U.S. Trade Representative Katherine Tai said on Tuesday that a 22-year-old U.S. trade initiative providing duty-free access for over 40 African countries is no longer enough to assist their development and that a focus on boosting investment is needed.
The African Growth and Opportunity Act (AGOA) has to be improved to encourage more equitable and sustainable growth, Tai stated after meeting with African colleagues at the beginning of a summit of Sub-Saharan African leaders in Washington.
At a recent conference hosted by the U.S. Export-Import Bank, Tai stated that ministers had informed her that increased investment and access to new markets were crucial.
The ministers’ message, as relayed by Tai, reads as follows: “We want you to work with us on fostering… economic environments that are conducive to greater confidence for investors.”
After telling ministers she intended to do an “honest assessment” of AGOA, which has supported U.S.-Africa commerce for over two decades, Tai has now gotten down to it.
Initially passed in 2000 to encourage growth, development, and governance reforms in Africa, AGOA will run out on September 30, 2025. Removing restrictions on U.S. trade and investment is another prerequisite of the programme.
According to Tai, she was “interested in discussing today ways in which we can improve AGOA – including how we can increase the utilisation rates, particularly among smaller and less-developed countries, as well as ensure that the program’s benefits fully reach all segments of society.”
Only about half of AGOA-eligible countries have strategies to make full use of their benefits under the programme, according to research published last year by the Brookings Institution.
According to Tai, the world has changed dramatically since AGOA’s inception. The COVID-19 pandemic’s aftermath exposed the vulnerability of supply chains and Russia’s invasion of Ukraine, and the climate catastrophe only worsened.
Her optimistic tone toward AGOA stemmed from its potential as a “stepping stone to address regional and global challenges,” especially given Africa’s young and enterprising population.
“The future is Africa, and engaging with this continent is the key to prosperity for all of us,” Tai said.
South Africa, the region’s most developed economy, and oil exporters Nigeria and Angola are among AGOA’s most notable winners.
Kenya has begun a non-tariff trade and investment engagement with Washington, which might lead to more comprehensive trade negotiations with the United States.
Tai announced on Monday that the United States would sign a memorandum of understanding with the African Continental Free Commercial Area, an organisation including 55 African countries, to begin discussions on developing the next stage of the trade cooperation between the two continents.