KEPSA represented by the Deputy CEO Mr Victor Ogalo participated in the preparatory meetings of the private sector business associations on 1st November 2023 that were convened by the Corporate Council on Africa and during the Private Sector Forum on 2nd November 2023, both of which meant to build a common position of the business associations in Africa and USA towards the 20th AGOA Forum 2023. Mr. Ogalo also represented KEPSA at one of the AGOA Panels to discuss “Recommendations for Improving AGOA Utilization and Better Connecting U.S and African Companies”. Moderated by Venessa Adams, the Vice-President, Strategic Partnerships, AGRA. The KEPSA Chair, Dr Jas Bedi in his capacity also as the Chairman for Kenya Export Promotion and Branding Agency (KEPROBA), also participated in a panel titled “Creating Value Chains and Supporting Manufacturing through AGOA: Lessons from the Textile/Apparel and Automotive Sectors”.

AGOA Forum 2023 was officially opened on 3rd November 2023 by H.E.  Cyril Ramaphosa, President of the Republic of South Africa. U.S. President Joe Biden’s statement was read by U.S. Trade Representative Katherine Tai at the opening of the 20th AGOA Forum on 2nd November 2023. The statement expressed Biden’s strong support for the reauthorization and modernization of the AGOA. He also said that he was committed to working with Congress and the African partners to renew the law beyond 2025, in order to deepen trade relations between the US and sub-Saharan Africa. He also said that Africa is the future and that when Africa succeeds, the whole world succeeds.

The AGOA 2023 forum was hosted by South Africa in Johannesburg from 2nd to 4th November 2023. The forum brought together government officials, business leaders, civil society representatives, and other stakeholders from the US and sub-Saharan Africa to discuss trade and investment opportunities, regional integration, and the future of the AGOA program. The US Trade Representative Katherine Tai attended the forum and met with South Africa’s Minister of Trade, Industry and Competition Ebrahim Patel. They discussed their shared priorities, the administration’s commitment to the continent, and the opportunities to make AGOA more transformative.

But “how has AGOA impacted Africa's economy?”

AGOA has had a positive impact on Africa’s economy, but the extent and nature of this impact vary across countries and sectors. According to the web search results, some of the effects of AGOA are:

• AGOA has increased trade between the US and sub-Saharan Africa, especially in non-oil products. Between 2001 and 2020, AGOA exports from sub-Saharan Africa to the US increased by 300 percent, from $8.2 billion to $24.6 billion. Non-oil exports under AGOA increased by 200 percent, from $1.4 billion to $4.2 billion. The top non-oil export categories were apparel, vehicles, fruits and nuts, cocoa, and minerals and metals.
• AGOA has created jobs and income opportunities for African workers, especially women. The apparel sector, which accounts for over 60 percent of non-oil AGOA exports, has generated about 300,000 direct jobs and 1.2 million indirect jobs in sub-Saharan Africa. The majority of these jobs are held by women, who benefit from higher wages, skills development, and empowerment. Other sectors, such as agriculture, horticulture, and handicrafts, have also provided employment and income for rural and informal workers.
• AGOA has encouraged economic diversification and regional integration in sub-Saharan Africa. VAGOA has helped African countries to diversify their export products and markets, reducing their dependence on primary commodities and enhancing their competitiveness. AGOA has also stimulated intra-regional trade and investment, as countries seek to take advantage of economies of scale, supply chain linkages, and cross-border infrastructure. For example, the Southern African Customs Union (SACU) has increased its exports of vehicles and auto parts to the US under AGOA, leveraging its regional production network and preferential access.
• AGOA has incentivized policy reforms and good governance in sub-Saharan Africa. AGOA has established eligibility criteria that require countries to demonstrate progress toward market liberalization, the rule of law, human rights, and labour standards. These criteria have motivated some countries to adopt reforms that improve their business environments, attract foreign investment, and foster democratic institutions. AGOA has also provided a platform for dialogue and cooperation between the US and sub-Saharan Africa on trade and development issues.

However, AGOA has also faced some challenges and limitations, such as:

• AGOA has not fully utilized its potential to increase trade and investment between the US and sub-Saharan Africa. Despite the preferential access, sub-Saharan Africa’s share of US imports remains low, at less than 2 percent. Many African countries face supply-side constraints, such as low productivity, high production costs, poor infrastructure, and lack of finance and skills, that limit their ability to meet the demand and standards of the US market. Moreover, some US tariffs and rules of origin remain restrictive for certain products, such as textiles, footwear, and agricultural goods, that could otherwise benefit from AGOA.
• AGOA has not been equally beneficial for all sub-Saharan African countries and sectors. The trade benefits of AGOA have been concentrated in a few countries and products, mainly oil and minerals1. In 2019, the top five AGOA beneficiaries (Nigeria, Angola, South Africa, Chad, and Kenya) accounted for 86 percent of total AGOA exports to the US. The top five AGOA products (crude oil, petroleum products, vehicles, precious metals, and apparel) accounted for 93 percent of total AGOA exports to the US. Many countries and sectors have not been able to take advantage of AGOA due to various factors, such as policy ambiguity, policy conflict, lack of awareness, and lack of capacity.
• AGOA has not been sufficiently integrated with other US and African trade and development initiatives. AGOA has been largely a unilateral and non-reciprocal trade program, without a clear framework for long-term and comprehensive trade and investment relations between the US and sub-Saharan Africa. AGOA has also operated in isolation from other US trade and development programs, such as the Millennium Challenge Corporation (MCC), the Power Africa initiative, and the Prosper Africa initiative, that could complement and enhance its impact. Furthermore, AGOA has not been well aligned with the African Continental Free Trade Area (AfCFTA), which aims to create a single market for goods and services in Africa.

As AGOA approaches its expiration in 2025, there is a need for a new vision and strategy for the future of US-Africa trade and investment relations, one that builds on the achievements and lessons of AGOA, addresses the challenges and limitations of AGOA, and responds to the changing global and regional context. Such a vision and strategy should be based on mutual interests, shared values, and reciprocal commitments, and should support Africa’s economic transformation, regional integration, and sustainable development.