US-Africa trade lagging despite free access

AGOA has not led to the trade diversification hoped for, a US trade representative told a forum in Ivory Coast this week.

08 August 2019 | Economics

I do not think that AGOA has been the game-changer for many countries on the continent that we hoped it would be. - Constance Hamilton, Assistant US trade representative for Africa

Trade between the United States and Sub-Saharan Africa is in the doldrums despite a 2000 US law designed to boost access the American market, a conference in Ivory Coast has been told.

The African Growth and Opportunity Act, which in 2015 was extended to 2025, provides tariff-free access on 6 500 products to 39 countries, ranging from oil and agricultural goods to textiles, farm and handicrafts.

The latest data supplied by the Namibia Statistics Agency (NSA) shows Namibia exported N$670 million worth of goods to the US in the first quarter of 2019, up 135% from the same three months in 2018.

This made the US Namibia’s tenth biggest export market in the first quarter. By comparison, exports to China – Namibia’s biggest market in the quarter under review – exceeded N$5.4 billion.

Namibia imported N$450 million worth of goods from the US in the first quarter, a drop of 31% compared to the same quarter last year.

AGOA

US-Africa trade quadrupled in value from 2002 to 2008, a year when it reached US$100 billion, but fell back in 2017 to just US$39 billion, according to figures compiled by the US agency USAID.

The surplus is widely in Africa's favour, but most exports to the US are in oil or petroleum-based products, not the industrialised goods that provide a value-added boost to local economies.

"I do not think that AGOA has been the game-changer for many countries on the continent that we hoped it would be," Constance Hamilton, assistant US trade representative for Africa, told the 18th AGOA Forum, ending in the Ivory Coast's economic capital Abidjan on Tuesday.

"AGOA has not led to the trade diversification for which we originally hoped," she said in remarks on Monday.

"Petroleum products continued to account for the largest portion of AGOA imports, with a 67% share," Hamilton said.

"And the volume of AGOA trade remains modest. In the AGOA clothing sector, for example, we get about US$1 billion per year from Africa," he said, adding that this amounted to just one percent of all US clothing imports.

The United States is Africa's third biggest trade partner after the European Union and China. But Africa attracts only about one percent of all US foreign investment.

Deputy US trade representative Curtis Mahoney said Washington had drawn up a "variety of new initiatives" to "lay the groundwork for an even closer trade and investment partnership".

AfCFTA

"We will combine the promise of the AfCFTA with these new US initiatives and help maximise the potential of US-Africa trade," he said.

The AfCFTA - the African Continental Free Trade Area - is a scheme for demolishing trade barriers among the 55-member African Union.

The long-negotiated agreement was ceremonially launched at a summit in July, but will need a year to become operational, the AU says.

According to the conclusions of a pre-forum meeting of ministers ahead of the Abidjan conference, only 18 out of 39 countries have set down a national strategy for exploiting the benefits of the AGOA.

Many African companies either do not know of the advantages that are on offer, or they do not know how to use them, the ministers found.

Prosper Africa

In July, US ambassador to Namibia, Lisa Johnson, introduced the local media to Prosper Africa, the US government’s initiative to sustainably increase two-way trade and investment between the superpower and Africa.

Johnson said Prosper Africa will help advance Americans and Africa prosperity and security, supporting jobs and demonstrating superior value of transparent markets and private enterprises for driving growth.

“With six of the ten fastest growing economies in the world and over one billion consumers, Africa is poised to play a pivotal role in the global economy. Meanwhile, producers in Africa see a US consumer market of more than 300 million people that already has purchasing power of US$300 trillion; the largest in the world,” she said. - Own report and Nampa/Reuters

Similar News

 

Price monster hungry

1 day - 14 August 2020 | Economics

Although annual overall inflation in Namibia last month stayed unchanged at 2.1%, annual overall food inflation increased to 6.2% - up from 4.9% in June...

Over 1000 job losses in Erongo

1 day - 14 August 2020 | Economics

High levels of unemployment in the Erongo region remains an issue, exacerbate by the current Coronavirus pandemic, with over 1000 job losses between April and...

Over 1000 job losses in Erongo

1 day - 14 August 2020 | Economics

High levels of unemployment in the Erongo region remains an issue, exacerbate by the current Coronavirus pandemic, with over 1000 job losses between April and...

Japan assists in alleviating hunger

1 day - 14 August 2020 | Economics

Japan’s Ambassador to Namibia, Hideaki Harada visited the Kavango east region on to witness how his country’s contribution to Namibia’s drought response plan is aiding...

Mauritius tourism now hit by oil spill

1 day - 14 August 2020 | Economics

Tourist operators in Mauritius fear that an oil spill from a Japanese ship will further damage their businesses, already reeling from the coronavirus epidemic, and...

Erongo constructs 2 287 houses

1 day - 14 August 2020 | Economics

The Erongo region has in the financial year 2019/20 constructed a total of 2 287 houses of the 60 000 houses envisioned for the region...

Food inflation heats up

1 day - 13 August 2020 | Economics

Jo-Maré Duddy - Although annual overall inflation in Namibia last month remained unchanged at 2.1%, annual overall food inflation increased to 6.2% - up from...

Britain hit by record recession in Q2

2 days ago - 13 August 2020 | Economics

Britain's economy contracted by a record 20.4% in the second quarter with the country in lockdown over the coronavirus pandemic, official data showed yesterday.“It is...

Nam haemorrhaging jobs

3 days ago - 12 August 2020 | Economics

Jo-Maré Duddy – The impact of Covid-19 and the ongoing recession claimed 5 748 jobs in the three months to the end of June.This is...

Land surveying starts at Okahandja

3 days ago - 12 August 2020 | Economics

The ministry of urban and rural development has started the land surveying process at Ekunde Extension 5 in Okahandja in efforts to speed up land...

Latest News

Thought leadership

1 day - 14 August 2020 | People

NDANGI KATOMAIn a very short time, the coronavirus has changed so much about our lives.It is easy to think you’ll never get ahead when you...

Marketing through the lens of...

1 day - 14 August 2020 | People

ESTER KAMATIAs part of the DOLOLO group of entrepreneurs and a 2019 alumnus of the Africa Pathfinders Leadership initiative, Andreas Elifas’s objective is to attain...

Price monster hungry

1 day - 14 August 2020 | Economics

Although annual overall inflation in Namibia last month stayed unchanged at 2.1%, annual overall food inflation increased to 6.2% - up from 4.9% in June...

Tough times for mines in...

1 day - 14 August 2020 | Business

Jo-Maré Duddy – Of the 16 operating mining companies included in the latest annual review of the Chamber of Mines of Namibia, six last year...

Fishing quota auction storm grows

1 day - 14 August 2020 | Fishing

OGONE TLHAGEWINDHOEKGovernment's decision to auction off its fishing quota, and then use the proceeds to finance its efforts to fight the Covid-19 pandemic is continuing...

Samherji begs for release of...

1 day - 14 August 2020 | Fishing

OGONE TLHAGEWINDHOEKIcelandic firm Samherji, which is at the centre of the Fishrot bribery scandal, has asked Namibian authorities to release its fishing vessel Heinaste, which...

Education kneecapped by shortage of...

1 day - 14 August 2020 | Education

KENYA KAMBOWERUNDUEducation minister Anna Nghipondoka says Namibia has a backlog of over 5 000 classrooms, which has made it a challenge to comply with the...

Growing hip-hop in the north

1 day - 14 August 2020 | Art and Entertainment

MICHAEL KAYUNDE WINDHOEKSkipper Wills' breakthrough came in 2017 when he was selected to take part in the Old & New hip-hop documentary. He has since...

Kay-Z Bearens on his 2020...

1 day - 14 August 2020 | Art and Entertainment

MICHAEL KAYUNDE WINDHOEK Rapper Kay-Z Bearens released his first single in 2015, and though on the underground scene, he's pushed his music over the years.In...

Load More