Africa, US must seek a win-win partnership through enhanced Agoa

The United States should heed calls from African ministers responsible for trade from Africa Growth and Opportunity Act (Agoa) eligible countries, pursuing economic prosperity, calling for the renewal and enhancement of the development tool - the foundation of US-Africa economic cooperation, that gives Africa the opportunity for access to markets.

Agoa was established by the US Congress to facilitate economic growth and development throughout Africa, and to fully support the continent’s extraordinary potential.   

Since its creation, 24 years ago, Agoa has served as a core tool to increase investment in Africa and create new jobs across the continent, while also driving regional integration and encouraging important governance and humanitarian reforms.

Africa and the US should seek mutually beneficial partnerships to drive economic growth, create jobs and address global challenges. By enhancing Agoa and aligning with the African Continental Free Trade Area (AfCFTA) to boost African trade - the AfCFTA remains key in building regional and continental value chains in Africa.

The future of Agoa set to expire in 2025, is increasingly uncertain as US industrial policy becomes more nationalistic and securitised, particularly in response to shifting geopolitical, trade and domestic priorities.

 African goods 

The US should increase access to African goods in sectors like agriculture, textiles and minerals. There is a need for enhanced support to small and medium-sized enterprises, capacity building and flexible rules of origin to stimulate value addition with Africa.

At the same time, the US should invest in Africa’s value chains by sourcing and processing critical minerals at sources in the continent. US investment in Africa’s productive capacity is crucial to ensure that Agoa achieves its intended objectives, therefore, the country’s administration should prioritise an investment-led trade strategy in its relations with African countries.

This investment-led trade strategy should include value-addition and beneficiation of critical raw materials and minerals in Africa. These products should be sourced directly from Africa, including incorporating the manufactured products sourced from Africa’s critical minerals under the Inflation Reduction Act.

At the same time, the US administration should invest in Africa’s productive capacity with a view to increasing the utilisation of Agoa through value-added product diversification including in the high-tech sector.

US-Africa partnership

There is no gain in saying, Agoa is essential for the promotion of trade and development through exports. The US-Africa partnership is indispensable to meeting the most pressing global challenges such as the climate crisis, food insecurity, and democratic backsliding.

Agoa has been profound, and it has been the platform, the foundation upon which the US and Africa have built economic partnerships. And that is why the US should re-prioritise Agoa urgently and renew the deal.

The US- Africa economic relationship is important in addressing challenges and building a more resilient, sustainable, and inclusive future. There is a need to work together to fulfil Agoa’s promise for the continent and to pursue equitable growth for all segments of our societies.

Africa has the world’s youngest population, and its greatest resource is its people, your people – your women, youth, and budding entrepreneurs and innovators. The future is Africa, and engaging with this continent is the key to prosperity for all of us.

Mr Obonyo is a Public Policy Analyst. Email: [email protected]