It was not too long that the 8th Forum of AGOA (Africa Growth and Opportunity Act) concluded in Nairobi. As is the case, it was filled with the usual talk followed by the renewal of pledges and the re-affirmation of commitments to improve/reform the status quo.
AGOA was enacted in 2000. It basically allows developing and mostly sub-Saharan nations, access to the American market with no tariff or custom duty.
This makes for free access to trade and markets between the two. However, this “agreement” is predicated on our meeting certain criteria under the Generalized System of Preferences (GSP) in addition to other socio-political prerequisites such as good governance, the fight against corruption, the rule of law and political pluralism.
So what picture does the status quo paint? Are we really benefiting from AGOA? Well so far, it appears wholly one-sided, in America’s favor.
This points to one of two things, or both in my mind-either we were coerced or duped into agreeing or signing an Act we didn’t understand if at all the choice was ours to, or perhaps there is a defect in implementation as opposed to legislation.
The lion’s share of exports under AGOA provision are petroleum products thus effectively limiting the scope of beneficiary countries and overall purpose.
The remaining, which range from textile materials to agricultural goods are either not up to par by foreign market standards or face unbeatable prices from local producers who are largely subsidized by their government.
In essence it is fair to say that there are a great many barriers to trade in sub-Saharan Africa, many of which are our own doing, others being the machinations of western neocolonialist interests to effectively dispel the notion of free markets.
I am of the firm conviction that in this day and age, Africans by praxis know what we need and how to go about getting it. That is the premise behind the “Dead Aid” debate.
Regional market entities are the logical first step- they assist in identifying and catering to our immediate needs in addition to preparing us for the more distant markets.
They too have to be subject to scrutiny, a good example being the highly acclaimed NAFTA (North American Free Trade Agreement).
It is a regional pact that did well for corporate America whilst wrecking havoc on the Mexican economy.
Further to that we are still losing out based on our inability to add value to our exports. We export raw materials and import finished products.
There is a lot to be done by both the government and us in private enterprise. Local traders and producers need assistance in levelling the playing field i.e. meeting the market requirements in the U.S., transportation infrastructure, technological know-how, financial assistance for exporters similar to the Export Development Fund.
Trade liberalization determines integration, a byword for economic globalization. This however does not come about as a result of pacts or Acts like AGOA.
It is the conditions behind AGOA that open up markets albeit by duress. Point being that everything is politics especially as pertains to accessing markets. We in Africa need to bear that in mind.
The author is a local social commentator