The Deputy Chairperson of the African Union (AU) Commission has said
all Sub-Saharan African countries should be eligible to export to the United
States under the Africa Growth and Opportunity Act (AGOA).
First enacted into
law in 2000, AGOA is the U.S. trade and investment policy that provides trade
preferences to designated African countries that are making progress in the
areas of economic, political and human rights.
Deputy AU Chairperson Erastus
Mwencha also said Africa would like for AGOA to be made more permanent and the
criteria for eligibility more transparent and predictable.
The Seventh annual
AGOA review meeting concluded Wednesday in Washington.
State Condoleezza Rice, who addressed the forum for the last time, said because
of AGOA Africa’s wealth grew 7 percent in the past year and that non-energy
trade between the United States and AGOA countries has doubled since 2001.
Mwencha told VOA in Washington that Africa sees a mixed review for AGOA.
you know AGOA has been running now for eight years, and when it started, the
focus was very much hoping that it could be able to attract exports and imports
into the United States and into Africa. And the review that has taken place has
shown that yes, trade has grown, but when you look at the exports from Africa,
it’s more of textiles and garments, otherwise the bulk of it which over 90
percent is all petroleum exports from Africa,” he said.
the other hand, Deputy Chairperson Mwencha said the exports from the United
States to Africa are more balanced comprising a variety of products.
of the review issues was that Africa could do better in terms of
diversification. The meeting then agreed that we now need to start to see
what’s missing to make it a truly trade and development tool,” Mwencha said.
70 percent of Africa depends on agricultural. But Mwencha said even though
Africa has a comparative advantage in agriculture, several factors make it
difficult for Africa to export agricultural products to the United States.
are two, three reasons we are not exporting to the United States. One,
agricultural products tend to be bulky and so far it’s so difficult to organize
transport to bring products to the United States. Secondly, there are market
barriers in the United States. As you know there are sanitary regulations, and
to get a visa for export of agricultural products to the United States takes a
long time and that has discouraged Africans from pursuing that line of exports
for agricultural products,” Mwencha said.
AU Deputy Chairperson said another factor making it difficult for African
countries to export products to the United States and other developed countries
is their subsidy of agricultural products.
Mwencha said the just concluded AGOA forum in Washington took steps to address
some of Africa’s concerns.
meeting has taken a step towards agreeing that first of all AGOA should try to
identify those challenges that make it difficult for Africa to diversify its
exports. These challenges include access to technology, access to finance, and
more so investment. For instance if you look at the aspect of investment, there
is very little U.S. investment except in the oil sector,” he said.
Sub-Saharan countries are currently eligible to benefit from AGOA. Deputy
Chairperson Mwencha said the AU would like to see all Sub-Saharan African
countries eligible for AGOA.
would like to see all Sub-Saharan African countries be eligible to export here.
And that’s not all. Africa is also asking that AGOA should be more permanent,
and if it is permanent, then it’s predictable, and it should also be
transparent,” he said.
extended the first phase of AGOA to the year 2015. Mwencha said AGOA should be
made permanent because no investor is going to invest long-term in Africa for a
project that is going to end in a few years.
means enact as law to indicate that Africa would have this preferential market
access to the United States on a permanent basis,” he said.
also said the United States should make easier for more African countries to be
eligible for AGOA.
it also transparent because the criteria for eligibility could be made easier,
particularly when you are looking at business because some of the elements that
are used for a country to be eligible are non-commercial and sometimes frustrate
the business community. Imagine a business person sets up a factory to export
to the United States, for some reasons and for actions not related to business,
somebody else’s action leads them to losing that market. That doesn’t go well
for an investor to go to Africa aiming to export to the United States,” he
said African countries are taking steps under the New Partnership for Africa’s
Development (NEPAD) to improve intra-Africa trade and reduce the cost of doing
business on the continent.
transaction cost of doing business in Africa is very high. So Africa needs to
address those issues that make it difficult for goods to move within the
continent, so that we can have more intra-African trade,” he said.
what some see as the increasing inroads China is making in Africa, AU Deputy
Chairperson Mwencha said it is a misconception to say that China is making
inroads in Africa.
“China has been and always a friend of
Africa for quite some time. If you look at the struggle for independence, China
was there to support many of the African countries to fight against colonialism
and apartheid. China has also been in Africa doing social programs and even
investment in textiles, and in railroad. So China is not making inroads. Even
at the time when China was extremely poor, China was willing to share the
little she had with Africa,” Mwencha said.