TRALAC - Trade Law Centre

NEPAD May Stimulate Increased AGOA Participation

Friday, 24 October 2003

Source: Engineering News (South Africa)

The New Partnership for Africa’s Development (Nepad) will create an environment conducive to the implementation of the African Growth and Opportunity Act (Agoa).

The Nepad declaration and Agoa share a number of prin-ciples, US Embassy economic section deputy chief Alan Tousignant says. “We see Nepad, which is an African initiative by Africans, as a promising programme that encourages cooperation in order to improve the political, economic and social situation in Africa,” he says.

On the issues of economic and corporate governance – which promote transparency in financial management – promoting market efficiency, controlling wasteful spending, as well as encouraging private financial flows, the two programmes are in support of each other, he adds.

Agoa is designed to increase volumes of trade and investment transactions between the US and sub-Saharan African countries by helping African companies export to the US.

Agoa has established criteria that countries have to meet to qualify, and Nepad seems to promote and encourage the same themes as stated by the Agoa criteria.

“Ideally, we would like all the countries in sub-Saharan Africa to meet the eligibility criteria and benefit from Agoa, and Nepad might be able to help countries on that path,” Tousignant says.

Agoa wants to benefit countries that are committed to the rule of law, political pluralism, and protection of worker rights. So Nepad, through its prin-ciples and structures, such as the pending peer review mechanism, may help to acceler-ate the process of creating con-ditions that will enable countries to benefit from US economic programmes like Agoa, Tousig-nant continues.

“We will be looking for con- crete actions by Africa to imple- ment the programmes on good governance in individual countries, and Nepad looks like a good vehicle for African countries to assist each other in reaching those objectives,” Tousignant explains.

He says there are encouraging ideas in the Nepad declaration, but the challenge is the implementation of those, and no one expects it to be easy.

Nepad has succeeded in attracting the attention of the leaders of the G8 countries, judging from its occupation of centre stage on the agenda of recent meetings, Tousignant notes.

“This is because of a shared vision by Africa and the rest of the world bodies for development, as well as by African leaders accepting responsibility for the development of their continent,” he says.

“The US remains strongly committed to Africa and its programmes,” Tousignant notes.

Evidence of this is the increase in the US’s development assistance to sub-Saharan Africa.

US president George W Bush has also proposed the Millennium Challenge Account (MCA), an initiative that aims to channel more assistance to developing countries, Tousignant reports.

One of the issues the US is promoting in Africa is regional integration.

When investors look at Africa, they look at the size of the market, so if there could be a more coherent regional integration of the African economy, it would increase the size of the market, hence attracting more investors, Tousignant explains.

He says this would also help countries to realise economies of scale and do things they might not otherwise consider.

Another positive development resulting from regional integra-tion is the negotiations towards a free-trade agreement between the US and the Southern African Customs Union, a regional organisation, he notes.