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Nigeria: Optimising gains from AGOA

Published date:
Wednesday, 30 July 2008

The successful shipment of Nigeria's first consignment of garments and food products to the United States (US) under the Africa Growth and Opportunity Act (Agoa) signed by former President Bill Clinton of the US on May 18, 2000 is a bold start after a long wait. The Act was signed into law as Title 1 of the US Trade and Development Act of 2000 and was to be in force until September 30, 2012. Nevertheless, the lifespan of the Act has been extended to September 30, 2015 by subsequent amendments signed by President George Bush, incumbent US President.

Without doubt, Agoa provides Nigeria and 39 other Sub-Saharan African countries covered by the Act a realistic opportunity of substituting the "aid giver-recipient" relationship existing between the US and African countries for a more dignified relationship of business partners. This is because Agoa provides trade preferences for duty-free entry of 6,500 different goods such as apparel (garment), footwear, chemicals, steel, wine, certain motor vehicle components, and a variety of agricultural products from 40 African countries including Nigeria into the United States.

Agoa is the outcome of campaigns championed by many African countries and development experts under the slogan of "Trade, Not Aid." The crux of the campaign is that what African nations need to wean themselves of foreign financial dependence is a favourable trade agreement rather than aid. Agoa is therefore, a necessary trade policy because it is designed to rid African nations of over dependence on foreign donor agencies with attendant conditionalities which have hindered true development in the continent. Expectations are that the Federal Government of Nigeria and the governments of the 39 other countries would continue to exploit the opportunities provided by Agoa to actualise efforts aimed at opening up their economies, building free markets as well as forging stronger and more effective trade partnerships between the West and Africa.

Among the many benefits expected from Agoa is that the Act would enable the 40 benefiting sub-Saharan African countries the opportunity of earning more foreign exchange, diversifying their economic base, creating more jobs and income-earning opportunities for their citizens, stimulate new trading opportunities for local businesses and facilitating their integration into the global economy. It is also expected that the opportunity provided by the Act would reinforce African countries' reform efforts, provide improved access to US credit and technical expertise and establish high-level dialogue on trade and investment in the form of a US-Sub-Saharan Africa trade and economic forum.

Nigeria must therefore, intensify efforts to follow up the successful shipment of its first consignment of goods under Agoa with more exports. This is because most of the non-oil products listed for duty-free export in the "Generalised System of Preferences" (GSP) document which specified the products covered by Agoa are available in Nigeria. It took Nigeria 8 years to ship its first consignment of goods to the US under Agoa. This does not suggest seriousness on the part of the government and other stakeholders that worked to take advantage of the Act to improve the Nigerian economy. If the life span of Agoa had not been extended, Nigeria would have only been able to benefit from the Act for just 4 years.

The Federal Government must therefore, intensify efforts at providing an enabling environment for the non-oil sector of the country's economy to thrive. Recent plans by the Federal Government to establish a fund for agriculture should be intensified. This is because it is when there is an enduring business environment for the agro-allied sector of the economy to do business that the country would produce qualitative and large volumes of GSP products for export.

President Umaru Yar'Adua must, therefore, muster the political will required to revive the non-oil sector of the economy. This political will must include curbing official corruption, improving infrastructure especially electricity and roads, providing the climate for access to soft-interest loans and providing excellent transport systems. President Yar'Adua must immediately address the dilapidated infrastructure in the country because they contribute to the increasing cost of doing business in Nigeria. Many agro-allied industries in Nigeria have folded up because they could not afford the exorbitant cost of running their businesses on generator. It is therefore, not surprising that the World Bank recently rated Nigeria as having one of the least business-friendly environments in the world.

The Federal Government has intervened to save the nation's textile industry from total collapse through the N70 billion textile industry resuscitation fund, thus making it possible for Nigeria to successfully export the first consignment of garments under Agoa. The start of shipping of made-in-Nigeria apparel to the US under the Agoa Skills Acquisition Centre in Lagos would give Nigerian products more exposure in the international market. It could indeed, provide the opportunity for Nigerian textiles to find their ways into other markets outside the United States. Such a development would mean more foreign exchange earnings for the country which would in the long run rob off positively on the economy.

The unrestricted access to the US market which Agoa offers African countries some kind of relief as only countries or regions with which the US has a Free Trade Agreement have unhindered access to the US market. The Federal Government must do everything possible to ensure that Nigeria reaps the full benefit of the Act before it expires on September 30, 2015.

“ Latest AGOA Trade Data currently available on

Click here to view a sector profile of Nigeria’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.

Other regularly updated trade statistics on include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.

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