The African Growth and Opportunity Act (AGOA) is vital for job creation and sustainable growth, according to Standard Bank.
The summit is taking place in Johannesburg, from November 2 to 4.
The bank said that the alliance between African states and the US is pivotal to support and help grow African industries and markets.
The significant renewal of AGOA will help drive trade and support ongoing investment ties between the US and Africa, Kenny Fihla, Chief Executive, Corporate and Investment Banking at Standard Bank Group said on Thursday.
Fihla said that the benefits of the agreement’s made at the summit will be profound, and will support sustainable growth, job creation and industrialisation.
The bank argues that Africa’s businesses are hindered by access, costs, risks and credit issues when trading across regional and international borders.
“African businesses and markets are becoming increasingly sophisticated and ready to go to the next level. Powerful initiatives like AGOA and the African Continental Free Trade Area (AfCFTA) are key to making this happen,” said Fihla.
The bank also said that statistics show the significant impact AGOA has on trade.
It should be noted that according to the bank the total US AGOA imports were $9.4 billion in 2022, up 57% from $6 billion in 2021 and more than double 2020 values.
President Joe Biden said on Thursday that he strongly supported AGOA.
“AGOA is facilitating private-sector led economic growth across sub-Saharan Africa by increasing the competitiveness of African products, diversifying African exports, and enabling the creation of tens of thousands of new, quality jobs in Africa,” Biden said.
“The benefits are felt on both sides of the Atlantic: AGOA fosters a more competitive environment for US businesses operating in sub-Saharan Africa.”
Agoa provides sub-Saharan African countries that are eligible for duty-free access to the US market for over 1,800 products; in addition, the act allows “more than 5,000 products that are eligible for duty-free access under the Generalised System of Preferences programme”.
One study, according to Reuters estimated that Agoa has created around 350,000 direct jobs 2001 to 2011.
“As the largest economy in the world, the US is an essential driver of global trade and investment. We are, as Standard Bank, in turn committed to driving Africa as an attractive investment market to all investors, including those from America,” Fihla added.
“This week’s AGOA Forum is an important opportunity for the continent to showcase its value and growth prospects while it also allows the US to engage and see for itself what benefits this agreement continues to bring.”