African economies should increase their share of global trade to three per cent to enable them to generate $70 billion additional export revenues.

A U.S. trade official Florizelle Liser told the fourth Africa World Business Congress here on Monday that the amount would be equivalent to three times the current annual aid to the region.

Ms Liser, an assistant U.S. trade representative for Africa, told African countries could use the African Growth Opportunities Act (AGOA) to increase their exports duty- and quota-free to the huge American market. "The potential of trade to alleviate poverty far exceeds that of aid,"she said. She noted that Agoa's agricultural exports were increasing and totalled $361 million last year.

She called on the eastern and southern African countries to export horticultural produce to the U.S.

She said exports to U.S. of African cut flowers grew by 61 per cent in the first eight months of this year, totalling $ 4.4 million. The main cut flower exporters from the region are Kenya, Ethiopia, Uganda and South Africa.

She told President Jakaya Kikwete who opened the two-day congress that Tanzania should transform its cotton into apparel for export.

She singled out the Arusha-based Sunflag factory as one of the few completely vertically integrated apparel factories in Africa. "I see Tanzania having greater potential in the Agoa market," she said.

Meanwhile, a report presented at the meeting said that foreign direct investment (FDI) to Africa doubled to $36 billion last year from 2004.

The United Nations Conference on Trade and Development (UNCTAD) says the surge was to a large extent related to investments in extractive industries but also rose in various service industries. As a result of the increasing FDI, inflows as a percentage of the region's gross fixed capital formation increased to 20 per cent in 2006 from 18 per cent in 2005.

It says 10 top recipients of FDI in Africa accounted for $32 billion or nearly 90 per cent of the region's inflow last year from $20 billion in 2005. Eight of these attracted FDI in excess of $1 billion. An estimated 442 greenfield investments were undertaken in Africa last year.

During the same period also the value of cross-border acquisitions of African enterprises reached a record level of $ 18 billion. Investment projects attracting most FDI in Africa in recent years included those related to transport, oil, natural gas, mining, storage and communications.

Although Africa posed as risk to some investors in the past, the rates of return on investments in the continent has averaged 29 per cent, higher than any other region.

"This alone should be a pull factor for the needed investment and capital for African transformation" said Mr Issac Musumba, the Ugandan minister of State for Foreign Affairs.

His country attracted $307 million in FDI last year compared with Tanzania's $473 million.

Latest AGOA Trade Data currently available on AGOA.info


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