African hopes roar as US President Biden supports the reauthorisation of Agoa

African Union Commissioner Albert Muchanga. Picture: Itumeleng English/ Independent Newspapers

African Union Commissioner Albert Muchanga. Picture: Itumeleng English/ Independent Newspapers

Published Nov 3, 2023


US President Joe Biden has buoyed African countries participating in the 20th African Growth Opportunity Act (Agoa) Forum to seek an early extension of the trade agreement for up to 20 years after he endorsed its reauthorisation.

The 20th Agoa Forum, which kicked off yesterday in Johannesburg, aims to promote economic ties and export opportunities between sub-Saharan Africa and the US.

Agoa is a US Trade Act which significantly enhances market access to the US for qualifying sub-Saharan African countries by allowing US importers to clear such goods duty-free.

The agreement expires on September, 30, 2025 following its most recent renewal in 2015, but the scheduled expiration has made the future of US-Africa trade relations uncertain.

Putting fears to bed in a statement yesterday, Biden said he strongly supported the reauthorisation of the Agoa, calling it a landmark, bipartisan law that has formed a bedrock for US trade with sub-Saharan Africa for more than two decades.

“I encourage Congress to reauthorise Agoa in a timely fashion and to modernise this important Act for the economic opportunities of the coming decade,” Biden said.

“I am committed to expeditiously working with Congress and our African partners to renew this law beyond 2025, in order to deepen trade relations between our countries, advance regional integration, and realise Africa’s immense economic potential for our mutual benefit.”

Biden’s will be reassuring after he announced his intention to terminate the eligibility of four African countries from Agoa trade benefits from January, 1, 2024.

Biden said Uganda, Gabon, Niger and the Central African Republic (CAR) had failed to address the US concerns about their non-compliance with the Agoa eligibility criteria following violations of human rights and military removal of elected governments.

In September, the African Union Mission to the US held the Agoa mid-term review meeting in Washington DC which expressed the need for urgent renewal of Agoa with non-controversial amendments for a minimum of 10 years.

The trade ministers’ forum yesterday at the Agoa Forum met behind closed doors to consider the recommendations of the ambassadors, senior officials, and experts made at the Washington DC meeting.

African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals Ambassador Albert Muchanga yesterday said an extension of Agoa would provide the required predictability and certainty to the markets.

Muchanga said the introduction of the Agoa Extension Act of 2023 Bill to Congress last month by US Senator John Kennedy, with the intention of extending the programme for 20 years to 2045, and Biden’s indication that the US administration would support measures to extend Agoa, would provide certainty to traders and encourage investments.

“That is in line with our fourth position which we are going to find in the document and that is the life extension for 10 years. I think we as Africa should be ready to accept that 10,” Muchanga said.

“If the offer is 20 years, we as Africa should be ready to accept that. Ten to 20 [years] is very useful to the investment community. It gives them time to put their money in to generate products that will be exported under Agoa.”

The Agoa programme affords African producers an important competitive advantage in the US market, thereby enabling exports, encouraging investment in the region, boosting private sector activity and economic growth in the region.

The automotive industry has been South Africa’s major beneficiary under Agoa.

In 2022, the US comprised the domestic automotive industry’s second largest export destination with total automotive exports amounting to R24.1 billion.