Assessing Agoa

Philomena Appiah’s factory is the surprising source of thousands of American uniforms and workwear items, tailored by Ghanaian seamstresses and shipped across the Atlantic to stores in the United States as part of the African Growth and Opportunity Act (Agoa).

This week Accra was host to the sixth Agoa forum since former president Bill Clinton signed the Act into law in 2000, giving African countries the opportunity for duty-free trade of certain products in exchange for US-directed economic reforms. It falls short of a free-trade agreement and neither is it the “trade not aid” that anti-poverty campaigners such as Bob Geldof call for, but Appiah is happy.

“Before Agoa we were not doing any exports. Our workers were very few. When Agoa came we were able to export to the US market, our quality is higher, we employ 500 people and we are looking to double our productivity,” said Appiah.

Seamstresses and tailors, hundreds of whom sit at banks of sewing machines on the factory floor, earn little more than $1 a day, while the uniforms fetch about $15 each.

Export to the US accounts for 70% of Appiah’s business, the remainder serves the domestic market. “Agoa is very good,” she said. “It’s an eye-opener for the African continent because it has exposed us to international markets.” Appiah added that she is about to start recruiting to almost double her staff in a bid to respond to increasing demand.

“Sub-Saharan Africa literally needs to trade [its way] out of poverty,” Ghana’s deputy trade minister Kwadwo Afram Asiedu told a gathering of small-scale manufacturers at the Agoa Forum. “We need to be more aggressive in our trade and take advantage of the large market in the US.”

This is the side of Agoa that is praised: Cameroonian swimwear, South African sorbets, Senegalese seafood, Ethiopian birdseed, Ghanaian shea butter and Malian jewellery are all shipped across the Atlantic along with other artisanal and manufactured products from 39 different sub-Saharan African countries. But this trade pales in comparison with the amount of oil imported through Agoa.

Imports from Africa under the Agoa scheme were valued at $44,2billion last year, an increase of more than $5-billion on the previous year. But critics point out that 93% of this headline figure is for oil and oil-related products, meaning that only $3,1billion worth of non-oil products was imported under Agoa.

Vanessa Adams—export business development director for the USAid-backed West Africa Trade Hub, which aims to make regional businesses fit to take advantage of Agoa—dismisses these criticisms. “The fact that oil is part of Agoa gives it numbers it wouldn’t otherwise have but there is a strong drive to import more value-added products, not just raw resources.”

The Agoa approach is set to grow with Europe preparing to launch its own economic partnership agreements at the end of this year. But both initiatives face criticism from those who argue the reciprocal liberalisation favours the West more than Africa.

In Accra not everyone is as impressed by Agoa as Appiah. Standing by a little table covered with wooden carvings and dyed cloth, trader and shirt designer Edzila Mensah lamented: “If you are small like me there is no chance.”

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