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Africa: United States seeks expanded economic growth

Published date:
Saturday, 27 June 2009

A central objective of U.S. trade relations with sub-Saharan Africa is to create a platform for expanded African economic growth, says a senior U.S. trade official.

"Sub-Saharan Africa's current share of global trade is less than 2 percent, down from 6 percent in 1980," Assistant U.S. Trade Representative Florizelle Liser testified June 24 at a congressional hearing.

"If sub-Saharan Africa were to increase that share by just 1 percentage point to 3 percent, it would generate additional export revenues of $70 billion annually, which is nearly three times the amount of current annual assistance to Africa from all donors. This reflects the importance of trade as a critical platform for Africa's economic growth."

Liser said that exports from the continent are concentrated in primary commodities such as petroleum, minerals, cocoa and coffee. She added that "there is little of the manufacturing engine in sub-Saharan Africa that has fueled economic growth and reduced poverty in other regions of the world."

And Liser said that agriculture, which is regarded as Africa's strong suit, has not been a positive contributor to export trade, and that in 2005 the region switched from being a net exporter to being a net importer of farm products.

"We believe that export diversification and further processing of agriculture products into higher-value exports could help improve food security in the region by addressing issues of availability and stability of food supply," Liser said.

Liser said that the African Growth and Opportunity Act (AGOA), a U.S. trade law enacted in 2000 by the Clinton administration, is a tool that has helped to increase both the volume and diversity of U.S. trade with sub-Saharan Africa. Economists believe that striking a critical balance between trade volume and the diversity of the exports is essential to regional long-term economic development and growth.

"AGOA also promotes economic cooperation and trade among the countries of sub-Saharan Africa by encouraging intraregional trade among AGOA beneficiary countries," Liser said. Two-way trade between the United States and sub-Saharan Africa was $104.6 billion in 2008, counting exports and imports, which was more than triple the amount in 2001, the first full year of AGOA implementation, she said.

However, Liser told the congressional hearing that the United States recognizes that trade with Africa has declined as a result of the current global economic crisis and declining oil and commodity prices. Many more African nations are taking advantage of the liberal trade opportunities under AGOA, she said, but many more are facing significant challenges in their efforts to increase trade.

"We are continuing our efforts to increase the number of AGOA-eligible countries taking advantage of the program, and we are also trying to address the many supply-side constraints the Africans face and to help them increase the range and quality of products being traded and improve Africa's overall competitiveness," Liser said.

U.S. total trade with sub-Saharan Africa, which includes both exports and imports, rose 28 percent in 2008 from the year before, as both exports and imports grew, according to a U.S.-African Trade Profile published by the Commerce Department's International Trade Administration (ITA). In 2008, U.S. exports totaled $18.6 billion, compared with $14.4 billion in 2007, and imports last year reached $86.1 billion, compared with $67.4 billion in 2007, the ITA report said.

Exports were driven by demand for machinery, vehicles and parts, wheat, noncrude oil, aircraft and electrical machinery, which included telecommunications equipment. U.S. imports of African products were led by crude oil and passenger vehicles, the report said.

The top five African destinations for U.S. products were South Africa, Nigeria, Angola, Benin and Ghana. U.S. imports from the oil-producing countries grew in every case from Nigeria, Angola, Republic of Congo, Equatorial Guinea, Chad and Gabon, the report said.

The 8th Annual AGOA Forum will be held August 4-6 in Nairobi, Kenya, at the Kenyatta International Conference Center.

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