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Agoa's winners and losers unpacked

Publish date: 13 May 2024
Issue Number: 1076
Diary: IBA Legalbrief Africa
Category: Trade

The African Growth and Opportunity Act (Agoa) has made strides in boosting exports from eligible African countries to the US. Between 2001 and 2021, the annual value of US imports from Agoa-eligible countries nearly tripled, from $8.15bn to $21.8bn. The trade preferences have particularly benefited sectors like apparel, textiles, agriculture and light manufacturing. However, Agoa's impact has been uneven across the region with some countries using the opportunities more effectively than others. As Agoa approaches its 25th anniversary next year, policymakers are considering extending it for a further 16 years. An analysis in The Conversation notes that Agoa's benefits can't be measured in just one metric. ‘They reflect in various terms for various countries. But available research indicates that the countries that benefited most from Agoa include South Africa, Kenya, Lesotho, Mauritius, Madagascar, Ethiopia and Ghana. These nations have used Agoa preferences to substantially increase their exports to the US, particularly in sectors like apparel, textiles and light manufacturing. Kenya, where apparel-dominated exports to the US have grown from $55m in 2001 to $603m in 2022, is a shining example of growth in exports. Mauritius exported chocolate and basket-weaving materials. Mali exported buckwheat, travel goods and musical instruments until its 2022 suspension. Mozambique exported sugar, nuts and tobacco. Togo exported wheat, legumes and fruit juices. Lesotho's success story is equally inspiring. It has had rapid export growth and job creation in its apparel sector, and this has contributed to new manufacturing jobs. The Conversation notes that central and west African countries have not extensively used Agoa's benefits. They have been held back by weakness in infrastructure, governance and global market integration. Burundi, the Central African Republic, Equatorial Guinea, Eritrea, The Gambia, Guinea-Bissau and Mali have seen little export growth and foreign direct investment, or no benefits.

Full analysis on The Conversation site

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