TRALAC - Trade Law Centre

Nigeria yet to reap benefits of AGOA since 2008, re-strategises

Sunday, 08 April 2018

Source: Nigerian Observer

Nigeria is yet to benefit from the African Growth and Opportunity Act (AGOA), after it was signed into law in May, 2008.

Mr Aliyu Abubakar, the Deputy Director, Trade Department, Ministry of Industry, Trade and Investment, made this known in an interview with the News Agency of Nigeria (NAN) in Abuja on Sunday.

Abubakar said that a draft strategy had been developed to ensure that the country benefitted from the act.

According to him, AGOA is a unilateral trade preference programme that aims at increasing U.S. trade and investment with Sub-Sahara African countries.

“AGOA was signed into law in May 2008, under the U.S. trade and investment Act.

“It provides access to the U.S. market for more than 6,400 products from Sub-Saharan African countries.

“AGOA forum is an annual event alternating between the Sub-Saharan African countries and the U.S.

“The first phase of the Act lasted from Oct. 2000, to Sept. 2008. The U.S. Congress on August 2015, further extended the period of the Act to 2025,’’ Abubakar said.

He said in order for a country to benefit, it must fulfil basic requirements such as a market based economy that protects property right and adherence to rule of law, including political pluralism.

Others he said include the elimination of barriers to U.S. trade and investment, and elimination of economic policies aimed at reducing poverty as well as encourage private enterprises.

He said that the country must also have a system to combat corruption and bribery, protection of internationally recognised worker’s right and non-engagement in gross violation of international terrorism and activities that undermine U.S. national security or foreign policy interest.

Abubakar said that as part of effort to reinvigorate AGOA implementation process in Nigeria, the ministry after due consultations with the relevant AGOA stakeholders had identified focal products for Nigeria to maximise its benefits within the shortest time.

He listed the challenges that hinders the realisation of the Act to include lack of sanitary and phyto-sanitary requirements, problem of labeling, packaging and quality.

Others are lack of product specific standard, supply-side constraints such as inability to meet up with large volume of orders from the U.S. and weak competitiveness as a result of weak infrastructure facilities and lack of finance.

He said that the country in collaboration with the United Nations Commission for Africa (UNECA) had developed the national AGOA response strategy, adding that it had been validated by stakeholders.

“The draft document has been forwarded to the minister and awaits approval from the Federal Executive Council (FEC),’’ Abubakar said.

He added that the way forward would be to fast-track the Land Use Act to support agricultural activities and strategies to remove administrative and logistic constraint being faced by farmers and exporters.

According to him, the ministry has developed a draft strategy with the objectives of promoting Nigerian participation with a view to benefitting from AGOA.

The director said Nigeria had no strategy because of some administrative issues.

He explained that the former Minister of Industry, Trade and Investment only fine-tuned the document and left without approval.

“We have to start all over with the new Minister, now we have gone back to our drawing board to come up with a strategy that will be acceptable to everyone.

“We have scheduled a stakeholders meeting from April 18 to April 19, to fine-tune and validate the document and as soon as possible submit to the minister for approval.

“Our target is to get the document approved by July, so we can have something to report at the U.S. annual Congress.

“The strategy is like our roadmap on what we will do between now and 2025, we want to see how we can achieve the lost ground so that Nigeria can start benefiting from the Act.

“We also developed an action plan with monitoring and evaluation to ensure that everybody is playing its part,’’ Abubakar said.

Mr Ken Ukaoha , the President, National Association of Nigerian Traders (NANTS), said Nigeria had not benefited from the Act to some reasons.

Ukaoha said that the country was yet to fulfill the requirement in terms of value addition which was the raw material required.

“This entails that a country must get raw materials for its country to send its goods that will be classified admissible under AGOA,’’ he said.

Ukaoha said that the country had not developed the sectors that would give these particular value chains that would be admissible under AGOA, citing the textile industry an example.

“These industries that are dandling would have gingered the capacity of our textile industries and export capacity, unfortunately the production capacity is low and adherence to the requirement are also low,’’ he said.

Ukaoha added that the infrastructure required for those industry that would have produce those commodities had already collapsed.

According to him, the trade policy and trade policy makers have not look toward the direction of how the country can tap from the benefits of AGOA.

“Again, because of the quality of the substandard nature of our productivity, this is where we need to look at our regulatory agencies.

“They should ensure that there is synergy between the private sector, producers, industrial producers and the regulatory agencies toward international standard operations.

“So, if we do all those things, we will start benefiting from AGOA,’’ he said.

In his remarks, Mr Fred Oladeinde, the Chairman, AGOA Civil Society Organisation Network, said that Nigeria’s exports to the United States under AGOA, plummeted between 2008 and 2016 due to weak demand for Nigerian Crude Oil imports.

Oladeinde said that there was an urgent need for export diversification to increase Nigeria’s exports to the U.S., particularly in sectors with strong demand in the U.S. like value added agricultural products, leather, food, spices, and beverages.

According to him, to achieve this goal, Nigeria an AGOA eligible country should develop bi-annual Country Utilisation Plan.

“Nigeria is yet to announce its AGOA Country Utilisation strategy and need to do so as soon as possible.

“This requires Public Private Partnership (PPP) and collaboration.

“We are eager to see the Ministry of Industry, Trade and Investment, AGOA CSOs network desk at the African Leadership Forum (ALF).

“We want to also see AGOA Resource Centre at the Nigeria American Chamber of Commerce (NACC), and other stakeholders work together to accomplish this important goal and help create badly needed good paying jobs in Nigeria and the U.S.’’

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