TRALAC - Trade Law Centre

Botswana: Textiles anchors 53% jump in AGOA exports

Wednesday, 28 January 2015

Source: Mmegi Online (Botswana)

Botswana exports to the United States under the African Growth Opportunity Act (AGOA) increased by over 50 percent between January and November 2014. 

According to the statistics from US Department of Commerce, exports to US under AGOA increased 53 percent from $5.5 million (P52 million) to $8.5 million (P80 million) in the first 11 months of the year, mainly on the back of increase in textile and apparel.

In the period, total exports to the US, which were dominated by mostly diamonds, increased 16 percent from $246.3 million to $286.4 million. While Botswana is empowered to export 6,500 products under AGOA, textiles have benefited the most, being easy to establish with a relatively low cost of labour.

Other products that Botswana is eligible to benefit from include jewellery and leather products.

USAID Southern Africa Trade Hub, Trade and Investment Specialist, Cosmas Mamhunze said Botswana’s textile exports in the nine months to September amounted to $7.4 million constituting 87 percent of total AGOA eligible exports.

In the period, Botswana was the seventh largest textile exporter to the US under AGOA in sub-Saharan Africa.

 “However, only one percent of the total $754,5 million exports from AGOA-eligible countries, came from Botswana,” he said.

Mamhunze said textiles/apparel exports under AGOA constitute 87 percent of the total exports from Botswana in 2014, even though the total exports are up to November 2014 yet textile/apparel figures are up to September 2014.  

In the first three quarters of 2014, the top-rated African textile exporter was Kenya with exports valued at more than $283 million, followed by Lesotho at $226.4 million with Mauritius in third place at $162 million worth of exports.

In 2013, Botswana exported goods worth US$277 million of which less than three percent (US$5,9 million) was under AGOA.

The top five exporters to the US in Africa are mainly oil producers, which unfortunately slumped last year due to the global weakening of oil prices.

AGOA was signed into law in May 2000 and it offers tangible incentives for African countries to benefit from opportunities in the US market to continue their efforts to open their economies and build free markets.

The only Botswana textile firm exporting under AGOA is Carapparel. The rest of the textile exporters are servicing the South African market. Carapparel Company manufactures knitted and woven garments for men, women and children for local consumption and export to USA market.

Indian diamond firm, Shrenuj Botswana is the only company that has tapped into the opportunity by exporting locally made jewellery to the US under AGOA. 

Botswana companies have failed to take advantage of AGOA because of lack of raw materials and complications arising from US rules of origin. Studies have also revealed that Botswana companies have limited production capacities and have not adequately diversified their products.

 

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