Exports under AGOA hit US$300m…more value-added products needed

Infograph by Alistair Kuuku Arthur-Don

Ghana can build on its good performance under the African Growth and Opportunity Act (AGOA) programme by focusing more on value addition to its export commodities like cocoa and Shea Butter and exporting to the US market.

Available data from the US Economic Policy in Africa show that between 2016 and 2017 Ghana saw its exports to the United States more than doubled, with exports under AGOA quadrupling to more than US$300million.

Mr. Harry Sullivan, Acting Director for Economic and Regional Affairs at the Bureau of African Affairs, told selected African journalists during a telephone-briefing organised by the Africa Regional Media Hub, that African non-oil exports to the US under AGOA had grown from US$1.3billion in 2001, the year that the legislation was passed, to US$4.2billion in 2016, with the trend continuing to be positive since then.

Currently, there are thousands of products available under the AGOA list to enter the United States duty-free.

For more than a dozen years, AGOA has been the U.S. government’s signature trade initiative with sub-Saharan Africa – helping diversify exports, create jobs, reduce barriers to trade, and expand economic opportunities for the region’s population.

With more than 6,000 products receiving duty-free treatment when exported to the United States, AGOA has helped generate jobs through trade and investment opportunities during its short lifespan.

AGOA provides a framework for improved access to U.S. credit and technical expertise, and establishes a high-level dialogue on trade and investment in the form of an annual US/sub-Saharan Africa Trade and Economic Forum.

It is an integral component of the United States’ overall trade with sub-Saharan Africa, increasing two-way trade between the two regions to over US$95billion in 2011.

AGOA also generated a US$13billion increase in two-way trade between 2010 and 2011, and a total of US$716.1 billion since 2001.

Mr. Sullivan said agricultural exports, especially, like cocoa and shea butter, can help Ghana up its earnings through AGOA.

“Everybody knows you provide a huge portion of cocoa to the world; so, if you could do some first-class processing in Ghana, that would add value to your economy. Shea butter, I believe, is also present in northern Ghana,” he said, and urged Ghana to look at those kinds of agricultural products as well as light industry.

He explained that Ghana is a success story in Africa and can build on those attributes by moving from a market entrepreneurship to larger-scale industries. “And that can happen, perhaps, through cooperatives,” he stated.

He indicated that although the American market has huge benefits, there is a need to produce at the necessary quality and quantity; and cooperatives could sometimes provide a mechanism for pooling resources in order to reach the required quantities.

Statistics on US-Africa Trade through 2017 showed that total U.S. trade with sub-Saharan Africa rose by 16.8%: from US$33billion in 2016 to US$38.5billion in 2017.

U.S. exports to Africa also increased, by four per cent to 13.1 billion, while African exports to the United States rose by more than 24 per cent to more than 24 billion.

“Increased oil exports did account for a large share of this increase, but we also saw some encouraging signs of diversification. African exports of agricultural products to the United States rose by 10% to US$2.7billion in 2017.

“We often say that the cornerstone of our trade policy with Africa is the African Growth and Opportunity Act. And that’s been true since 2000, when the first AGOA legislation passed; and AGOA’s special benefit is offering duty-free market access for thousands of products that are eligible to African countries.

“AGOA provides a powerful incentive to increase trade and investment, which has spurred inclusive economic growth and regional stability by providing that market access,” he stated.