TRALAC - Trade Law Centre

Zambia: AGOA - it's make or break for country

Tuesday, 29 March 2011

Source: Times of Zambia

Zambia will in June this year host a big international conference of the African Growth and Opportunity Act (AGOA) at which more than 1, 500 delegates from eligible countries, the United States and other stakeholders will be in attendance.

As Zambia intensifies preparations for this once-in-a-while event, a high level meeting of ministers of Finance, Planning and Economic Development, and a committee of experts from the African Union (AU) member states held a weeklong meeting in Addis Ababa under the auspices of the AU and the United Nations Economic Commission for Africa (UNECA).

The conference held at the UN Conference Centre, discussed among other issues, Rethinking the Role of the State in Africa's Development, Transition to a Green Economy: Key Issues, Health Financing in Africa: Challenges and Way Forward, Leveraging Opportunities for Accelerated Growth: Prospects and Policies for the Next Decade and Dissecting the Economic Report on Africa (ERA 2011) and Beyond.

The last though not least part of the Conference agenda, the ERA 2011 saw the launching of the Economic Report on Africa 2011 under the Ministers' Conference theme: Governing Development in Africa - The role of the State in Economic Transformation.

According to the report that was launched on Monday, March 28, 2011, 10 years after its enactment in 2000, AGOA has proved able to foster US-Africa trade.

African exports to United States increased from US$23 billion in 2000 to $81 billion in 2008.

Even non-oil exports increased 230 per cent by 2008, despite exclusion of key African exports such as sugar, peanuts, dairy and tobacco.

Foreign Direct Investments and employment have increased, with more than 300, 000 new jobs created in Africa in the first nine years of AGOA.

Nonetheless, the benefits of AGOA have been unevenly distributed, and although AGOA has been extended to 2015, the time is insufficient for Africa to raise its productive capacity.

Uncertainty about the future of AGOA has kept the required investment at bay, making it challenging to consolidate gains.

Since the goal of AGOA is to promote lasting growth and development, it should be extended.

A longer period would give investors more time to recoup returns on investments and thereby take full advantage of the gains.

Other challenges faced by AGOA beneficiaries include: accommodation of increased competition since the elimination in 2005 of the Multi-Fibre Arrangement (MFA), which opened up the textile sector to market forces;

The inability to diversify trade in agricultural products, which account for less than one per cent of AGOA exports, partly due to the quotas on sugar, peanuts, dairy and tobacco;

And the failure of AGOA beneficiaries to take a regional approach, so that removal of African countries from the beneficiary list would create ripple effects on other regional trading partners.

According to the report, use of AGOA is also hampered by infrastructure deficiencies, poor public institutions and lack of competition among service providers in beneficiary countries.

In addition, the AGOA framework lacks mechanisms for promoting innovative ideas for public-private partnerships (PPPs) for infrastructure investment, improved operating efficiency and logistics market reforms, especially transport regulation.

The report concludes that although AGOA has had a positive impact on Africa-US trade relations over the past decade, there is room for improvement.

AGOA should be revised to ensure more inclusiveness, accessibility and permanence, so that the benefits can extend beyond a few countries and products.

It also needs to re-orient FDI away from textiles and apparel and the oil sector towards agriculture, by assisting beneficiaries to comply with standards and sanitary and phytosanitary measures and to eliminate supply-side constraints.

Targeted export diversification should also be part of this existence.

Like the African Union Commission Director for Economic Affairs Dr Rene Kouassie said during a one day workshop for journalists preceding the Ministers Conference, "economic growth does not invent itself, it is created."

Africa has abundant resources that should be able to ensure that they 'literally' take over AGOA through quantity and quality production of goods.

He said there were a lot of opportunities for growth for Africa. The continent can use its demography, mineral resources and arable land for increased agricultural activities.

Therefore, as Zambia hosts this important conference, Africa should be united and coordinate its development processes so that the entire continent gains.



“ Latest AGOA Trade Data currently available on AGOA.info


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


Other regularly updated trade statistics on AGOA.info 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.