Look beyond Agoa pact, US official tells African firms

A US Trade official has said businesses and governments in sub-Saharan Africa will gain more if they look beyond products with duty-free treatment under (Agoa).

According to Ms Amanda Hilligas, the director of the Trade Competitiveness Project, USAID, businesses and governments should consider Agoa as levelling the field for them to compete with other producers in the world for the US market.

“They should focus on cutting on their overall costing such as production and shipping costs as well as their lead times,” Ms Hilligas, who is in charge of the Southern Africa Trade hub, told participants at the 8th Agoa Forum at the Kenyatta International Conference Centre on Tuesday.

She said to further increase their benefits under Agoa, they should promote public private partnerships, which will strengthen investments in the manufacturing sector and areas that will yield returns in exports and create employment opportunities.

Since most of the 39 Sub-Saharan African countries that are Agoa-eligible have other trade arrangements such EPAs, they should leverage such trade pacts to attract more buyers and investors.

“Combining the two or more markets will provide wider growth opportunities,” she said.

She called on them to take steps that will address critical success factors that impact on competitiveness relative to the rest of the world, citing productivity and skills availability.

In a related development, infrastructure and competitiveness are still a challenge to regional traders seeking to benefit from the United States market.

According to the deputy US Trade Representative, Demetrios Marantis, these are the key areas his government are focusing on.
“A lot of work needs to be done to ensure that trade in this region gets competitive both from the US side and the African side.

However this needs to be tackled together with infrastructure development,” said the ambassador in interview with the Daily Nation on Tuesday.

Through the Africa Growth and Opportunity Act, regional traders have enjoyed duty-free and quota-free access to US markets since 2000. However the level of competitiveness has been affected by the high cost of doing business in the continent.

Poor wages, high electricity costs, unfavourable exchange rates as well as bureaucracy are also some of the issues that traders have to contend with.

“We want to listen and learn so that we can know how help to grow trade in aspects that will address some of the imbalances that currently exist,” said Mr Marantis.

The Agoa forum got underway under the theme, Realising Full Potential of Agoa Through Trade Expansion.