Exports from East Africa to the US reached about $1b between October 2017 and September 2018, a 17 per cent increase from the same period the previous year.
The United States Agency for International Development’s East Africa Trade and Investment Hub said apparel dominated the region’s sales at 84.4 per cent of exports.
The Africa Growth and Opportunity Act (Agoa) gives sub-Saharan Africa duty-free access to US markets for about 6,000 items.
A brief from the East Africa Trade and Investment Hub said the firms they supported have increased competitiveness by gathering information on buyer needs, helping to get standards certification, and developing products tailored to consumer preferences.
“To date, USAid Hub trade and investment support has contributed to $4.07b in Agoa exports from the region, with $491.5m from Hub-supported firms,” the Hub said.
Kenya remained the largest exporter under Agoa in East Africa, at $454.2m in the period under review, representing an increase of 14 per cent from $399.7m made in the year to September 2017.
Tanzania experienced a rise of 7 per cent to $42.1m while Uganda had a 49 per cent increase to $3.2m. Rwanda went up 49 per cent to $5.8m.
Ethiopia had the largest increase in exports as the country’s total earnings rose by 62 per cent to $137.3m in September 2018, from $84.5m in September 2017.
“If this growth continues, Ethiopia may quickly become the second or third largest exporter under Agoa in East Africa. Almost all other countries saw their exports grow with the exception of Mauritius and Burundi,” said the Hub. Mauritius has seen increased competition since Madagascar regained its Agoa eligibility in 2014.
Sales from Mauritius dropped by 5 per cent to $160.5m in September 2018, from $168.6m in the same period the previous year.
Burundi is not eligible to trade under Agoa. The country’s exports under the Generalised System of Preferences declined by 36 per cent to $1m, from $1.7m in the year ending September 2017.
Madagascar’s exports to the US rose by 29 per cent to $181.3m in the period under review.
Uganda is working on a plan to increase its exports to the US through Agoa in the next five years.
Trade Minister Amelia Kyambadde recently told The EastAfrican that the new strategy seeks to streamline Uganda’s Agoa business.
“We have been engaged in Agoa but we didn’t have a strategy. People didn’t know who to work with or the quality and standards of goods to export,” Ms Kyambadde said.
Uganda currently lags behind all East African countries apart from Burindi in exports to the US.
Initially, Uganda had sought to leverage on garments as a key export, but a project established for that purpose collapsed after allegations of corruption and mismanagement.
Government had invested $11m in the project at the time it was put on hold.
National Agoa strategies
The Hub said that countries in the region are making the most of the trade agreement.
Rwanda, Uganda, Madagascar, Tanzania and Kenya have developed national Agoa strategies to support critical sectors and items to maximise the duty-free benefits. Ethiopia is in the process of updating its national strategy.
Products that can enter the US market under the agreement include textiles and apparels, specialty foods, footwear, cut flowers, home décor and fashion accessories.
The Hub advises and trains firms by reducing the cost and risk of doing business through engaging governments with stakeholders.