- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Botswana: Government acts as AGOA exports hit zero

Botswana: Government acts as AGOA exports hit zero

Botswana: Government acts as AGOA exports hit zero
Published date:
Friday, 04 June 2021
Mbongeni Mguni

Government is hoping its newly revitalised strategy for the African Growth and Opportunities Act (AGOA) reaps dividends after revelations that exports by local companies under the trade deal have been at zero since 2019 end.

AGOA is a trade arrangement between the US and sub-Saharan African countries, including Botswana, which runs till 2025 and provides relaxed access to the American market.

From a peak of P1.8 billion in AGOA exports by local firms in 2008, the figures have been plummeting over the years as key exporting sectors such as textiles and garments have struggled with a plethora of issues.

While the US remains the most lucrative market for local textile players, issues such as scale, capacity, distance, costs, high competition for the American market and government reluctance to keep extending incentives for producers, have led to the closure of some factories and relocation by others.

Thomas Newberg, an International Trade Specialist in the US Department of Commerce told BusinessWeek the last exports from Botswana under AGOA occurred in 2019 and consisted of wooden ornaments worth about $3,500.

The last textile exports under AGOA from Botswana were in 2017 and consisted of women’s garments worth about $970,000.

Since the beginning of this year, no AGOA exports have been recorded from Botswana.

“The potential for AGOA in regards to textiles and apparel is very high,” Newberg said.

“AGOA is one of the most liberal trade preference programmes that the United States offers and allows eligible countries like Botswana to source fabric from third-party countries and will continue to be in place until September 2025.

“AGOA eligible countries have consistently fallen short of the quota fill rate for third-party fabric, indicating that AGOA has been historically underutilised for its potential.”

Information dug up by BusinessWeek indicates that the local textile sector has generally refocussed to target the local retail market, government procurement as well as exports into South Africa.

Ministry of Investment, Trade and Industry acting deputy permanent secretary, Gideon Mmolawa told BusinessWeek the recent revision of the country’s AGOA strategy meant focus would be placed on supporting the exports of meat and meat products, natural/indigenous products, handicrafts, jewellery and semi-precious stones.

“Horticulture and agro-processing, textile and apparel (as well as) and leather and leather products remain important,” he said in a written response to enquiries.

“Some local companies have made encouraging progress in exporting natural/indigenous products with a global value worth an estimated $37 billion.”

Mmolawa added that jewellery and semi-precious stone producers had already established contacts in the US while the arts and crafts talent in northern Botswana was expected to take advantage of the AGOA trade deal.

He said the government continued to support the local textile sector through a ‘stern focus’ on the manufacturing of uniforms for disciplined forces and schools as a way to penetrate local supply and retail.

Regional clusters in rural areas are being developed to strengthen the value chains, while awareness campaigns were also taking place on the advantages of AGOA, the acting deputy permanent secretary told BusinessWeek.

“(There is also) use of diaspora in the US to disseminate information and products through established channels,” Mmolawa said.

The country’s previous AGOA strategy had recommended that potential exporters be profiled and these profiles shared with the Botswana Embassy in the US.

Other interventions were to include the participation of firms at international trade events, training initiatives, buy-seller linkage programmes and duty or rebates on sourcing of raw materials.


Read related news articles

US and Botswana MITI launch revised AGOA Utilization Strategy to improve economic growth in Botswana

On April 29, the Embassy of the United States of America joined the Ministry of Investment, Trade, and Industry (MITI) and other stakeholders to launch the revised strategy (see link to download) at the Hilton Garden Inn in Gaborone.   U.S. Ambassador to the Republic of Botswana, Craig L. Cloud, joined Minister Mmusi Kgafela to formally launch the strategy.   Also present were the USAID Representative to Botswana, Ms....

03 May 2021

Botswana: AGOA dream dims for local textile sector

Local textile and apparel producers appear to be giving up hope of exporting to the United States under the duty-free AGOA provisions, preferring instead to focus on the local and regional markets, BusinessWeek has established. AGOA is a trade arrangement between the US and sub-Saharan Africa running till 2025 and providing relaxed access to the American market. Textiles are Botswana’s primary export under AGOA. From a peak of P1.8...

30 August 2019

Botswana: Textile sector upbeat, despite AGOA export collapse

The country’s textile and apparel exports to the United States under AGOA, fell to just $3,000 (P32,100) in 2018, the first numbers showing the impact of the relocation to Lesotho of the last exporting firm. Under the African Growth and Opportunity Act’s duty and quota free provision, Botswana textile firms were shipping off P1.8 billion in stock to the US at the peak in 2008. Becky Geiger, an international trade specialist in the US...

22 March 2019

Botswana: 'Businesses fail to fully utilise AGOA' - BITC

Local businesses are failing to exploit the African Growth and Opportunity Act (AGOA), says the director for export development at Botswana Investment and Trade Centre (BITC), Mr Obert Yuyi. Mr Yuyi said this during a national AGOA response strategy workshop in Francistown on April 24. He said with the recent closure of mines around Francistown, unemployment was on the rise and that it required the business community to take over and employ...

25 April 2018

AGOA strategy awareness in motion for Botswana

The Ministry of Investment Trade and Industry (MITI) in collaboration with Botswana Investment and Trade Centre (BITC), U.S. Embassy in Botswana, USAID Southern Africa Trade and Investment Hub, African Women’s Entrepreneurship Program (AWEP), the Local Enterprise Authority (LEA), the Citizen Entrepreneurship Development Agency (CEDA) and the Botswana Export Credit Insurance (BECI) are conducting nation-wide workshops to sensitize the...

01 March 2018

Botswana: Fresh attempt to revive AGOA exports

Despite duty free access to the United States (US) market, exports from Botswana have virtually dried up due to inadequate awareness of the African Growth Opportunities Act (AGOA) programme and the high cost of compliance with technical regulations, standards and quality certification. From the peak of exports worth around $17 million in 2011, which were dominated by textiles, exports under the AGOA pact to the US in 2016 were at a paltry $4...

25 August 2017

Botswana: Government launches strategy to benefit more from AGOA

The African Growth and Opportunity Act (AGOA) National Response Strategy, which was developed through the assistance of the USAID Southern Africa Trade and Investment Hub, will be launched at the beginning of next month. The strategy would help local businesses grow by taking advantage of AGOA provision of duty-free exports to the United States of America (USA) with the hub’s experts working directly with the private sector to improve...

25 August 2017

Botswana: Women in business urged to utilise AGOA

Women in business have been encouraged to take advantage and participate in the lucrative US preferential trade scheme known as the Africa Growth and Opportunity Act (AGOA) for better profits. African Women’s Entrepreneurship Programme (AWEP) chairperson, Chigedze Chinyepi said this when addressing women in business during AWEP’s capacity building workshop that was held at Tati River Lodge recently. Chinyepi said Botswana is one of the...

14 November 2016

Botswana advised to establish AGOA office

Speaking this week during the validation workshop of the draft AGOA strategy in Gaborone, George Makore said the AGOA office should be headed by a coordinator to be assisted by experts in export development, investment promotion, and information dissemination. “The process of setting up the institutional structure should be initiated within 60 days of approval of the strategy,” he stated. While the ministry of investment, trade and...

11 November 2016

Botswana to get garment training centre

The Botswana government has given the go-ahead for the Textile and Clothing Institute of Botswana (TCIB), the first of its kind in the country, to overcome a chronic shortage of skilled workers that has negatively impacted the textiles sector for many years. Its founder, Shahid Ghafoor, president of the Botswana Textile and Clothing Association, said TCIB was offering one-year certificate courses in clothing manufacturing in a wide variety of...

14 May 2016

You are here: Home/News/Article/Botswana: Government acts as AGOA exports hit zero