Africa, 15 years of AGOA

After implementing the African Growth Opportunity Act, AGOA on May 18th 2000, the verdict is still out to declare that it is a sounding success in achieving its goals. The Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.

The AGOA was signed by then US President George Bush to waive tax duties to over 4,000 items of goods between US and the initial 34 countries. Although the number of participating countries were as high as up to 50 African countries, quite a number were since listed or delisted due to issues meeting the terms of compliance.

Subsequently the program has been reviewed and amended another three times in the course of the last 14 years. The program is due for expiration in 2016. So how have the African countries have taken advantage of this special trade incentives extended by the US are still yet to be since. Up to today, the US trade with African countries only measure less than 2 % of US’s total foreign trade. Even though the total trade volume was measured as close to US$100 billion, it is mostly centered to only among five countries with 67 % of trade. They are Nigeria, South Africa, Angola, Egypt and Algeria.

But compared this volume to China’s trade with African countries, US is still far behind with its major competitor which has already been doing over US$200 billion in trade there.

Recently, India is also seeking such trade opportunities with the African continent with Prime Minister Narendra Modi paying visits there to promote trade. Not only the time for such trade incentives is coming to a close after 15 years, US is now facing the geared up competition from China and now India as the new player.