large exports of apparel products.

Madagascar published its utilization strategy in 2015 and its exports to the U.S. under AGOA (apparel, chocolate and basket weaving materials) shot up to 390% from 2015 to 2020. Similarly, Mali's exports to the U.S. under AGOA (black wheat, travel goods and musical instruments) rose by 397% between 2016 and 2018 after the government published a utilization strategy in 2016.

The biggest leap in export receipts was registered by Zambia whose exports to the U.S. under AGOA (semi-precious stones, pearls and copper) skyrocketed to 3000% by 2019 following the southern African country's publication of its utilization strategy in 2016.

Uganda's AGOA performance explained

Trade analysts in Uganda say Uganda' performance under AGOA has not been as impressive. Some say, the government has not been as intentional as its competitors on the continent. Some have blamed the fact that Uganda has failed to come up with its own AGOA utilization strategy.

Dr. Shinyekwa at EPRC partly agrees. "Quite often, when we (Uganda) sign agreements, we come back and rest on our laurels but we forget that (signing an agreement) is just the beginning of the process," Dr Shinyekwa told The Independent.

"The agreement gives you market access but it is also important to get market presence-that is where Uganda is weak. To access that market, there are a set of conditions that we have to meet."

"Whereas countries like Kenya sent their trade experts to the U.S. and studied the market for months and came back with an understanding of how Kenya would tap into the market under AGOA, it is not clear how Uganda has gone about its strategy." Shinyekwa told The Independent that market presence often comes with a bit of effort.

The current AGOA deal is set to expire next year in December, but there are murmurs in Washington D.C that an extension is under consideration. Spector, the Spokesperson of the U.S Mission in Uganda, told The Independent that Uganda could regain its AGOA eligibility through the annual review process if the Ugandan government takes significant steps to improve respect for human rights for all Ugandans.

So, if Uganda succeeds to regain its AGOA status, how should the government approach the trade deal with the U.S this time? Dr. Arthur Bainomugisha, the Executive Director at the Advocates Coalition for Development and Environment, a Kampala-based think tank, told The Independent that the Uganda government and its institutions and agencies need to execute better their respective mandates regarding the country's export strategy.

"There is need to streamline the coordination of the institutions and agencies. Instead of the overlapping mandates or competing mandates, it's better to pursue complementary roles instead of competition."

Dr. Bainomugisha says the AGOA opportunity needs to be knowledge-led this time. "W may need to cut out the politics and bring on board experts and professionals from the trade ministry and the Uganda Export Promotion Board to ensure that AGOA is continuously expert-led.

"Investing a little more in research; organizing our business community and supporting them (more) will be important," he says, adding that: "Uganda cannot afford to lose an opportunity to export to the U.S market of some 300 million people with great purchasing power."

For Jaquay of the Uganda AGOA Exporters Association, should Uganda get re-admitted into AGOA, the government policies would need to show that it still believes in the reasons why Uganda first entered into AGOA- benefit to Ugandans.

"We know that the President is focused on exports since he introduced PACEID (Presidential Advisory Committee on Exports and Industrial Development) in the last few years with the goal of US$ 6bn exports by 2028," she told The Independent. "Uganda needs to have great trade relations in every one of those major markets to meet that target."