Browsing: African Growth and Opportunity Act

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As of 2017, the trade initiative had created over 300,000 jobs in sub-Saharan Africa, many of which were in the apparel sector.
We recently carried out a Kenya country case study on the implementation of AGOA in the 2000 to 2016 period. We found that in this period, Kenya’s total exports to the US grew by US$443.2 million (or 405 per cent) from US$109.4 million to US$552.6 million. By 2020, the figure had risen to US$569 million, with most of the country’s exports coming from eligible products.
Looked at differently, in the nine years before the trade programme (1992 to 2000), Kenya’s average annual exports to the US were US$101 million. In the nine years after (2002 to 2010), average annual exports to the US rose to US$305 million. They rose further on average to US$557 million in the 2012 to 2020 period.

Economically, Ethiopia is on the receiving end after the US government declared that the East African nation had violated the African Growth and Opportunity Act (AGOA) due to the alleged human rights violations in Tigray. This means that Ethiopia will not have duty-free access to US markets if it does not comply by January. If the AGOA privileges are removed, it would lead to an “existential threat” for Ethiopia’s manufacturing sector.
The non-compliance could have come from the publication of the joint Ethiopian Human Rights Commission (EHRC) and OHCHR report on November 3.
Ethnic violence, torture, sexual and gender-based violence, property looting, destruction of infrastructure and religious sites and violations of international humanitarian law and other human rights violations are some of the issues highlighted in the report.

At the same time, KEPSA said the initiative will provide a unique platform to facilitate U.S. and Kenyan SME partnerships.

It will also help in supporting women and youth to run Kenyan entrepreneurs as well as U.S. women, minority, and diaspora owned businesses, and help SMEs in both countries address the current challenges many faces to access the two markets.

The agreement was signed by CCA President & CEO Florizelle Liser and KEPSA CEO Carole Kariuki and witnessed by President Uhuru Kenyatta in New York, U.S.A.

afcfta africa

With these kinds of benefits, the AGOA has to be improved to align with the demands of the AfCFTA. In February 2020, the US and Kenya signed the first of a kind trade agreement between the United States and a Sub-Saharan African (SSA) country.

The FTA represents the most significant innovation in US-African trade relations since the enactment of AGOA and if successfully concluded, the FTA would undoubtedly signify an important shift in US trade policy in the region.

With the reality that competition for business in Africa is heating up, the FTA is a crucial issue which the Biden administration and Congress must grapple with especially now that the AfCFTA has been operationalised. On the other hand, Africa must be wary of any external forces that would disintegrate the AfCFTA in the guise of doing business with individual countries.

A report launched in April 2021 on the US-Kenya trade negotiations analysing the implications for the future of the US-Africa trade relationship shows that if successful, the FTA would represent the most significant innovation in US-African trade relations since the enactment of the African Growth and Opportunity Act (AGOA) trade preference programme in 2000.

With a new administration taking over in the US following an election where Trump lost to President Joe Biden, an agreement has yet to be reached. This presents the Biden administration with a decision on whether to continue negotiations with Kenya.