TRALAC - Trade Law Centre

Nigeria and the AGOA programme

Tuesday, 19 July 2011

Source: Business Day Nigeria

The African Growth and Opportunity Act (AGOA) passed as part of the Trade and Development Act of 2000 by the United States to facilitate export trade between US and sub-Saharan Africa is a programme that has come to question the very character of the Nigerian economy. It is one programme that has come to tell us, once again, that we are not doing it right.

Concerned Nigerians have never stopped drawing attention to the lopsided character of the Nigerian economy which is largely dominated by oil and have argued over and over again the need for the nation to bring into the basket of our economic activities the our long list of non-oil products which we can equally earned billions of dollar from. But sadly, the managers of our economy seem not to have the political will to take the bull by the horn.

AGOA provides participating countries in sub-Saharan Africa with the most liberal access to the U.S. market. It covers 6500 product items, after the extension of GSP preferences to a further 1,800 product lines, including numerous food products, handbags, gloves, footwear, iron and steel items, automotive components and vehicles. Countries meeting the 'Apparel Provisions' further qualify for duty-free access for apparel.

But good as this programme is, Nigeria is yet to take full advantage of it because it has against all entreaties, chose to remain a monocultural economy. An analysis of the trade data by Product Sector reveals the distribution of exports into the U.S. under AGOA and shows that there are three sectors, namely 'energy-related products', 'textiles and apparel' and 'transportation equipment' that account for over 90 percent of exports currently qualifying for AGOA benefits. 'Agricultural products' and 'minerals and metals' have also been successfully exported by other African countries to the U.S. under AGOA.

Nigeria shines only in the ‘energy-related products sector. Nigeria has failed woefully in the ‘textiles and apparel’, ‘agricultural products’ and ‘mineral and metals’ sectors where it has potentials to do so. In 2010 U.S. exports to sub-Saharan Africa exceeded $17 billion while U.S. imports from the region were greater than $65 billion. This looks good on the surface, but when you are confronted with the details, you find out that export of crude oil and petroleum products accounts largely for the AGOA trade progress in question. And interestingly, Nigeria accounts for over 50 percent of crude oil and petroleum product export from Africa to the US accounting for 33.2 million barrels of the 66.0 million barrels sold by Africa to the U.S. (December 2010).

From 2009 to 2010, U.S. imports from Sub-Saharan Africa (SSA) increased by 39 percent to reach $65 billion. This increase was mostly due to a 40 percent jump in crude oil imports, accounting for 81.4 percent of total U.S. imports from SSA, with both price and quantity increasing. This growth closely parallels the large increase in total crude oil imports from virtually all oil producing trading partners, including non-AGOA eligible countries.

U.S. imports from Nigeria increased by 60 percent (recall Nigeria accounts for over 50 percent of U.S. oil import from Africa), from Angola by 28 percent, from the Democratic Republic of Congo by 60 percent, and from Gabon by 80 percent. U.S. imports from South Africa also grew by 40 percent driven mainly by increases in diamonds imports. U.S. imports from Ghana rose by 103 percent due to an increase in cocoa imports (gained from Ivory Coast’s political instability and negatively affected cocoa industry).

In 2010, AGOA imports were $44 billion, 31 percent more than in 2009, mainly due to a 33 percent increase in AGOA petroleum product imports. Petroleum products continued to account for the largest portion of AGOA imports with a 91 percent share of overall AGOA imports. With these fuel products excluded, AGOA imports were $4 billion, increasing by 18 percent. U.S. imports of AGOA chemical and related products increased by 39 percent, AGOA minerals and metals by 94 percent, AGOA agricultural products by 44 percent, and AGOA transportation products by 15 percent. AGOA textiles and apparel imports decreased by 20 percent and AGOA machinery related products by 44 percent.

The poor showing of Nigeria in AGOA is a reflection of the fundamental weaknesses in the economy as reflected in the high cost of doing business. For as long as operating cost remains high, no significant progress can be made in the non-oil export sector.

We must therefore right this wrong now.



“ Latest AGOA Trade Data currently available on AGOA.info


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 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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