President Cyril Ramaphosa called on the US Congress to approve an early and “sufficiently lengthy” extension of the Africa Growth and Opportunity Act (Agoa), saying an early renewal and reauthorisation would help strengthen trade and investment.
South Africa has been one of the largest Agoa users, as the country was the top exporter in 2022, with $3.6 billion in exports.
The total goods imported into the United States under Agoa were about $10 billion in 2022, which United States Trade Representative Katherine Tai said was a significant increase compared to $6.8 billion in 2021.
Non-petroleum imports, which are major sources of new investment and jobs in Africa, increased to $5.7 billion in 2022 from $5 billion in 2021.
In her remarks at the opening ceremony of the 20th Agoa Forum at Nasrec in Johannesburg on Friday, Tai said the programme has fostered economic growth and development on the continent and increased investment to create new jobs and opportunities.
“Agoa was established to make an enormous difference for millions of Africans as it opened new doors for trade and investment and to encourage African leaders to develop and implement African-led solutions to economic and political reforms.
“However, it has been 23 years since we established Agoa. And many things have changed,” she said.
Tai spoke to the tough economic challenges facing Africa and the world, including the continued economic fallout from the Covid pandemic.
“Fragile and vulnerable supply chains. A worsening climate crisis. Growing inequality and economic insecurity. But there have also been positive developments,” she said.
Trading under the African Continental Free Trade Area — or the AfCFTA — began in January 2021. In September of this year, the African Union joined the G20.
And according to the African Development Bank, five of the world’s 10 fastest-growing economies are projected to be in Africa.
Ramaphosa said he saw potential to enhance Agoa with reforms that would add more products and make it easier for small and medium-sized businesses to use it.
He suggested that a longer period of Agoa - of up to 20 year - may be appealing to investors.
"We would like you to look at the extension of renewal of Agoa for a sufficiently lengthy period for it to act as an incentive for investors to build new factories on the African continent. We can do more if this opportunity is extended, and we can build more capacity if we have more certainty that the period of extension will be longer,“ he said.
Tai reaffirmed the US commitment to partner with Africa by repeating what US President Joe Biden said at the US Africa Leaders Summit last December: “The United States is all in on Africa”.
“As we discuss the impact, challenges, and prospects of Agoa, let’s work together to further unlock the potential of our partnership, to pursue sustainable and equitable growth for all segments of our societies — and ultimately, to unlock the potential of our people, including and especially women, youth, and the African Diaspora,” Tai said.