Obama renews AGOA Act
Workers at Fine Spinners Uganda, formerly AGOA factory, in Bugolobi, Kampala, recently. PHOTO BY STEPHEN WANDERA
What you need to know:
Another chance. The US renews trade partnership with 38 African countries, including Uganda, that was about to expire.
Kampala. The US Congress has renewed the African Growth and Opportunity Act (Agoa), which was due to expire on September 30, 2015.
Over the past 15 years, Agoa, which allows made-in-Africa goods to sail into the US duty-free, has enjoyed broad bipartisan support in the US, serving as the cornerstone of the ongoing US economic partnership with Africa.
Uganda is one of the 38 African countries eligible for tariff- free and quota-free access into the US market for more than 6,400 products under Agoa.
“The US politics notwithstanding, Agoa re-authorisation was overwhelmingly voted for by both the House of Representatives and the Senate, and with strong support from the Obama administration,” reads in part a letter from the Uganda Embassy in Washington to the Agoa office in Kampala. “The Agoa bill was immediately assented to and signed into law by President Obama on June 29, 2015.”
The senior presidential adviser on Agoa and trade, Ms Susan Muhwezi, described the development as good news for Uganda and sub-Saharan Africa.
“Uganda needs to truly exploit this opportunity of ‘Trade not Aid’ that President Museveni passionately lobbied for,” Ms Muhwezi said.
The Ugandan deputy Chief of Mission in Washington, Mr Alfred Nnam, challenged Uganda to take the offer as their last chance with Agoa.
“After the re-authorisation of the Agoa, the major challenge for our country is how we position ourselves to benefit from it, especially that this may be the last time the unilateral trade preference is renewed void of the requirement for reciprocity,” he said.
Clauses in the renewed Act already point towards the need for a free trade agreement, preferably under a regional arrangement.
When the act was signed into law in May 2000 by then US President Bill Clinton, Uganda was tipped to reap big but many challenges have left little to show in the 15 years of Agoa in Uganda.
Ms Muhwezi asked the government to give the initiative more support and investors to maximally utilise the opportunity.
“The Agoa initiative was not maximally utilised because of its short life span as investors were not thinking on long term,” she said.
“I request the government, the policy makers, ministry of Finance to make Agoa a priority and create an enabling environment so that the private sector can maximally utilise Agoa this time round.”
Agoa’s achievements in Uganda so far
Trade between Africa and the US has more than tripled since Agoa’s enactment in 2000, and US direct investment in Africa has grown nearly six-fold.
According to the Guardian newspaper, last year, Uganda’s exports to the US were worth $47m, up from $34.8m in 2003. Uganda’s top exports to the US included spices, tea, fish, crafts, and live trees. Agoa has also contributed to the creation of more than one million jobs in sub-Saharan Africa and more than 100,000 American jobs.
