Cape Town – The 20th African Growth and Opportunity Act (Agoa) forum in Africa has called for industrialisation and beneficiation in its foreign trade relations.
The continent is urging the extension of the multibillion-dollar Agoa deal with the US for up to 20 years.
US President Joe Biden has expressed support for the reauthorisation of Agoa, which has been a pivotal law in US trade with sub-Saharan Africa for over two decades.
Agoa has provided eligible sub-Saharan African countries with duty-free access to the American market for over 1 800 products, promoting economic growth and improved relations.
African trade ministers are discussing the extension’s potential to create a stable investment environment.
“As we focus on African industrialisation, the key story must involve regional value chains – what we here in South Africa call beneficiation,” he said.
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“Exports to the US draw on those value chains, pulling in raw (materials) and manufacturing (them) into seamless products that get exported to the US.
“As our US friends look at the African continent, we want them to see this as a major place of procurement, not just from one country but from across the continent.
“Africa is ready to embrace the challenge of industrialisation and over the next three days we will be pursuing that objective through several related and interlocking activities,” The Citizen quoted Trade, Industry and Competition Minister Ibrahim Patel as saying.
Approved by the US Congress in 2000, Agoa is the cornerstone of US economic and trade policy on the continent.
The pact offers duty-free access into the world’s largest economy for countries that meet democratic criteria assessed on a yearly basis.
It ends in 2025, and with little plan yet for any successor, talks are expected to revolve around a possible extension.
The current AGOA trade treaty between South Africa and the United States is set to expire in September 2025. According to ABSA, should the agreement end, SA is not likely to be badly affected. ABSA Chief Economist Peter Worthington explains.
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Trade under the pact accounts for 21 percent of South Africa’s annual exports to the United States, which range from automotive products to raw materials and in 2022 were worth about $3 billion.
“Agoa has been pivotal in strengthening economic ties and promoting growth and development across the African continent,” said the South African presidency, according to AFP.
Earlier this week, the United States said it was cutting the Central African Republic, Gabon, Niger and Uganda from the trade pact from January 2024 over concerns about coups, democracy and human rights.
Mauritania was meanwhile being reinstated to the pact after it was suspended in 2019 due to concerns over workers’ rights.
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Compiled by Betha Madhomu
