US trade deal brings mixed success to Africa

In a corner of Maseru’s shabby industrial zone, workers at the Shining Century factory cut and sew bolts of billowing maroon and navy blue fabric into T-shirts destined for the shelves of Gap stores across the United States.

They are part of a growing textile industry in this tiny African nation that is profiting from a new US trade initiative.

The Gap shirts enter the United States under the Africa Growth and Opportunity Act, which has slashed tariffs on nearly 2 000 products imported from dozens of African countries and opened the world’s largest market to goods from the poorest continent.

Excluding oil, gems and precious metals, sub-Saharan Africa saw a 10,7% increase in sales to the United States last year, led by a 28% increase in apparel, one of the main categories of manufactured goods covered under the act.

The United States is now the biggest importer of African goods and the new trade incentives have added $1-billion in international investment to Africa.

US trade representatives will meet from January 13-17 with African government ministers on the island nation of Mauritius, off Africa’s east coast, to discuss how US trade and investment in the continent can be expanded.

The conference, the second since the trade act was passed by the US Congress in 2000, will also assess how far the program has come and still needs to go. Private investors and businessmen will be on hand.

Officials in Lesotho are enthusiastic about the trade deal known as AGOA, crediting it with helping kick-start their country’s desperately poor economy. They also said they were encouraged by the boom in direct investment, even if most of it is from abroad.

“We have to make a start somewhere,” said Lesotho’s Trade Minister Mpho Malie, adding that eventually investors from Lesotho will get on board.
“It can’t happen overnight.”

US Trade Representative Robert Zoellick hailed the trade deal, saying it would make a major mark on the continent.

“AGOA is helping to transform the economic landscape throughout Africa,” Zoellick said in a statement. “It is stimulating new trading opportunities for the region’s businesses and entrepreneurs, creating jobs for people who have never worked for a weekly wage, and bringing hundreds of millions of dollars in new investment to some of the poorest parts of the world.”

Africa’s share of global trade has fallen from about 5% in the 1960s to less than 2% because of volatile world prices for raw materials and because of conflicts on the continent.

Now, 36 African countries participate in AGOA. Only countries with sound economic and human rights records are eligible. While some nations have reaped huge profits from the program, others have found it nearly impossible to take advantage of it. In Lesotho, the Shining Century factory is one of a growing number of apparel centers that have flourished under the act, adding 15 000 new jobs in this rugged, impoverished country encircled by South Africa.

Clothing exports have doubled and clothing factories are a top employer now that they are swamped with US orders.

Lesotho factories also produce clothes for the US brand Wrangler and for Wal-Mart, the American discount store chain. In countries like Lesotho, investment needed to get AGOA projects up and running has mostly come from Asia. The factories here are almost exclusively owned and run by Taiwanese and Chinese, who came to Africa to find cheap labor and to escape Western quotas limiting clothing imports from Asia.

Elsewhere in Africa, AGOA has met with mixed success.

In Kenya, where the economy has foundered in recent years, textile exports have nearly quadrupled under AGOA. Officials forecast as many as 150 000 new textile jobs by the end of the year.

In South Africa, the continent’s strongest economy, AGOA accounted for 21% of the country’s total exports in 2001—including clothing, iron and steel products, fruits and nuts, gold and diamonds.

Senegal, a country that helped lead the continent’s drive for Western investment, has so far mostly missed out on AGOA’s benefits. A struggling economy, its major textile factories have recently closed or are on the brink of closure.

Nigeria, Africa’s most populous country and the world’s sixth largest oil exporter, has had difficulty attracting investment because of its reputation for corruption, experts say.

“Nigeria is losing several millions of dollars in potential American investments under AGOA due to a lack of organisation, negative image and scam activities,” said Washington-based Nigerian trade consultant Emanuel Ogebe.

Meanwhile, the T-shirts keep coming in Lesotho’s cavernous Shining Century factory. It echoes with the steady hum of sewing machines. Rows of women in headscarves sort and cut material and stitch the pieces into sportswear for the Gap.

Working nine hours a day, five days a week, new trainees start at 535 Muluti ($63) a month and a fully trained employee earns 580 Muluti ($68) a month, not including bonuses.

Workers complain that wages are not high enough, but such jobs are prized in a country where the per capita income is about $400 a year.

During their lunch break, the 1 200 workers gather in clusters to eat broiled sausages and homemade stew and complain about their wages, which they say barely cover the high rents in Maseru. They also grumble about being forced to work overtime and occasional Saturdays to meet tight production schedules.

A 20-year-old woman who declined to give her name said Americans should stop buying Gap clothes. “We work hard to make them but don’t get paid enough,” she said.

From her offices with tinted windows overlooking the factory floor, Jennifer Chen, a Taiwanese businesswoman and co-owner of the factory, defended her company.

Like many other Taiwanese-owned factories in Lesotho, she said, hers has strong worker committees that regularly met with management to resolve workplace issues, including cultural misunderstandings between the sides.

AGOA, Chen said, was good for business and for her workers, providing a much needed launching pad for more contracts and more jobs.

“With the whole world economy very low, AGOA is an opportunity to get business,” said Chen. - Sapa-AP

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