PHOTO: Financial Times
Nigeria may have to do more under its diversification agenda and remove several restrictions to investments if it hopes to benefit from the extended trade deal, Africa Growth and Opportunity Act (AGOA) by the United States, the State Department’s Acting Director for Economic and Regional Affairs, Harry Sullivan said during a telephonic briefing on Tuesday.
According to data from the department, Nigeria accounted for a paltry volume of $9 million out of $2.7 billion agricultural exports recorded by the continent to the United States in 2017.
Specifically, Sullivan noted that an increasing number of countries took advantage of the benefits available under the legislation, adding that the low volume recorded in non-oil export was as a result of dependence on oil.Nigeria’s oil export to the U.S rose from $3.4 billion to $6 billion.
The U.S. however encouraged Nigeria to liberalize to attract greater foreign investment stating that there are many restrictions to doing business in Nigeria thwarting foreign and domestic investment.
In 2017, African exports of agricultural products increased by 10% to $2.7billion, compared to previous years where non-oil exports increased from $1.3billion in 2001 to $4.2billion in 2015.Overall, trade trend was also positive, with US-Africa trade rising by 15.8% in 2017, from $33billion to $38.5billion, while US exports to Africa rose 4% to $13.1billion and African exports to the US rose by more than 20% to over $24billion.
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Between 2016 and 2017, Ghana saw its exports under AGOA quadruple to more than $300million, while Madagascar and Ethiopia took greater advantage of the market access granted for footwear and garments, with the two countries’ exports to the US rising to $152million and $92million respectively.
The United States (U.S.) had revalidated AGOA by 10 years, to elongate the flagship trade deal with the continent till September 30, 2025.The new window re-opened vista for Nigeria and other countries in the region to grow their non-oil exports to the U.S. to over $8 billion within the next 10 years, under the extended trade deal.
Essentially, under the programme’s extended regime, African countries would be engaged in the rules of origin to engender value-addition of raw materials as they could now include the cost of direct processing, as they share production from one country to another on their way to the U.S. market.
Furthermore, African countries exporting to the U.S. can also use the programme across borders, thereby stimulating intra-African trade in regional markets, where value may be further added to export products.
Similarly, the reviewed scheme equally renews focus on the ability of Africans to meet food safety standards in the U.S. and other industrial standards that have been identified for export products.
The US determines whether countries in Sub-Saharan Africa meet its published eligibility requirements on a yearly basis and beneficiary status can be granted, or withdrawn, at the discretion of the US President. Currently, 38 African countries are eligible for AGOA, which extends duty-free access to the US market across 6 000 tariff lines.
Increased oil exports, which are not covered by AGOA, accounted for a large share of the increase, but Sullivan said there were also some “encouraging signs of diversification”.
Source: G Business
