The Africa policy community in Washington is abuzz with debate over the future of trade relations between the United States and sub-Saharan Africa.
Early in June, the U.S. and African trade ministers and business leaders will be meeting in Lusaka at the 10th summit of The African Growth and Opportunity Act (AGOA) forum. AGOA is a law enacted under President Bill Clinton in 2000 and enhanced by President George Bush in 2005 to increase U.S. trade with, and investment into, sub-Saharan Africa. This law is set to lapse in 2015.
AGOA has allowed for some impressive statistics. African exports to the United States increased from $23 billion to $81 billion between 2000 and 2008. Up to 300,000 new jobs were created in the 37 eligible countries. American foreign direct investment more than doubled to $14 billion. Duty waiver on 6,400 products has opened opportunities for many small African businesses into the U.S. market. Knowledge about the American consumer has been spread across Africa like never before.
Through the Millennium Challenge Corporation and USAID’s Global Competitiveness Initiative $3.3 billion has been spent addressing capacity and compliance problems identified by and for African traders.
Democracy and anti-corruption demands have had some African kleptocrats think twice before raiding the public kitty.
With results like these, many friends of Africa are asking for more of the same. Avoid uncertainty, they say. Let acquired experience deepen trade. Open more regional competitiveness hubs. Get more countries on the challenge account. Reduce domestic subsidies for more African penetration of the market. Do not forsake Africa when China is at the door. Yet a closer look shows some worms in the apple. And the debate gets juicier.
Over 70 percent of the African exports to the United States are oil and gas from Nigeria and Angola. Agriculture, which is the engine of African economies and the locus of poverty accounts for $1.4 billion of total AGOA exports, a mere 1 percent of total U.S. agricultural imports. And 85 percent of this originates in South Africa alone.
Textiles and apparels blossomed early realising $1.7 billion exports in 2004 before opening the U.S. market to India and China saw African exports drop to $900 million by 2009.
In Kenya, factories making clothes under AGOA declined from 47 to about 20 in the same period. This is set to get worse when permission to import cotton and yarn from non-AGOA countries is lifted in 2012, and subsequently when Bangladesh and Indonesia are allowed AGOA-like access. Bangladesh, by the way, exports more clothes to United States than all of Africa combined — before the field is levelled.
The Lusaka meeting is an opportunity for Africa to present its narrative. No doubt AGOA has had its positive contributions. Market opportunities have been identified. Solidarities have been forged. Trade facilitation work like the USAID support for easing cross border cargo movement in East Africa will remain a hallmark of sound direction.
But Africa must think outside the box. The sense that the United States means well for Africa has been received. How to optimise this solidarity is the challenge. AGOA is a well-intentioned American law. Still, a unilateral gesture with arbitrary rules must give way to a negotiated engagement with clear time indicators and user-identified points of facilitation.
Africa’s long term interests lie in disciplining trade to serve economic and governance development. The United States has shown a willingness to walk this path with us. But they need our assistance in making it our walk. The slowing train of regional integration needs to be reinforced. Intra-Africa trade is the nursery of sustainable international involvement. Our transport infrastructure has to be overhauled.
Beyond 2015, Africa needs a predictable path to unlock her potential without debasing the environment that has nurtured us. We must fashion a pact where the heroic pursuit of liberty and indefatigable belief in the triumph of innovation, hallmarks of the American psyche, can embrace the resilience of the African spirit and the universality of human intelligence to help Africans claim a seat at the table of prosperity.
This is a narrative where market access is only a component in a mosaic of human solidarity founded on genuine dialogue and mutual respect. But Africa must speak, not wait to react.