The United States Congress has passed a bipartisan legislation that extends African Growth and Opportunity (AGOA), which was supposed to expire this year. The deal has now been renewed for another 10 yearsÔÇöa move that means goods from Botswana and the rest of eligible countries in Africa can be exported duty free to the US market.
“After years of tireless work and effective advocacy, our work in Congress to reauthorise the African Growth and Opportunity Act is now complete,” Ranking Member of the Africa Subcommitte, Congresswoman Karen Bass said after the passage.
“I am proud that both the House of Representatives and the┬áU.S.┬áSenate voted overwhelmingly to reauthorize AGOA, sending the legislation to the President and guaranteeing a seamless and long-term extension of this vitally important law.”
She added that over the next┬á10┬áyears,┬áAfrica will become an even more important part of the world economy with a large, youthful population that is increasingly university-educated, tech-savvy and entrepreneurial.┬á
Congress was the last huddle following the US senate approval of the Trade Preferences Extension Act of 2015, which includes AGOA recently.
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 for the U.S market.
Apart from Botswana, other countries that are eligible include Angola, Benin, Burkina Faso, Burundi, Cameroon, Cape Verde, Chad, Comoros, Congo (Rep.), 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.
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 HYPERLINK “http://www.brookings.edu/blogs/africa-in-focus/posts/2015/02/23-agoa-agriculture-africa-meltzer” \t “_blank”critical role of the agricultural sector and specifically mandates support to “businesses and sectors that engage women farmers and entrepreneurs.”
Willemien Viljoen, a researcher at tralac, advised that failing to comply with the requirements could be detrimental to African economies.
South Africa, which faces AGOA out-of-cycle reviews, has doubts over meeting the eligibility criteria and could lose its status as a beneficiary or its duty-free market access for its products can 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.