South Africa: AGOA 2023 – Searching for Improvement in 25-Year Programme for Africa

Cape Town — The U.S. is looking at ways of making more of an impact on the continent via the African Growth and Opportunity Act (AGOA), its legislation boost economic engagement with African countries. The growing influence of China and Russia in Africa is seen as a major factor in the U.S. push for better relations with African countries. But with AGOA coming to an end in 2025, there are increasing questions around what it will be replaced with, and the impact it will have on Africa’s trade relations with the U.S.

The press briefing hosted by the U.S. State Department marked the countdown for the AGOA meeting in November, and gave the opportunity to get some answers.

Deputy Assistant Secretary of State in the Bureau of African Affairs Joy Basu said that fostering new economic engagement with countries in Africa is a top priority for President Joe Biden and the U.S. government.

“It is the idea of a shared, inclusive, sustainable economic growth in Africa that is at the front of our goals as an administration and was really highlighted at last year’s U.S.-Africa Leaders Summit in December (2022)”. The African Growth Opportunity Act, AGOA, is a cornerstone of the United States’ economic engagement programme with Africa, and it’s something that we’re very proud of,” Basu said.

For South Africa, its AGOA membership means that it enjoys duty-free trade on the first 25% of its goods exported to the U.S. This agreement came under threat earlier this year when the U.S. accused South Africa of supplying weapons to Russia in its war against Ukraine. An accusation the South African denies. There were calls from U.S. legislators from both the Democratic Party and the Republican Party to move the AGOA meeting from South Africa and for the country to be removed from AGOA.

In 2021, the U.S. terminated Ethiopia, Mali and Guinea from AGOA after President Joe Biden said they were no longer in compliance with the eligibility requirements, citing examples of their failure to defend internationally recognized human rights.

Asked whether elections in African countries, particularly in Madagascar will be a topic for discussion at the AGOA forum, Joy Basu, while uncertain whether this would be a discussion point, said: I imagine, especially this year, the supporting of democracy on the continent is a huge focus for the administration and for our bureau in particular. And we remain committed to supporting electoral processes that really deepen democracy across the continent, including in Madagascar. And in that context, I would say we continue to encourage electoral bodies to increase citizens’ understanding of the political process, and to really ensure that not only are there free and fair elections, but that there is felt perception in the population of free and fair elections when it comes to democracy. And so that is relevant in many countries; it’s really a policy focus area of ours as we partner with governments and civil society and other institutions in the continent, including in Madagascar.

When asked if Ethiopia’s request to return to AGOA, Constance Hamilton, the assistant U.S. trade representative for Africa, said decisions are still pending, and there will be no announcement at the AGOA forum in November.

Constance Hamilton, the assistant U.S. trade representative for Africa, said: “When AGOA was enacted in 2000, we hoped that it would be a game changer for the continent in terms of our relationship with individual countries and with the ability to support regional integration. We are looking forward to the AGOA Forum as a mechanism by which our leadership can talk to their counterparts and really engage on the issues that impact our relationship.”

Last year Kenya and U.S. announced the  Strategic Trade and Investment Partnership (STIP), a trade and investment partnership which includes agriculture, anti-corruption, digital trade, environment and climate change action, and workers’ rights and protections. President William Ruto’s administration is signed to the AGOA deal, but STIP does not replace AGOA, Hamilton said.

“Kenya – we’re not talking about graduating Kenya out of AGOA. The STIP is actually a way of … together we’ll undertake additional commitments that we believe will improve Kenya’s investment climate and environment, and that at the end of the day Kenya will be in a better place to attract the kind of investment for the kind of job growth that they’re looking for.

“We do believe in the future that what we’re doing with Kenya could be a model for other countries.  When we launched this under the previous administration and under the current administration, the guidance we got is that it has to work.  So what we do has to work for Kenya before we say that this is something that we will replicate someplace else. We have to make sure we get it right.  But I’m very excited about the progress that we’re making.  I think we’re looking forward to having another round of negotiations in December with Kenya, and I’m hoping that at the end of the day we do have a model that we can replicate in other interested countries across the continent.”

During the briefing, it was asked what Angola could do to expand to sectors outside of crude oil, diamonds, and gas, and Basu said: Th ere are so many sectors that are available for export through AGOA, and traditionally in some countries it is more of these extractives like oil that has been well utilized.  We would really encourage the government and civil society to work together to create more plans for how AGOA can be better utilized in Luanda. Obviously, there is tremendous potential across – even, for example, just agricultural products that I know are grown in Angola.  But one of the key factors to raising utilization is having a strategic plan for how a government will work with private sector to utilize that.”