This week our feature series focuses on the African Growth and Opportunity Act, AGOA. Tonight we ask: Is it successful so far? AGOA is built around the idea of less aid, more trade. It became a US law six years ago, offering incentives such as reduced tariffs to African countries that move toward opening their economies and building free markets. Stephen Hayes is the president of the Corporate Council on Africa (CCA), an enthusiastic supporter of AGOA. He says the beneficiaries include oil-producing countries such as Nigeria, Angola and Gabon and apparel and textile producers such as Lesotho, Mauritius, Madagascar and Kenya. VOA English to Africa reporter Cole Mallard reached him in Washington to find out just how effective AGOA is overall.
Hayes says, “AGOA has been one of the most important acts passed between the US and Africa and, I think, in some ways successful…. [Its] intention originally was to expand trade between the United States and Africa and find ways that would increase the buying power of Africans.” But he says it’s been carried out “somewhat simplistically.”
For example, the textile and apparel trade in Africa came originally from China and other Asian countries. It provided jobs for Africans, but when the Multi-Fiber Agreement (requiring that the fibers used be primarily from Africa) expired in 2004, many of the companies left the continent. He says reducing the textile trade in this way left little in the way of alternatives. Hayes says before the expiration of the Multi-Fiber Agreement, AGOA had helped Africa by creating jobs – 90 thousand in South Africa and about seven thousand each in Lesotho and Mauritius.
Hayes says AGOA has been a great stimulant and can be even greater by helping Africa develop its infrastructure, “which will allow them to move products more readily to the US market.” He also said AGOA needs to help create more financing for American and African companies on the continent. The CCA president says AGOA, along with such acts as the Millennium Challenge Account, which works through the Millennium Challenge Corporation, should take a more comprehensive “and a far more realistic look at Africa” in order to reach the ideals that AGOA represents.
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