The 24-year Africa Growth and Opportunity Act has helped African economies gain access to US markets. It’s a deal with the United States allowing African countries to avoid various tariffs. In 2022, combined two-way trade between AGOA beneficiaries and the US exceeded $46 billion, with US imports exceeding exports by $13.5 billion. Although it was renewed last year, there are concerns about the future of trade relations.
US senator Mike Crapo has told international media that the United States is losing economic ground in Africa to China — even with the African Growth and Opportunity Act, or AGOA. He noted that since many AGOA users make purchasing decisions two years in advance, “we should not leave them in uncertainty by waiting to decide on the programmer’s future next year”.
In 2023, United States President Joe Biden announced that he will be removing a few African countries from duty-free access to the US namely Uganda, Gabon, Niger, and the Central African Republic (CAR). US data shows that Uganda exported goods worth $174m to the US in 2022. The US government indicated that it was considering removing Uganda from AGOA and introducing sanctions on the country after it passed a controversial anti-homosexuality law.
In August 2023, Ugandan President Yoweri Museveni banned the importation of second-hand clothes, a move thought to target the US, which is a major supplier of used garments to Uganda and other African countries. In the same year, Uganda strengthened cooperation with China resulting in significant economic growth, reaching $1.3 billion by the end of 2023.
The duty-and quota-free access to the US market granted by AGOA has helped boost trade and investment between sub-Saharan Africa and the US. Many of the qualifying African countries recorded specific success in goods exported under AGOA to the US. These include textiles and apparel from Kenya, Ethiopia, Mauritius, Lesotho, Ghana and Madagascar.
In Kenya, apparel sales have grown by 67.6 % of the country’s total exports. With growing sentiments of a possible BRICS membership for Kenya, the country could lose access to the US market. But some African countries lost the lucrative market in 2022 – Ethiopia, Mali, and Guinea’s contracts were terminated by US President Biden’s administration due to various actions including coups.
Some economists have argued that decision saying the US must stop punishing investors for the mistakes of governments. What the Biden administration didn’t count on is the fact that African countries are no longer helpless and are turning to Russia and China for help. In 2022, export deals under AGOA made up 21% of South Africa’s exports to the US.
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