- Junior trade minister concedes failure to tap into US market
- AGOA exports declined from P13m in 2007 to zero today
The Assistant Minister of Trade and Industry, Beauty Manake, has spoken candidly about how Botswana has dismally failed to reap the benefits of exporting goods to the lucrative US market through the African Growth Opportunity Act (AGOA).
Speaking in Parliament this week, Manake said exports under AGOA have declined sharply, going from P13.5 million in 2017 to a negligible level before the current nought.
She was responding to a question from the MP for Serowe West, Leepetswe Lesedi, about what benefits Botswana has derived from AGOA and value in monetary terms. Manake identified insufficient investment from the US, high production and transport costs and high costs of compliance with US technical regulations (standards) as some of the challenges experienced by African countries in exporting to the US under AGOA.
“AGOA is not a long-term trade agreement, which impacts investment decisions,” Minister Manake said. “Botswana is hosting the US-Africa Business Summit from 11th -14th July 2023 to address these challenges. “And it is a unilateral agreement. The US holds the sole power to revoke AGOA for countries it deems to violate internationally-recognised workers’ rights and other human rights.” She told Parliament that 2000 to 2016, 16 manufacturing companies registered with Botswana Unified Revenue Service (BURS) to export textiles and apparel (garments) to the US under AGOA.
However, she explained, the companies closed down over the years while the last one relocated to Lesotho after making its last export. On a positive note, Manake said about 6 500 product line tariffs have either been removed or reduced to allow beneficiary countries to export to the US market at competitive rates.
“These reduced tariffs allow African exports to be cheaper in the US compared to the countries which do not have an agreement with the US or are not AGOA beneficiaries,” she said. Manake told Parliament that inspite of the challenges experienced, capacity building to facilitate exports of Morula oil products, donkey milk products, organic honey, food preparations, handcrafted jewellery and jewelleyry made from semi-precious stones is ongoing.
AGOA is a trade arrangement between the US and nearly 50 sub-Saharan African countries, including Botswana. It was established in 2000 to provide relaxed access to the American market. The quality of products has been a major issue of debate that saw Botswana and other African countries fail to fully penetrate and exploit the US market through the special arrangement worth billions of dollars per annum.
Due to the strict compliance guidelines set by the US government for exports under AGOA, some of African countries, namely Ethiopia, Guinea and Mali, have been delisted. The delisting of the countries followed a pronouncement by US President Joe Biden to the US Congress that the government intended to blacklist three African countries where military coups had taken place. AGOA is set to expire in December 2025.