Africa urges US to make AGOA permanent

Aug 19, 2009

Early this month, the 8th African Growth and Opportunity Act (AGOA) forum was early this month held in Nairobi, Kenya under the theme “Realising the Full Potential of AGOA through Expansion of Trade and Investment.” The forum focused on a number of cr

Early this month, the 8th African Growth and Opportunity Act (AGOA) forum was early this month held in Nairobi, Kenya under the theme “Realising the Full Potential of AGOA through Expansion of Trade and Investment.” The forum focused on a number of crucial trade and economic issues, including but not limited to how countries can take full advantage of the range of export opportunities that AGOA offers.
Paul Busharizi and James Odomel talked to Susan Muhwezi, the special presidential assistant on AGOA and other trade matters who was part of the team.



QUESTION: Briefly tell us about the forum?
The forum was held between August 4 and August 6. It was officially opened by the US secretary of state, Hillary Clinton and President Kibaki of Kenya.

The emphasis was of course to still say that it was one of the most significant initiative that has been given to sub-Saharan Africa.

The issue is if Africa has used it to its full potential and I think this came out very clearly but we have not actually used it as AGOA.

Under AGOA, we are supposed to export up to a tune of 6,900 products but Africa has only managed to export 60.

Why do think Africa has failed to achieve this?
But it has not been entirely our faults that we are failing, but both the US and Africa are responsible. Of course, Africa has its own challenges in trying to meet the AGOA expectations. First of all, we have the problem of infrastructure.

Our own districts and regions are not connected so how do we begin even to bring products if we can not bring them to say from Kabale or northern Uganda to the city centre to be transported to Mombasa port.

The other problem is that we have had problems with resources, capacity building in agriculture, research, training and product development. This has been a major challenge because yes; the US gave us this initiative to export 6,900 products but what did we have on the ground?

We are an agricultural country but did not have our farmers trained or researched on our products. All this are things that we as Ugandans look at. Before the opening, we had a ministerial meeting where we discussed and found out that we actually have common problems.

One of the issues that came up strongly was infrastructure development and the capacity building. Also, the energy issue is a big cost in doing business in Africa.

Could the forum have realised a weakness from the US side?
Yes. On the US side, AGOA is not a permanent initiative so it is so hard to attract investors from the US.

That is why we were urging the US to give its private sector tax incentives so they can come and invest in Africa because which investor will accept to come to Africa when AGOA is going to expire? Because even if you to put your money in Uganda.

We are urging the US to make AGOA permanent or at least give it a longer period to allow benefiting countries to first build their capacities and industries.

For Uganda’s textile industry, we do not have a backward linkage where you have a spinning mill. A situation where you grow cotton, spin it and then make cloth.

But apart from the US, do we trade with each other?
There are trade barriers between all African countries. So we were saying let us not concentrate on trading with the US but can we trade with Zambia?

There are trade barriers even with the East African Community. All this sometimes compete. We have to first learn to expand our own intra-regional trade before we even think of accessing the American market.

And why would a person from the US want to come all the way to buy something that is so expensive here when he can get from Mexico?

Those were some of the issues that we were discussing.

At the end of the forum did the African countries make some recommendations to make to the US that they should consider?

We recommended the extension of AGOA and making it permanent. We also urged the US to stop the subsidies that it gives to its farmers especially on cotton because that does not make us competitive at all with the American farmers.
The other was extending of AGOA fabric provision beyond 2012. We also agreed that as Africa to set clear targets and benchmarks with measurable indicators and also with an institutionalised mechanism for each forum to monitor and track progress.

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