US President Joe Biden has removed four African countries from the Agoa deal over ‘gross violations’. File Picture: IOL
The African Growth and Opportunity Act (Agoa) summit between South Africa and the US and its beneficiaries will take place in November.
But what is Agoa? How will it impact South African investment in the country?
Agoa, according to the US government, provides duty-free treatment to goods from designated sub-Saharan African countries.
The Act trade initiative was passed in 2000 under former president Bill Clinton. His aim was to create a deeper trade tie with Sub-Saharan Africa and help African countries develop their economies.
The programme was started in the early 2000s and “has the goal of promoting economic growth through good governance and free markets”.
It covers non-textile as well as textile goods and was most recently re-authorised through September 30, 2025.
According to the US trade representative office, Agoa provides sub-Saharan African countries that are eligible for duty-free access to the US market for over 1,800 products; in addition, the act allows “more than 5,000 products that are eligible for duty-free access under the Generalised System of Preferences programme”.
One study, according to Reuters estimated that Agoa has created around 350,000 direct jobs 2001 to 2011.
The summit will take place in Johannesburg, South Africa, from November 2 to 4.
The forum will bring together representatives of the United States and South Africa with regard to trade and investment. Moreover, the summit will also bring in “key regional economic organisations, the private sector, civil society, and labour”.
According to a joint statement by the US and South Africa, the summit will allow participants to “engage in discussions on how to strengthen trade and investment ties between the United States and sub-Saharan Africa and how to promote resilient, sustainable, and inclusive economic growth and development”.
The summit will also feature the ‘Made in Africa Exhibition', which will showcase regional value chains on the continent.
Landry Signé, a senior fellow at the Global Economy and Development, Africa Growth Initiative, said that Agoa has “certainly helped boost African exports to the United States.”
Based on the data, Signé raises some issues or questions on why some countries are better at taking advantage of this “preferential access to US markets”.
“I found that policy implementation theory — specifically, the ability to bridge the gap between policy intentions and desired outcomes — helps explain this variation and points a way to bridge the gap between high and low performers going forward,” Signé said.
According to his research, Kenya and Lesotho have had some of the highest Agoa utilisation rates.
Signé said that 88% of Kenyan exports and 99% of Lesotho’s exports to the US have qualified for zero-tariff treatment. These two countries send a large amount of apparel products.
It should be noted that according to Signé, “almost half of all beneficiary countries had a utilisation rate of 2% or lower during the same time period — this means 98% of US imports from those countries were subject to US tariffs”.
EXPULSIONS
On Tuesday, it was announced that Gabon, Niger, Uganda and the Central African Republic would be removed by the US from Agoa.
President Joe Biden said that these nations would be removed over their "gross violations" of human rights by the Central African Republic and Uganda.
According to Reuters, Biden felt that Niger and Gabon failed to protect political pluralism and rule of law between those two states.
IOL News