TRALAC - Trade Law Centre

AGOA: Nigerian Manufacturers Urged to Upgrade Quality of Products

Tuesday, 02 December 2003

Source: Daily Trust (Abuja)

Despite the promises of virtually unlimited duty-free access to the United States market for apparels made in sub-Saharan Africa under the African Growth and Opportunities Act (AGOA), textile companies in Nigeria are yet to take full advantage by exporting their products to that market.

At a one-day seminar entitled, "International Trade: Updates and Opportunities," Ezekiel Onaolapo Okeniyi, the Customs Area Controller at Seme border, Badagry, noted that Nigeria has not taken full advantage of AGOA.

According to him, recent studies in textiles show that there is a great deal of uncertainty in the minds of textile executives about the mechanisms of exporting to the US through AGOA.

The customs boss noted that it would be impossible for these firms to compete globally if they are paying import duties on equipments, parts, raw materials and financing their production on interest rates that run above 25 per cent.

His words: "Most factories are running at less than 50 per cent capacity and usually suffer frequent electricity outages thus increasing the cost of production when powered by generators.

AGOA was initiated by the United States of America to enable African countries have unhindered access to American markets through export of textiles, wearing apparels, footwears and agricultural products.

The Act was signed into law by former US President, Bill Clinton on May 18, 2000 and was also aimed at creating a new US/Africa partnership by promoting trade and other economic activities.

Specifically, AGOA opens the US markets for exports from sub-Saharan African countries with preferential access for an initial period of 8-years.

The US Congress will also have the option to review the trade agreement at the end of the 8-year period in 2008.

As at the end of 2001, 35 countries were designated and 17 countries were eligible for textiles and apparel provisions.