TRALAC - Trade Law Centre

AGOA: Views from Nigeria

Thursday, 27 November 2003

Source: Financial Mail

The proposed broadening of the African Growth and Opportunity Act (Agoa), which is now being considered by the US congress, could boost foreign investment in SA and other sub-Saharan countries, economists said.

Prospects of much-needed foreign investment in the region and improved market access in the US for agricultural products were among several benefits the extended Agoa programme was expected to offer.

"The proposed changes under Agoa III will be a major breakthrough for eligible African countries," said Henry Flint of Standard Bank's economics division in a report on the development.

He said the extended termination date of the programme from 2008 to at least 2015 would make it more attractive for foreign companies to invest in the region.

"Those who have not invested in the past due to the limited timeframe may now find it viable," said Flint.

Economist Tony Twine of Econometrix said any broadening of the content, or the extension of the timeframe of Agoa was welcome.

Agoa affects different industries and sectors in different ways, and the devil sometimes lies in the detail, he said.

"Nevertheless, this must be regarded as a positive move, especially during a period of political history where the Americans are clearly looking after No1."

The Agoa III trade bill further proposes improving access for farmers in sub-Saharan Africa to the US agriculture market, where subsidisation and protection are hotly contested by SA and other developing countries in world trade talks.

Flint said that improved access for African agricultural products in the US was much-needed and long in coming.

It was not clear how the bill proposed achieving this, however.

The US-based Agoa III action committee, which lobbied for the substantial enhancement of the current Agoa II, said the preamble of the Agoa III bill in the senate and house of representatives last week paved the way for quick congressional action early next year.

Co-chairman of the group Rosa Whitaker urged expeditious passage of the bill yesterday.