Burundi to benefit from AGOA by boosting apparel sector
At first glance Burundi and Ethiopia look like total opposites. Burundi is the smallest country in Africa while Ethiopia is one of the largest. But the two countries have a lot more in common than you might think.
Agriculture is the dominant economic sector and both produce high quality specialty coffees. Burundi and Ethiopia are also land locked and face challenges in transporting goods across borders to trade regionally and internationally.
Maximizing their potential for export trade is another area that binds these East African nations together. Both Burundi and Ethiopia are eligible to export qualifying items, duty free to the U.S. under the African Growth and Opportunity Act (AGOA). Since 2009 the Trade Hub has helped facilitate $150 million in AGOA exports.
Since the end of 2006, Burundi has embarked on a path to democratic stability and improved economic growth. At the invitation of Burundi’s Ministry of Trade, Industry, Posts and Tourism, the Trade Hub met with government and business leaders in October 2013 and began the process of assisting Burundi to develop an AGOA strategy that focuses on areas of competitive advantage. While the Ministry of Trade, Industry, Posts and Tourism is leading the strategy initiative, there is extensive consultation with the private sector.
The Trade Hub has educated private sector groups and associations about AGOA and has sought their views on constraints to business development in exporting to the U.S. market. The response to developing an AGOA strategy has been overwhelmingly positive.
Burundi has identified a range of actions that it needs to undertake to respond to the opportunities that AGOA offers including identifying strategic export priorities, support to the business community and trade policy. Burundi is also applying for use of the Third Country Fabric provision which will allow them to jumpstart its nascent apparel manufacturing sector. With support from the Trade Hub, the Ministry expects to complete its AGOA strategy by January 2014.
Ethiopia has seen steady economic growth over the past ten years; it has been one of the fastest-growing non-oil-dependent African economies. The Ethiopian Government identified sectors for export growth in its national economic development plan, the Growth and Transformation Plan.
Following the success of the AGOA Forum in August 2013, the Government of Ethiopia with support from the United Nations Economic Commission for Africa (UNECA) began developing its AGOA strategy. The Trade Hub was invited to take part in the process to ensure that government and the private sector are aware of the opportunities under AGOA and provide support to firms to become export ready.
The initiative, which is being led by the Ministry of Trade and Industry, has singled out four areas for AGOA export development: textiles and apparel, footwear, home furnishings, and cut flowers. The government is developing detailed export strategies for each sector and is validating these with a cross section of business leaders and government officials. Ethiopia is on target to finish its AGOA strategy by early 2014.
The Trade Hub has facilitated $150 million in AGOA exports since 2009. With focused AGOA strategies for Burundi and Ethiopia, AGOA exports in these countries will undoubtedly grow.