/ 4 November 2023

‘Time is of the essence’ as African leaders seek Agoa refinements

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President Cyril Ramaphosa and minister Ebrahim Patel at the African Growth and Opportunity Act (AGOA) forum in Johannesburg on Friday, Nov. 3, 2023. Photo: Leon Sadiki/Bloomberg via Getty Images

African leaders are asking for refinements to the African Growth and Opportunity Act (Agoa), rather than a full review, according to trade and industry minister Ebrahim Patel.

Patel was giving his closing remarks during the final stretch of the 20th Agoa forum. “We were clear that we did not want a major rewrite of Agoa. We’re not looking for Agoa to be scrapped and a complete rewrite,” the minister said.

“We’re looking for refinements. And the reason for that is, every African minister who spoke emphasised that time is of the essence. Investors have pressed the pause button. Procurers are beginning to press pause buttons. And an early decision will unpause those buttons.”

Though discussions about the future of Agoa — the trade programme which gives eligible sub-Saharan African preferential access to US markets — got underway in Johannesburg this week, the final decision on its renewal will be made in Washington, by the US congress. 

Agoa is set to expire in September 2025, however its African beneficiaries are asking that it be renewed during the early part of 2024, according to Patel.

Patel acknowledged that an early extension may result in certain trade-offs “between quicker and better”. 

But he suggested that the solution to this dilemma would be a two-stage process. Under this proposed arrangement, the first leg would be focused on Agoa’s speedy reauthorisation, perhaps with a modest package of refinements. 

The second stage would focus on making deeper improvements, which was found wanting in a US International Trade Commission report published earlier this year.

According to the report, between 2001 and 2021, US imports under Agoa were relatively small, mostly from a few countries and were concentrated in a handful of sectors, including energy, apparel and transportation equipment.

In 2021, five of the 39 Agoa beneficiaries — South Africa, Kenya, Lesotho, Madagascar and Ethiopia — accounted for about 82% of imports, excluding crude, which has historically dominated trade under the programme.

During her closing remarks, US trade representative Katherine Tai underlined America’s commitment to Africa’s economy and development through Agoa, but noted that the programme has the potential “to do so much more”.