The beneficiaries of the African Growth and Opportunity (AGOA) have been advised to guard against the loss of eligibility to the programme by making sure they comply with the requirements. This advice came on the back of US senate approval of the Trade Preferences Extension Act of 2015, which includes AGOA.
According to experts, the eligibility requirements state that countries should make ‘continual progress towards establishing’ inter alia a market-based economy, an effective legal dispensation, an effective labour law system and eliminate barriers to US trade and investment. The Senate’s version of the AGOA reauthorisation provides increased flexibility with and advance warning for a country whose eligibility is in question.
Willemien Viljoen, a researcher at tralac, the South African based body that build trade law and policy capacity in east and southern Africa, advised that failing to comply with the requirements could be detrimental to African economies. There are doubts whether South Africa, which faces AGOA out-of-cycle reviews, will meet the eligibility criteria. As a result, South Africa could lose its status as a beneficiary. The duty-free market access for its products could also be withdrawn, suspended or limited.
“Although this built-in flexibility to evaluate the compliance of any sub-Saharan country at any time has been welcomed by the US private sector, it has also been described as a battering ram by numerous African countries,” argued Viljoen.
She said this is due to the potential detrimental effects it can have on African economies, especially in terms of transparency, predictability and continuity of AGOA benefits.
“African countries will have to ensure they comply with the eligibility requirements at all times; any misstep can result in a review which can lead to loss of AGOA preferences,” she advised.
Botswana is one of the beneficiaries of the programme, but the country, which relies heavily on mining, has failed to move from textiles into other product lines and produce other goods that are eligible to the U.S market. The US Senate last month (May 14) passed the African Growth and Opportunity Act (AGOA) Extension and Enhancement Act of 2015. The intended purpose of the bill was to extend the AGOA and the Generalised System of Preferences (GSP). The AGOA extends the scheme by another 10 years to September 30, 2025. According to Brookings, the AGOA renewal recognises the critical role of the agricultural sector and specifically mandates support to “businesses and sectors that engage women farmers and entrepreneurs.”
Botswana is eligible together with Angola, Benin, Burkina Faso, Burundi, Cameroon, Cape Verde, Chad, Comoros, Congo (Rep.). The list includes: Ivory Coast, Djibouti, Ethiopia, Gabon, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Tanzania, Togo, Uganda and Zambia.
“This approval is the first step in extending AGOA for another 10 years,” said Viljoen. “This is a welcomed turnaround from the beginning of April when the extension was in question due to an ongoing battle between the US and South Africa over anti-dumping duties on US chicken imports,” she added.