‘US-African trade lagging despite free market access’

Trade between the US and sub-Saharan Africa is in the doldrums despite a 2000 US law designed to boost access to the US market, a conference on the African Growth and Opportunity Act (AGOA) has shown.

AGOA, which in 2015 was extended to 2025, provides tariff-free access on 6,500 products to 39 countries, ranging from oil and agricultural goods to textiles, farm and handicrafts.Trade quadrupled in value from 2002 to 2008, a year when it reached $100bn, but fell back in 2017 to $39bn, according to figures compiled by the US Agency for International Development (USAID).

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The surplus is widely in Africa’s favour, but most exports to the US are in oil or petroleum-based products, not the industrialised goods that provide a value-added boost to local economies.With six years to the expiration of the extended African Growth and Opportunity Act (AGOA), the United States has expressed concerns about the performance of the scheme, stating that petroleum products continued to account for the largest portion of AGOA imports, with a 67% share.

Indeed, the Assistant U.S. Trade Representative for Africa, Constance Hamilton stated that AGOA has not led to the trade diversification for which the US originally hoped.

On Nigeria’s performance under the scheme, Hamilton said: “I think that Nigeria has not taken advantage of AGOA because they send us mainly oil, so in a certain extent, they actually are taking advantage of it—probably more than some of the other countries—but it is petroleum. And oil doesn’t really create the kind of jobs or other benefits from trade that I think that countries are looking for.

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