Zambia’s trade with the USA under AGOA

SINCE its enactment by former USA president Bill Clinton’s administration in may 2000, the African Growth and Opportunity Act has led to an increase in US-Africa trade. This has created a lot of excitement on both sides of the Atlantic Ocean among the business people.

The Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.

AGOA has also helped in enhancing US engagement of Sub Saharan Africa to a higher level and is perhaps the most significant American initiative on Africa in the American History.

Africa’s exports under this facility have mainly been textiles and garments, agricultural products, automobiles, oil and handicrafts.

Despite being an early mover of the AGOA initiative, Zambia’s trade with the USA under AGOA has been modest, with trade volumes being recorded mostly in the horticultural and floricultural products.

It is against this background that civil society organisations in Zambia organised a meeting to reflect on Zambia’s recent progress on AGOA and its utilisation.

The deputy minister of commerce trade and industry, Richwell Siamunene commended the Consumer Unity and Trust Society – Cuts International Lusaka, Caritas Zambia and Jesuit Centre for Theological Reflection for organising the meeting at a time when the ministry together with relevant stakeholders such as the Zambia Development Agency (ZDA), Zambia Association of Manufacturers and the civil society organisations are preparing for the 12th AGOA forum that is scheduled to take place next month from August 12-13, 2013 in Addis Ababa, Ethiopia, under the “Sustainable Transformation through Trade and Technology”.

The minister noted that AGOA has had a big impact on African trade with the US since its implementation. With overall total US imports increasing almost five-fold since it was enacted in 2000, from $5 billion to over $25 billion in 2005, it is a clear indication of African growth trajectory.

In 2011, Zambia’s exports to the United States of America under the AGOA rose to US$47.3 million from $26.9 million registered in 2010. This growth pattern affirms the need for Zambia to keep participating in various global partnerships.

He also noted that despite the many challenges eligible countries face in utilising this scheme, there is a general consensus among AGOA stakeholders on the necessity to extend AGOA beyond 2015 in order to give African countries reasonable time for building competitive capacity in global markets.

During the same meeting, the ZDA informed the meeting that the modest trade developments between Zambia and the USA has not been that of market access but has mainly been attributed to Zambia’s supply side where the country has previously failed to take full advantage of AGOA due to internal industrial weaknesses and the lack of value addition to products with export potential.

ZDA informed the meeting that ,in the recent past, Zambia and the USA set up a working group on bilateral trade and AGOA aimed at promoting two-way trade and priority products were selected to be traded under the AGOA Act such as: spices/paprika hard wood products specialty foods, gemstones, coffee honey and Leather.

The need for USA companies to invest in sectors such as energy, health (e.g. produce syringes or ARVS for sale locally and export into regional markets like Comesa and SADC), agriculture and so on as a way of increasing US-Zambia two-way trade are amongst the issues that are recently being negotiated on a bilateral level with the USA.

Zambia Development Agency strongly believes that there is no excuse for Zambians to fail to make good use of the AGOA programme, and that the AGOA forums should be used to showcase what the country can offer to both regional and international markets.

Although tourism is not AGOA eligible, the country can benefit from the AGOA Forum by marketing its tourist attractions as well as the UNWTO conference slated for August 24th -29, 2013. This is Zambia’s moment and the time for Zambia to reap from AGOA is now.

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