Winners So Far In The African Growth Opportunity Act (AGOA)
The 18th African Growth Opportunity Act (AGOA) Forum, hosted August 4-6, 2019 in Abidjan, Côte d'Ivoire, once again reminded Africa to take advantage of AGOA as much as they can. This US trade program presents immense opportunities to African exporters. Under AGOA which was extended through 2025, African traders can export duty free products, including over six-thousand types of goods, to America.
In order for your country to enjoy the benefits of AGOA, it must comply with certain human rights and free trade requirements. These include,among others, the provision of adequate intellectual property (IP) protection, respecting international labor laws and providing the US with reasonable and equitable market access. The president of the U.S determines eligibility using a set of rules set in a process that involves out-of-cycle reviews responding to public petitions as well as annual public hearings. The AGOA program also has adjacent civil society and private sector meetings and an annual forum that contains high-level government officials meetings.
AGOA Success Stories
US imports from South Africa grew from 3.5 billion USD in 2001 to about 8 billion USD in 2017. One industry, in particular, that has really taken advantage of the AGOA benefits is the automotive industry. In fact, it has grown to be one of the greatest success stories in the program’s history. The automotive industry in South Africa has capitalized fully on the advantages AGOA has to offer, such that the country is currently one of the key players in the global automotive industry. This was underpinned by a considerable investment by both BMW and Mercedes Benz, who enjoy duty-free access into the United States market for automobiles manufactured in South Africa.
Mauritius, Madagascar, Lesotho and Kenya have been exporting the most apparel to the US under AGOA. In 2017, they accounted for almost ninety percent of all the apparel exports under AGOA. Increased AGOA apparel exports have also helped lead to employment opportunities and improved productivity. For example, the UAL Apparel factory, in Kenya, is a leading AGOA exporter and supplies huge retail operations, including to the likes of H&M and Levi Strauss. Since AGOA was extended in 2015, thousands of jobs have been added to UAL and the company currently employs over ten thousand Kenyans.
The citrus export industry is another AGOA success story, with the program particularly enabling the Western Cape, in South Africa, to become among the largest citrus exporters to the United States. The Western Cape has a diverse variety of products they export to the US in recent years. In 2018, top exports included boats, wine, citrus, engine components, jewelery, steel and cosmetic products. The citrus industry in South Africa can credit its success to the market access opportunities AGOA offers and has managed to support over eighty thousand jobs.
Since AGOA’s enactment in 2000, it has been at the center of United States commercial agreement and economic policy with Africa. It has helped beneficiary member states both diversify and expand their exports to America. AGOA has helped alleviate poverty as well as helped boost economic growth in many parts of the continent. Furthermore, it has helped improve quality and capacity in many industries in Africa through minimum quality requirements for exports.