- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Ethiopia: Not simply 'business as usual' for Ethiopia's AGOA ambitions

Ethiopia: Not simply 'business as usual' for Ethiopia's AGOA ambitions

Ethiopia: Not simply 'business as usual' for Ethiopia's AGOA ambitions
Weaving machine at a vertically integrated clothing factory outside Addis Ababa, Ethiopia (Photo:
Published date:
Monday, 12 August 2013

Ethiopia's share of exports under the African Growth & Opportunity Act (AGOA) is projected to rise from a mere 0.04pc to 10pc of total exports from the 39 beneficiary countries Fortune has learnt.

This is if a National AGOA Response Strategy, currently being drafted, is enacted in September 2013.

The country's exports by volume under the programme have been growing by 80pc annually, but they are now expected to grow by 200pc in the first year following the third AGOA extension, according to the finalised proposal.

Ethiopia's exports under the AGOA are primary agriculture products and textiles. The exports through the AGOA stood at 11pc of total exports to the US, in 2012. The total exports of Ethiopia through the AGOA reached 21 million dollars, in 2012.

The proposal is developed by advisers and presented to a group under the AGOA Steering Committee, named the Technical Working Group (TWG). The parties declined to provide details on the proposal, claiming it is too early in the process to release it. "First it has to be presented to stakeholders, so now is not the time to disclose details. Yet, I can say we are quite ambitious in the proposal," states Eyob Tekalign, AGOA advisor with the Ethiopian Chamber of Commerce & Sectorial Associations and the Economic Commission for Africa (ECA), who has been at the forefront of the response strategy preparation.

"Although we cannot make the proposal public right now, we can be confident that we, as a nation, will have a better opportunity to benefit from the AGOA. That is why we are strongly demanding that it be extended," added Geremew Ayalew, director of the Foreign Trade relation and Negotiation Directorate at the Ministry of Trade (MoT). The emergence of a number of large textile and leather companies backs up Ethiopia's plan to benefit from the upcoming AGOA more than any other country, according to Geremew. "Our performance, in terms of volume, has been increasing by 80pc each year, which is 67pc greater than what other countries grow annually. This is a great sign of our bright future," he said.

The proposal will be revealed in September 2013 to different stakeholders. These consist of government offices and exporters from the private sector. The response strategy, designed in line with the Growth & Transformation Plan (GTP), aims to stimulate the light industrial sectors, such as textiles and apparel, leather products and shoe manufacturing. It also includes plans to boost agro-processing, the financial sector and logistics management, as well as marketing and communications.

The textile and apparel subsector, which secured 121.9 million dollars in 2012/13, is expected to raise the export revenue to one billion dollars by the end of the GTP period, in a year and a half. Leather and leather products, which secured 97.8 million dollars the same year, are expected to reach 500 million dollars by 2015. "'Business as usual' cannot achieve GTP targets," says Eyob. Zemedeneh Negate, managing partner at Ernst & Young, states that the country needs to improve in three areas for the ambitious plan to succeed.

These include moving up the value chain, building more infrastructure and strengthening the manufacturing sector. If these conditions are met, the plan is a "realistic ambition", Zemedeneh says.

Read related news articles

Two years on: How Ethiopia's apparel sector is combatting AGOA uncertainty

During an exclusive side chat at Source Fashion in London, the president of Ethiopia's Hawassa Industrial Park Investors Association (HIPIA) Hibret Lemma, confesses Ethiopia is only just at the start of its shift away from relying solely on the US for its garment exports. He admits losing AGOA was a big hit to the country's garment sector and it slowed down growth considerably. However, Ethiopia's garment suppliers were hopeful that AGOA...

02 April 2024

US official reveals Ethiopia’s request for AGOA eligibility ‘still pending’, decision unlikely at upcoming forum

A US State Department official has disclosed that the decision to reinstate Ethiopia’s eligibility for the African Growth and Opportunity Act (AGOA) is “still pending”. Constance Hamilton, Assistant US Trade Representative for Africa, made this statement during a digital press briefing held on Thursday.  “Those decisions are still pending,” Ms Hamilton told journalists from the continent, and that “there probably will not be...

27 October 2023

State Secretary Blinken praises Ethiopia on Tigray peace, no return to trade programme yet

U.S. Secretary of State Antony Blinken praised Ethiopia on Wednesday for its progress in implementing a peace deal to end the Tigray conflict, but stopped short of ushering the country back into a U.S. trade programme. Visiting Ethiopia to repair relations that were strained by the two-year war in the northern region, Blinken met with Prime Minister Abiy Ahmed and discussed ongoing efforts to solidify peace, restore basic services and address...

13 March 2023

Ethiopia asks US to reinstate AGOA trade benefits as US Secretary of State Blinken heads to Addis, Niger

Ethiopia is asking the Joe Biden administration to reinstate its duty-free access to the US market, arguing that “exceptional circumstances” warrant an immediate re-examination of its suspension just as Secretary of State Antony Blinken heads to Addis Ababa to discuss the cessation of hostilities in Tigray. The Office of the US Trade Representative (USTR) terminated Ethiopia’s participation in the African Growth and Opportunity Act...

09 March 2023

Kenya 'reaps Sh10 billion after Ethiopia's ban from AGOA deal'

Kenya earned an additional Sh10.2 billion from its exports to the US as Nairobi reaped big from Ethiopia’s suspension from a duty-free trade pact. Last year, Kenya’s exports to the US — mostly apparel were valued at Sh59.6 billion, a jump of more than a fifth from Sh49.4 billion in 2020 as Kenyan traders sold more goods through the African Growth and Opportunity Act (Agoa), a free trade agreement between Washington and select African...

24 May 2022

US Senator requests return of Ethiopia to AGOA

A U.S senator has requested the senate to return Ethiopia to AGOA as it has been progressing in many aspects. U.S. Senator from Virginia Mark Warner said the U.S. should strengthen and improve the trade relationship between Africa specifically Ethiopia. The Ethiopian government has been pending progress in many aspects, especially the ceasefire. The trade relation between Africa specifically with Ethiopia is important. “We do that...

05 April 2022

In Ethiopia, Guinea and Mali, fears rise over losing duty-free access to US market

For Sammy Abdella, the new year has brought bad tidings: the prospect of a steep drop in sales of scarves, rugs, baskets and other textile goods produced by Sammy Handmade in Ethiopia. “The U.S. market is our main destination,” said Abdella, who estimates it accounts for nearly two-thirds of sales for his Addis Ababa-based home decor and fashion company. “So, losing that put us in a very, you know, bad situation.” The source of...

20 January 2022

US takes Ethiopia, Mali, Guinea off AGOA program

The United States on Saturday cut Ethiopia, Mali and Guinea from access to a duty-free trade program, following through on President Joe Biden's threat to do so over accusations of human rights violations and recent coups. "The United States today terminated Ethiopia, Mali and Guinea from the AGOA trade preference program due to actions taken by each of their governments in violation of the AGOA Statute," the U.S. Trade Representative's...

01 January 2022

Despite a late push, Ethiopia is set to exit the US trade pact

Despite a last-minute drive backed by diaspora members who fear that Washington may lose an ally, Ethiopia is likely to lose important commercial privileges in the United States on January 1 due to human rights concerns. President Joe Biden said on November 2 that Ethiopia, a longtime US ally and the continent’s second most populous country, will be removed from the African Growth and Opportunity Act in the New Year, citing “grave...

30 December 2021

US President terminates AGOA preferences for Ethiopia, Mali and Guinea

U.S. President Joe Biden announced yesterday that he has “determined that Ethiopia, Guinea, and Mali do not meet” the AGOA requirements described in section 506A(a)(1) and has proceeded to “terminate the designation of the three countries as beneficiary sub-Saharan African countries …effective January 1, 2022.” On November 21, the Ethiopian Ministry of Foreign Affairs lamented the impending decision by the U.S. to remove Ethiopia...

24 December 2021

Senator Van Hollen, Representative Bass urge Biden Administration to reconsider Ethiopia's suspension from AGOA

Today, U.S. Senator Chris Van Hollen (D-Md.) and Congresswoman Karen Bass (D-Calif.) urged President Biden to reconsider his Administration’s November 2, 2021 decision to terminate Ethiopia’s designation as a beneficiary country under the African Growth and Opportunity Act (AGOA) at the end of this year. As the lawmakers note in their letter (download a copy at the link alongside), this decision will hurt the nation’s most vulnerable...

23 December 2021

You are here: Home/News/Article/Ethiopia: Not simply 'business as usual' for Ethiopia's AGOA ambitions