How AGOA has transformed U.S-Africa trade ties

The Africa Growth and Opportunities Act (AGOA) has played a significant role in transforming US-Africa trade ties, as highlighted by Florizelle Liser, President and CEO of the Corporate Council on Africa. Since its inception, AGOA has not only changed the focus of the relationship between the United States and Africa but has also tripled the amount of trade between the US and AGOA eligible countries. In a recent interview with CNBC Africa's Onyi Sunday, Liser provided insights into the impact of AGOA on trade and investment in Africa, shedding light on both the opportunities and challenges that lie ahead. AGOA, legislated as part of a bill, mandates an annual meeting between African trade ministers and US government officials at the highest levels, fostering a platform for dialogue and collaboration. The act's significance lies in its shift from a focus on aid and development assistance to trade and investment, catalyzing a threefold increase in non-oil exports from Africa to the US. While AGOA has undoubtedly benefitted Africa by creating jobs and attracting investment, Liser acknowledged that the continent has yet to realize the full potential of the agreement before its expiration in 2025. The 10-year extension granted by the US Congress in 2015 has spurred investments in the region, signaling a vote of confidence in AGOA's long-term prospects. However, challenges persist, as evidenced by recent tensions over the import of used clothes from the US by certain East African countries. The clash between upholding trade agreements and safeguarding local industries underscores the delicate balance required in navigating AGOA's provisions. Liser emphasized the importance of adherence to eligibility criteria and the need for African countries to enhance their competitiveness to fully leverage AGOA's benefits. In addressing the concerns raised by local manufacturers about access to export processing zones dominated by foreign companies, Liser highlighted the presence of local businesses in these zones at various levels of the value chain. While acknowledging the challenges faced by smaller enterprises, she underscored the significance of job creation and skills transfer in driving economic growth for African nations. Looking ahead, Liser emphasized the need for African countries to maximize AGOA market access by scaling up production and improving product quality. The push for competitive products from Africa must be complemented by a pull factor, encouraging US companies to actively source from the continent. Strategic partnerships and investments in value-added processes hold the key to Africa's success in the global market. As the deadline for AGOA's expiration approaches, the next eight years present a crucial window of opportunity for African countries to capitalize on the act's benefits. By addressing supply-side constraints, promoting local content requirements, and fostering inclusive growth, Africa can position itself as a competitive player in the global trade arena. With a focus on sustainable development and economic empowerment, AGOA stands as a cornerstone of US-Africa trade relations, offering a platform for mutual prosperity and collaboration.