President Cyril Ramaphosa delivering a keynote address on the second day of the 20th Agoa Forum.
PHOTO: GCIS
President Cyril Ramaphosa has called for the early renewal of the Africa Growth Opportunity Act (Agoa) as well as for this programme to be extended for longer than the current 10 years.
Agoa is a non-reciprocal tariff preference regime that allows 35 sub-Saharan countries to export certain goods to the US without tariffs. It’s a unilateral act of the US Congress that benefits these African countries.
In 2021, around billions worth of goods were exported under the Agoa treatment. As the discussions were under way at Nasrec in Johannesburg, African countries were seeking even more favourable terms, including a longer term, and to include medium and smaller enterprises that’d previously not benefited.
The key message from African countries is to have Agoa renewed earlier than September 2025. In 2015, the extension of South Africa’s participation in Agoa was signed at the last minute, and Africa wants to avoid that uncertainty.
Speaking on the second day of the three-day Agoa Forum, President Ramaphosa said:
An early renewal can also help to strengthen trade and investment, a process that the continent needs greatly in order to improve the lives of its 1.3 billion people. At the same time, we see potential to enhance the lower forms that will add more products and make it easier for small and medium-sized businesses to use them.
“The legislation has helped to promote manufactured exports into the US, but so much more can be done. The early re-authorisation of the renewal of Agoa with a particular focus on how Agoa can be improved will help to ensure that the Agoa legislation achieves its objectives and reaches its full potential,” he added.
READ: South Africa pushes for early renewal of Agoa
Ramaphosa said in the two decades of the existence of this opportunity, it has been under-utilised and encouraged more African countries to take advantage of Agoa. He said while the programme had substantially improved, the export of certain products from the continent more can be done.
“While the legislation’s unilateral trade preferences have provided economic benefits for countries across Sub-Saharan Africa as a whole remains underutilised, I hope that in your discussions today. We will explore ways and means by which we can fully utilise this great opportunity.
Africa is an important source of critical raw materials, but we do not want to be defined as simply the producers of commodities. The great industrial opportunity lies instead in the transformation of rock and metal into the sophisticated industrial and consumer goods that societies across the world need
FOR THE LONG HAUL
Ramaphosa also called on the United States to extend Agoa for longer periods to provide more certainty for African exporters. He said a long period for Agoa would act as an incentive for investors to build new factories on the continent.
We can do more if this opportunity is extended, and we can build more capacity if we have certainty. Shorter periods of extension impede investment ambitions, and we, therefore, want to see a much longer period of extension between the United States and Africa.
“We are here for the long haul, so let us make a long haul opportunity. We believe there is great value in retaining all beneficiary countries to build on the emerging regional value chains that are making a significant contribution to the industrialization of the African continent.
“A more targeted effort to promote greater levels of investment can help to unlock goalless opportunities and proposition.
“We do, however, remain concerned about the negative effects that trade restrictions on products like steel, aluminium or citrus fruit have on our YouTube utilisation rates,” he added.
FRAGMENTATION
Secretary-general of the African Continental Free Trade Area(ACFFTA) Wamkele Mene is concerned about the fragmentation that may be caused as countries in the north of Africa are excluded from Agoa, including four countries that have now been booted out from benefiting from Agoa. This week, Gabon, Uganda, Niger and the Central African Republic were struck off the list of Agoa beneficiaries for being non-democratic and violating human rights
Mene said: “If we are not able to resolve this question of fragmentation that is potentially created, I say potentially, where there are countries in North Africa for example, that are not part of Agoa. That is something that may be an obstacle.
I don’t think it’s really a political issue, it’s a technical issue about how we make that legal technical alignment between the rules of the AFCFTA and countries that are not eligible
“You would have heard ministers of trade, expressing a view that this needs to be relooked at and of course, I don’t want to go into those details because we as the AFCFTA are not involved.
“But we are taking measures to make sure that the continued implementation of Agoa supports industrial development, supports regional integration and supports the objectives of the AFCFTA,” he said.
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