- Citing ‘gross violations’ President Biden ousts Uganda, Burkina Faso, Gabon, Niger and CAR from Agoa trade deal.
- The move, which will take effect from January 1st 2024, will trigger job losses and export earnings dip.
- Biden says these countries have failed to address US concerns about their non-compliance with Agoa eligibility criteria.
Four African countries are staring at huge losses running into billions of dollars starting January 2024 following their expulsion from the African Growth and Opportunity Act (AGOA). The move will further worsen the unemployment crisis in the affected countries. Agoa offers thousands of jobs in apparels industry, especially to the youth.
US President Joe Biden will oust Uganda, Burkina Faso, Gabon, Niger and the Central African Republic (CAR) from the Agoa trade deal. In 2000, the US rolled out Agoa, a deal that provides duty-free access to the US for over 1,800 products for eligible sub-Saharan African countries.
The expulsion of the four from Agoa will significantly affect their economies, already grappling with global pressures. In 2022, US data shows CAR traded goods worth $881,000 with the US under Agoa. Consequently, Uganda recorded $174 million, Gabon $220 million and Niger $73 million in Agoa-linked trade.
“Despite intensive engagement between the United States and the CAR, Gabon, Niger, and Uganda, these countries have failed to address US concerns about their non-compliance with the Agoa eligibility criteria,” said President Biden.
Agoa ouster linked to ‘gross violations’
Biden’s move to oust the four comes ahead of this week’s 20th AGOA Forum to be held in Johannesburg. In his letter to the Congress, Biden said the decision comes following collapse of talks with the said countries. He said the US has engaged in vain with the said countries over their breach of conditions laid out under Agoa membership.
“I am taking this step because I have determined that the Central African Republic, Gabon, Niger, and Uganda do not meet the eligibility requirements of section 104 of the Agoa criteria,” said Biden.
Biden accused CAR of engaging in “gross violations of internationally recognized human rights.” He added that authorities in Bangui are “not making continual progress toward establishing the protection of internationally recognized worker rights, the rule of law, and political pluralism.”
As for Niger and Gabon, Biden said these countries, “are not making continual progress toward political pluralism and the rule of law.”
On Kampala, Biden said “Uganda has engaged in gross violations of internationally recognized human rights.” Since the signing into law of a law banning homosexuality, Uganda has been in the bad books of Washington.
In October, President Museveni reported shrinking orders for apparels from the US market. “Some of the orders have been cancelled there,” the Daily Monitor quoted Mr Museveni.
At the moment, it is unclear whether the two-month window before January 1st leaves room for appeal, or reconsideration.
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The economic impact of leaving AGOA
According to Benson Byaruhanga, an Agoa economist in Uganda “the highest record of exports” from Uganda was registered in 2017/2018. Back then, Uganda’s export earnings stood at $29.6 million.
Despite its expulsion from AGOA, it remains unclear whether Niger may still benefit from the US under the West African Economic and Monetary Union (UEMOA). This trade agreement includes Niger.
According to the Office of the US Trade Representative for AGOA, US goods exports to Niger in 2022 were $96 million, down 30.3 per cent from 2021. US imports from Niger totaled $73 million in 2022, down 22.7 per cent from 2021. The US goods trade surplus with Niger was $23 million in 2022, a 47.1 percent decrease ($20 million) over 2021.
In troubled CAR, US exports to the country last year were $23 million, up 30.4 per cent ($5 million) from 2021. The US goods trade surplus with the CAR was $22 million in 2022, a 39.3 per cent increase ($6 million) over 2021.
Also Read: Economic threat looms in Niger amid coup d’état
South Africa to host AGOA 20 Forum
South Africa’s President Cyril Ramaphosa is expected to host US delegation at the AGOA 20 Forum on 2-4 November 2023. The US delegation will be led by the US Trade Secretary Ambassador Katherine Tai.
“The AGOA Forum serves as a vital platform for the United States to build on the success of the Africa Leaders’ Summit and further enhance the economic partnership with African states, under the aegis of the United States’ African Growth and Opportunity Act that was approved by the US Congress in May 2000,” announced South Africa’s Presidential Spokesperson Vincent Magwenya.
During the Forum, the parties hold discussions on shared priorities between the US and Africa. The meeting will explore opportunities to make AGOA more transformative and as a platform to deepen trade and investment relations.
“Participants will delve into conversations about strengthening trade and investment ties between the US and Sub-Saharan Africa with a focus on promoting resilient, sustainable, and inclusive economic growth and development,” he explained.
The spokesperson underscored that AGOA is a key driver of economic growth and development in Africa. He pointed out that African nations will be looking to extend AGOA beyond 2025.
“This extension will further support the African Continental Free Trade Area, covering 54 countries and 1.4 billion people,” Magwenya said.
Agoa’s ‘most favoured nation’
Notably, in 2022, South African exports under AGOA’s ‘Most Favoured Nation’ system accounted for the largest share and export value of the country’s total exports to the US market.
Trade under Agoa accounted for 21 per cent of South Africa’s total exports to the US in 2022. This was an increase from $2 billion in 2021 to $3 billion in 2022. In South Africa, Agoa’s ‘most favoured nation’ the trade deal accounts for 62,395 jobs.
“AGOA exports represented 21 per cent of total South African exports in 2022, up from 13 per cent in 2021,” he said
Read also: AfCFTA sounds the death knell for AGOA
