Scott Eisner, Vice President, US Chamber of Commerce, has decried the inadequate education on the African Growth and Opportunity Act (AGOA) that has accounted for businesses not taking full advantage of the initiative.
AGOA has the objective of expanding US trade and investment with sub-Saharan Africa: to stimulate economic growth, to encourage economic integration, and to facilitate sub-Saharan Africa’s integration into the global economy.
However, many businesses seem not to be fazed by the opportunities that exist for them in AGOA, and have shown little interest in an initiative that opens the largest market in the world to Ghanaian products.
Commenting on the issue, Mr. Eisner held back from ascribing blame to entrepreneurs and rather attributed it to the inadequate education and attention given to the programme, saying: “I think it is somehow about education on how to invest in the US market. I know from about 15 years into AGOA, talking to some small businesses, they see on paper what advantages and opportunities there are in the AGOA.
“But there are questions bothering them on how to gain access to the market and what standards are needed to enter the US market, and how do you standardise within the region so that you can compete with the rest of the world,” he said
Frankly, some businesses have shown interest in the AGOA initiative. However, some entrepreneurs who have tried to sign onto the programme have complained about the long bureaucracy and paper-work involved. To most of them, the criteria for becoming eligible for AGOA support is too rigid and tedious — making it extremely difficult to qualify.
This, Mr. Eisner said, is not a deliberate action to frustrate the efforts of businesses interested in the programme, but to ensure that products entering the US market are free from any contamination — and also a way to enhance best practices.
“The US wants to make sure that products entering the market are legitimate and safe for all consumers. This is done in every other market. So there is a system in place to check that everything is in order. So companies should not be worried about this but rather see it as an opportunity to grow their business. Because if you are able to meet those standards then it means you can export to everywhere in the world,” he said.
His view is supported by Abou Fall — Trade/AGOA & Partnerships Specialist at the West Africa Trade Hub of the USAID, who told the B&FT that: “Countries need to figure out the AGOA strategy and the various requirements. Lots of countries haven’t fully set up the right mechanism; they don’t even have a clear export promotion strategy.
“Countries need to diversify their export base and not just rely on one product. That’s one key element that needs to be considered in the next phase of AGOA.”
At the centre of AGOA are substantial trade preferences that, along with those under the Generalised System of Preferences (GSP), allow virtually all marketable goods produced in AGOA-eligible countries to enter the US market duty-free.
Since its inception AGOA has helped to increase US two-way trade with sub-Saharan Africa. As at August 2014, 41 sub-Saharan African countries were eligible for AGOA benefits.
Countries can be eligible for AGOA benefits based on progress in meeting certain criteria, including progress toward the establishment of a market-based economy, rule of law, economic policies to reduce poverty, protection of internationally recognised worker rights, and efforts to combat corruption.