The African Growth and Opportunity Act (AGOA) is unilateral and non-reciprocal U.S. legislation that aims to promote trans-border trade between the U.S. and African nations. It enables the United States to give preferential trade benefits to African countries that satisfy eligibility requirements: these include social, political, and economic governance targets, according to African Business.
In 2019, the emergence of the African Continental Free Trade Area (AfCFTA) created uncertainties over the renewal of AGOA, which expires in 2025. Some observers suggested that instead of renewing the AGOA, the United States should use the AfCFTA as a framework for conversations with African nations about establishing a new strategic economic partnership.
AGOA is currently set to expire in 2025. The US and Africa should work together to extend and expand the program, making it more predictable and business-friendly for African exporters. This could include removing some of the eligibility requirements, such as the requirement that countries meet certain human rights and democracy standards.
AGOA could be used to diversify trade flows. AGOA has been successful in boosting exports of certain products, such as oil and apparel. However, there is still room to diversify trade flows and promote the export of higher-value goods and services from Africa. The US and Africa should work together to identify and address the barriers to trade in these areas.
The United States could use AGOA to promote regional integration. The US should support African efforts to promote regional integration and create larger markets. This would make it easier for African businesses to scale up and compete in the global marketplace.
The AGOA could be an effective tool to provide the finances for investment in infrastructure. Africa needs significant investment in infrastructure to support trade and economic growth. The US should work with African governments and the private sector to finance and develop infrastructure projects, such as roads, ports, and power plants.
The US can also provide technical assistance to African countries to help them implement the necessary reforms to boost trade and investment. This could include assistance with customs reform, trade promotion, and product quality standards.
In addition to these general measures, the US and Africa can also work together to boost trade relations in specific sectors, such as agriculture, manufacturing, and services. For example, the US could provide technical assistance to African farmers to help them improve their productivity and meet US food safety standards. The US could also work with African governments to create a more attractive environment for foreign investment in manufacturing and services.