TRALAC - Trade Law Centre

EAC lobby wants region to approach AGOA as one

Saturday, 27 June 2009

Source: Daily Nation

The American market has remained elusive for most firms in East Africa, but this could be reversed if they approach it as an entity and leverage on their different strengths, a regional business lobby official says.

The East African Business Council (EABC), executive director Mr Charles Mbogori said exporters tended to stick to traditional markets in Europe and Asia, despite the opportunities in America. “Exporters are still not well informed on the American market, its nature, and business environment,” he said.

Speaking at the EAC preparatory meeting in Rwanda for the 8th Sub-Saharan Agoa Forum to be held from August 4 in Nairobi, Mr Mbogori said distance and high cost of doing business in the region represented another barrier. He added that the region had among the highest energy and transport costs in the world.

The US secretary of state, Mrs Hilary Clinton, is expected to lead a delegation of 300 to the forum where 38 African countries will be represented.

Mr Mbogori said the private sector had failed to significantly increase export volumes to America, 10 years after the Africa Growth and Opportunities Act (Agoa) was provided.

Advantage

“Each country should concentrate on the area that gives them the most comparative advantage and regional competitive advantage,” he said.

Mr Mbogori said industries that produce smaller quantities should merge into regional industries that can meet the demands of a bigger external market.

This would increase capital, market share and spread the risks while enhancing sustainability of a larger market.

However, Kenya is among countries that have used Agoa better. Its exports to America reached Sh21 billion in 2008 compared to Sh9 billion in 2000, when Agoa was mooted.

Others are Mauritius, Botswana, Swaziland, Namibia and Nigeria. Tanzania, Uganda, Rwanda and Burundi have performed poorer. However, Kenya has only been exporting 12 products to the market.