Can AGOA solve Africa’s problems?

HABARI DAILY I Kampala, Uganda I Since the year 2000 when the African Growth and Opportunity Act (AGOA) was instituted to give eligible African countries exemption from taxes on their exports to the US, its achievements have been hard to come by.

In my express opinion, there is an urgent need for the trade arrangement to be updated if it is to address the topical challenges faced by African economies.

One of the most outstanding concerns is the eradication of red tape to enable small businesses to trade. Most of these firms do not have their books of accounts in order neither do they have expertise to process the exports permits. This exposes them to sharks who siphon hundreds of dollars out of them.

But I completely disagree with the school of thought that front the view that the trade pact needs a complete overhaul. In my view, only a few outstanding technical aspects need to be readjusted.

Although this US piece of legislation gives more than 30 African states preferential access to the lucrative US market for almost 2,000 products, the myriad sheets of bureaucracy are such that very few African entrepreneurs are benefiting. 

US Trade Representative Katherine Tai alongside South African Minister of Trade, Industry and Competition Ebrahim Patel

If the US administration is fair enough, they should make this market access open to all African countries without discrimination. Most countries that have been left out due to excuses such as their connection to terrorist organisations are the ones that are swimming so much in poverty and need urgent economic empowerment.

What is the importance of empowerment if it’s only the strong that are empowered and the weak are left to their cold torment?

That said, rampant corruption in processing of permits has remained a massive threat for doing business with the US.

I can therefore confidently say that it was only after 23 years that the economic benefits of the AGOA arrangement are beginning to show, especially in the agriculture and automotive sectors.

On whether AGOA is the kingpin that can solve the mountain of Africa’s problems, I won’t even be tempted to buy into this line of thought. My belief is, it is high time the African Union started negotiating for preferential trade pacts with the outside world as a block.

I must commend the US administration that went out of its way to do what the AU should be doing – negotiating for market access as a block for all its members. For this reason, pacts such as AGOA have left the most deserving African countries out in the cold.

In signing off, I would like to add my voice to thousands of advocates who are calling for extension of AGOA by another 10 years when it expires in 2025

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