TRALAC - Trade Law Centre

How African countries can maximise the benefits AGOA provides

Friday, 25 August 2017

Source: CNBC Africa

Since the year 2000, the African Growth and Opportunity Act (AGOA) has given eligible African countries duty and quota free access to the United States’ markets.

This has created an opportunity for African businesses, big or small to meet, trade with new markets and improve the quality of their products.

Over the years, it has been described as a catalyst for democracy and a criterion for African countries that want to partake in the AGOA agreement.

The 16th edition of AGOA Forum sought to explore how countries can continue to maximise the benefits AGOA provides. Thanks to the dedication and hard work of the National Organization Committee of the AGOA Forum in Togo, led by Mrs. Dede Ahoéfa Ekoue, the Lomé edition of the event was a great success.

Togolese Prime Minister Komi Klassou described the forum as an “opportunity for Sub-Saharan Africa to review the different challenges and point out the challenges of achieving accelerated and inclusive growth”.

“The key matter of the forum is how do we leverage trade for the economic good of our people and see the best way to maximise the opportunities of AGOA?,”  added Togolese Minister for Trade Bernadette Legzim-Balouki.

According to the Togolese trade minister, the volume of trade between the US and Africa has dipped in the past few years.  According to AGOA.info’s website, combined two-way goods trade in 2015 was valued at $36 billion and $50 billion in 2014. [2016: $32 billion]

Intra-African integration which reportedly stands at 13 percent is said to contribute to Africa’s low contribution to global trade.  According to some delegates at the conference,   the removal of certain barriers to aid connectivity will go a long way in improving Africa’s contribution to global trade.

“Togo has 8 million inhabitants, a small market. But ECOWAS is a market of 300 million. We can consolidate and boost exports, “ says  Balouki

Togo is a West African country working to achieve this. With massive investments in its infrastructure, especially transport infrastructure, the small West African country is positioning itself to become a transport hub in West Africa.  Togo’s Minister of Infrastructure and Transport Ninsao Gnofam calls it a place of transit.

With a modern airport and the construction of another 300 kilometre runway, owning one of the deepest Sea Ports in Africa and a number of inter-connecting road projects, Togo is gradually becoming a transport hub for the import and export of goods in out of Africa.

“We can welcome ships carrying 20,000 containers,” says Ninsao

Togo was granted a textile visa which allows the country export apparels to the United States of America. While this is a laudable achievement, Togo does not own a textile mill.  Togo’s cottons are milled outside the continent and imported into the country. Senior Bureau Official At The Bureau Of African Affairs, Peter Ballerin says AGOA allows for eligible countries to export textiles milled outside the country.

But how much can countries such as Togo benefit from such provisions. This emphasises the need for African countries to revive textile manufacturing in order to reap full benefits AGOA provides,.

Togo is also rich in agriculture and has the potential to boost its economy through the export of agriculture produce. According to the US Ambassador to Togo David Gilmour, “Togo has a lot of productive land but there are barriers that must be addressed, barriers such as land rights, business climate issues, telecoms service and increase in competitiveness”.

That said, Togo is an excellent investment destination, he adds.

Togo is working to improve the ease of doing business in the country. It takes just two days to register a business in there.  Togo however is one country out of many eligible African countries under AGOA.  Delegates at the conference believe a lot more needs to be done especially when one considers the fact that the AGOA agreement may not be extended beyond 2025.

Fred Oladeinde, Chairman of the Civil Society Network Secretariat sums it up better, “millions of Dollars and lives have been invested to get us this far. We need to use our time wisely to achieve our goals and objectives of crafting competitive policies, implement cost effective initiatives in developing infrastructure and linkages that bring the level of investment and technology required to build industries and create jobs”

While Togo’s economic recovery has allowed the country emerge as a dynamic player in the region with the Lomé Ports,  home to regional  Airline, Asky and Pan African Bank, Ecobank, Togo is introducing reforms which it hopes will increase its growth rate from 6 per cent recorded in 2015. Togo’s aim is to trade with the rest of Africa and the world. The underlying objective is to ensure every citizen takes part in this journey towards economic stability.

For Africa, the time to act is now as 2025 is just a few years away.

 

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