TRALAC - Trade Law Centre

Botswana: Batswana entrepreneurs fail to use AGOA

Wednesday, 11 May 2011

Source: Botswana Gazette

The inability of Batswana entrepreneurs to take advantage of African Growth and Opportunity Act (AGOA) despite incentives provided in the textile and clothing industry was a focus point of a debate at a discussion form for women entrepreneurs Thursday.

“Although lack of access to credit poses a major challenge to many entrepreneurs to grow their businesses, a more fundamental problem has been their lack of exposure to business planning tools and models which would strengthen their case for credit,” said Banny Molosiwa, Permanent Secretary for Ministry of Trade and Industry.

She said, “Another challenge is that many entrepreneurs ‘think small’ in their business endeavors and as such do not attempt to reduce costs through economies of scale. Business costs are as a result passed on to their customer in the form of higher prices.”

The African Growth and Opportunity Act was signed into law on the 18th May 2000 by former United States President Bill Clinton, to promote economic development and expedite the integration of economies in Africa into the world trading system. AGOA was extended in 2004 for another 10 years up to 2015. An AGOA Forum between America and African beneficiary countries is held annually to review progress.

This year’s forum will be held in Lusaka, Zambia on the 9-10 June 2011.AGOA provides duty free access into the United States for more than 6,500 products from Africa. AGOA also provides a framework for US-Africa co-operation between government, private sector and civil society to work together to build capacity and expand business links.

Except for the year 2000, when Botswana’s exports to the United States peaked, Botswana records a trade deficit with the U.S. For the full year 2002, this trade deficit amounted to approximately $US 2,1 million. A comparative analysis of Sub-Saharan African shows Botswana’s exports to the United States, rank in the bottom half of the region.

No exports under the provisions of AGOA occurred during 2001, although U.S. trade data reveals that some exports qualified under AGOA during 2002. These consist entirely of qualifying exports in the apparel category, Botswana having qualified under the “Wearing Apparel Provisions” only in October 2001.

Despite being declared a “Lesser Developed Country” under AGOA, the country could until September 30, 2004 utilize third country inputs in the manufacture of AGOA-eligible wearing apparel. [Note from AGOA.info: In actual fact, Botswana is still able to utilise fabrics from third countries; this provision has not been repealed and continues to apply also to Botswana]. It was hoped that would lead to AGOA-eligible exports increasing significantly over the ensuing years.

Botswana’s exports to the U.S. have been dominated by minerals and metals, which during 2001 accounted for over 70% of the country’s exports to the U.S. For the year 2002, this figure remained fairly constant at 72% and has recently been affected by the global economic recession.This has been reflected in the slowdown in diamond sales as consumers in the United States where about 50% of Botswana diamond exports are sold cut down on luxury items.One of the rare success stories in Botswana has been enjoyed by Mabeo Furniture which is run by a relatively young Motswana who is committed to the production of high quality contemporary furniture. Mabeo is a brand from Botswana, Africa which promotes good design, use of sustainable materials, craftsmanship and people and furthers community development.

Apart from their premiere at Design Week in Milano, Mabeo has also exhibited at the 100% design in London and has been a regular exhibitor at the International Contemporary Furniture Fair (ICFF) in New York City, where they have been honoured with the Editors choice award for best craftsmanship, both in 2006 and 2008. “AGOA is beneficial and important but by itself is not sufficient,” said Peter Mabeo, Managing Director of Mabeo Furniture, at the seminar ‘Botswana women entrepreneurs: taking full advantage of market access – AGOA and beyond.’

He said “AGOA is just an incentive and it is a small part of selling things elsewhere. The infrastructure, raw materials and tax incentives are other components.”Mabeo maintained that making use of AGOA is more than just about making products which qualify. “You have to have focus and direction.”



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Botswana'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.




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