African Nations Hope to Benefit From Renewed US Legislation

August 26,2015

The United States and African nations hold the first conference this week in Gabon on the African Growth and Opportunities Act since Congress recently renewed a zero tariff deal for another 10 years. African nations hope to better exploit preferential access in the future - most analysts say AGOA has been under-utilized.

Exhibitors at the AGOA forum in the Gabonese capital, Libreville, are ready to take full advantage of exporting their products into the U.S. tax free. U.S. Assistant Secretary of State for African Affairs Linda Thomas-Greenfield is attending the forum and said more countries can benefit from AGOA.

“We are working with those countries through our trade hubs and through consultations with American companies and trade ministers to try to increase the productivity of companies that are exporting to the U.S. to increase the quality of the products that they are increasing,” said Thomas-Greenfield.

She said it is a long-term process and won’t happen overnight. While this is an exciting time for the Gabonese leadership, the average person in Libreville doesn’t know what AGOA is.

"Personally this is the first time I am hearing about AGOA," said one local.

Another resident expressed hopes young entrepreneurs like him can get help.

"It’s always been difficult because banks around here do not give us loans or help us in any way. They don't take chances on us so [I] hope AGOA can help us with a solution," said Ahmed Mikalal, a resident of Libreville.

Few African economies have taken advantage of the U.S. trade initiative. Dumile Cele, the Durban chamber of commerce chief executive, said the trade partnership has helped advance South Africa's manufacturing sector.

"South Africa has been able to grow the export of besides the citrus which are agricultural goods, besides those we have been able to export an enormous amount of vehicles, parts into the U.S.A. market,” said Cele.

But Witney Schneidman, a non-resident fellow at the Brookings Institution, noted that there have been some disparities.

“South Africa exports about $4 billion worth of products to the U.S. under AGOA, and I don’t think there’s another country that reaches a billion dollars. So I think it’s really a challenge for the U.S. and for all AGOA beneficiaries to figure out how to take better advantage of the legislation,” Schneidman said over Skype.

But while economies of countries like South Africa have grown, other African leaders have said their countries lack the skilled labor and infrastructure to take advantage of it.