Mia Boykin
The US Wilson Center convened stakeholders to advocate for extending duty-free access to the US market for sub-Saharan Africa until 2041. The discussion on renewing and improving the African Growth and Opportunity Act (AGOA) took place during the Wilson Center Africa Program on June 18 in Washington D.C.
AGOA is a U.S. trade preference program that provides duty-free access to American markets for eligible Sub-Saharan African countries, enhancing economic ties and promoting regional development. With AGOA set to expire in September 2025, the forum aimed to advocate for its renewal and reauthorization.
US Senator Chris Coons, a strong supporter of AGOA, is spearheading the effort for renewal in the Senate with the AGOA Renewal and Improvement Act of 2024. If passed, this act would extend AGOA until 2041 and work to integrate it with the African Continental Free Trade Area (ACFTA). The forum highlighted AGOA’s achievements and discussed proposed changes in the Renewal act.
On what the new bill would accomplish, he said “It would support African government in developing specific strategies for making the most of AGOA benefits, so we can see broader and more diversified participation and benefits from AGOA’s renewal and extension.”
Senator Coons also expressed frustration at Americans who present disbelief in the importance of supporting African nation’s economies. He listed statistics of many African nations’ young populations, export opportunities, and the impact AGOA has already had on nations’ economic well-being. “Africa is the most important continent of this century, and we, in the United States need to act like it,” he ended.
Florizelle Liser, President and CEO of the Corporate Council on Africa, highlighted how inter-trade agreements in the African continent through ACFTA could benefit AGOA if the United States passed the renewal.
“We need to take advantage of ACFTA. Inter-African trade is opening up. This will be the first time that AGOA is extended when there is a continental market, and where Africans have taken critical steps to improve their own trade and make them more competitive in the global economy.,” she said.
Liser’s statement makes an important point, that the United States and the point of AGOA is not just to support African nation’s economics at this moment, but to guide them to a path of independence. With African nations now intending to create a more cooperative market, the renewal of AGOA could reach new heights with more access to the trade markets.
Echoing a similar statement, Patrick Utomi, Lagos BusinessSchool Professor discussed the potential of integrating AGOA with ACFTA, highlighting how emphasizing the importance of a Pan-African currency could benefit trade with the United States. “If we have kinds of payment systems that are now being introduced, then it can be more facilitating for inter-African trade, low cost for many of those kinds of players, and then increase trade,” he said.
Another aspect of the argument in support of AGOA is the rise in African participation in global markets, especially in the digital trade sector. When President Ruto of Kenya met with President Biden in May, digital trade was one of their most discussed topics.
“Digital trade on the continent right now is small but it’s outpacing growth or expansion more than any place else in the world,” Kendra Gaither, President of the U.S. Chamber of Commerce’s U.S.-Africa Business Center, said. “So it’s really an area in which our African counterparts have highlighted a priority and have taken a very bold step to advance a digital trade.”
This is important to note as the digital trade sector continues to play an important role in the United States economy, so a shared interest such as that could be beneficial to both African and American businesses.
AGOA has eligibility requirements for nations participating, meaning the United States can remove a nation from the trade deal if they do not comply with the requirements. In January, President Biden removed Uganda from AGOA due to Uganda’s violation of human rights after the nation passed an anti-gay law that allowed sentencing LGBTQ+ individuals to death.
Sam duPont, Economic Policy Advisor to Seansor Chris Coons, explained how the renewal of AGOA would shift consequences from immediate expulsion from the agreement to offering a menu of options on fixing these social or political issues, besides just cutting a nation off economically.
“There are many circumstances in which although Agoa might be an attractive and available enforcement tool it might not be the best available enforcement tool for the United States to seek to change the behavior. So by providing that menu of options, I think we can create a little bit more flexibility,” he said.
The forum provides a comprehensive overview of what to expect if the bill is passed, but attendees that spoke with TANTV, said the conversation felt slightly hollow.
“It was quite interesting because when they were speaking about the reauthorization, I wanna know exactly like what the sustainable economic development look for Africa, you know, they would focus more on like us, consumerism, U.S. business markets, everything,” said Otsile Phirie, “But I wanna see like, what exactly does that look like? You know, and how is it beneficial to both parties?”
Phirie brings up a good point, the forum didn’t provide much information on what these initiatives would truly look like in Africa. Another attendee, Patrick Kabanda, echoed a similar statement, wanting more information on the AGOA’s impacts on impoverished Africans. He said “I don’t think they are thinking of how it’s benefit, the poorest of the poor because a lot of times many poor Africans don’t benefit. It’s not doom and gloom, but that’s the way it is.”
While proponents offer the economic benefits of renewing and extending AGOA until 2041, concerns voiced about ensuring equitable development across all segments of African societies, particularly for impoverished communities, are valid. As policymakers consider integrating AGOA with initiatives like the AFCTA and Pan-African currencies to bolster impacts, this renewal presents a chance to critically reevaluate the agreement’s eligibility criteria and enforcement mechanisms.
