Africa’s exports to US hit $51.8b as Ghana misses out on AGOA in 2011
As the United States prepares to meet African countries to discuss the African Growth and Opportunity Act (AGOA), we bring you some statistics of trade under the AGOA in the year 2011.
Surprisingly, Ghana seems not to be benefitting from the Act, which was signed into law on May 18, 2000 as Title 1 of the US Trade and Development Act of 2000. The Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.
President George Bush signed amendments to AGOA, also known as AGOA II, into law on August 6, 2002 as Sec. 3108 of the Trade Act of 2002. AGOA II substantially expanded the preferential access for imports from beneficiary sub-Saharan African countries.
Ghanaian officials have said they are not taking advantage of the Act because of the limited products the country can export. Products that Ghana exports are mainly consumables but the US does not import consumable products. This has made Ghana to focus on the European markets. For instance in 2011, Ghana’s non-traditional products were exported to 146 countries with the European Union accounting for 45.72% of the exports, according to figures from the Ghana Export Promotion Authority (GEPA). Cocoa paste, canned tuna, cocoa butter, cashew nuts and articles of plastics are among the top 10 leading products during the period under review.
The same can not be said about the country’s trade with the US under AGOA. The total value of trade between the United States and Ghana recorded a significant growth of 56% over the 2010 figures to $1.9 billion in 2011, according to a White House factsheet obtained by ghanabusinessnews.com March 9, 2012. But the country was not among the top five AGOA import partners of the US in 2011. The following are the top five countries – Nigeria ($33.8 billion), Angola ($13.8 billion), South Africa ($9.5 billion), Gabon ($4.4 billion), and Chad ($3.2 billion).
In 2011, exports into the US by African countries under AGOA totaled $51.8 billion representing a 34% increase since 2010.
These were figures released by the US Department of Commerce ahead of the 2012 AGOA Forum to be held in Washington DC from June 14-15, 2012.
The US says mineral fuels and crude oil drove this increase and accounted for 94% of its imports ($48.4 billion) from Africa as AGOA imports of non-energy products increased by 26%.
The main non-energy imports under AGOA were vehicles, iron and steel, and apparel (woven and knit).
US vehicle imports increased by 32.5% reaching $2 billion, with most vehicle imports coming from South Africa while iron and steel imports increased by 44% to $204 million with imports also coming primarily from South Africa as well.
Kenya, Mauritius and Lesotho led the continent’s export of apparel, knit and woven to the US. Apparel exports increased by 21% ($445 million) with knit and woven up by 14% ($409 million).
Energy-related products are the primary imports from all of these countries with the exception of South Africa, for which precious metals dominate US imports from South Africa.
The 2012 AGOA Forum is the 11th annual US-sub-Saharan Africa Trade and Economic Cooperation Forum.
The event is mandated by the African Growth and Opportunity Act (AGOA) and it is the US government’s premier high-level, bilateral event with sub-Saharan Africa.
This year’s theme is, “Enhancing Africa’s Infrastructure for Trade.” The ministerial portion of the Forum will focus on infrastructure development in Africa that supports and promotes trade around four key objectives:
(1) Developing transport, energy, telecommunications, and other “hard” infrastructure to improve African competitiveness and promote regional and US-sub-Saharan Africa trade.
(2) Improving the business climate and effective regulation of key infrastructure sectors that will promote investment in, reduce the costs, and increase productivity in transport, energy, telecommunications and other “soft” infrastructure services that have the greatest impact on US-sub-Saharan Africa trade and investment.
(3) Advancing African regional economic integration efforts by promoting regulatory harmonization, trade facilitation, and strategic development of regional transportation corridors, regional power generation capacity, telecommunications and other infrastructure services that promote integrated/larger markets, cross-border production and regional value chains.
(4) Highlighting trade opportunities for US businesses and benefits of US exports of infrastructure-related products and support for US investment and joint ventures (including public-private partnerships) in sub-Saharan African transport, energy, telecommunications, and other key infrastructure sectors.
The AGOA Forum will bring together over 600 participants, including senior US and African officials, as well as US and African members of the private sector and civil society.
AGOA represents a progressive US trade and investment policy toward the continent working to reduce barriers to trade, increase diversified exports, create jobs, and expand opportunities for Africans.
AGOA provides trade preferences to 40 sub-Saharan African countries that are making progress in economic and political reforms.
Trade between the US and sub-Saharan Africa in 2011 was $95.2 billion.
By Ekow Quandzie