How beneficial is AGOA to Ghana?
The United States of America (USA) under its current leadership has cranked that country’s interest in Sub-Sahara Africa, amidst a crunchy global economy and stiff global race to tap into Africa’s potential.
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In the past, nations seeking partnership with Africa, will do it through military and security ties and support, but the game plan has changed in recent times; there is emphasis on trade and investment.
The United States is currently re-orienting its business community to take keen interest in investing in sub-Sahara Africa. The ‘Doing Business in Africa Campaign’, according to the U.S.
Department of Commerce, “is designed to further encourage economic growth in Sub-Saharan Africa and to assist American businesses to take advantage of the tremendous opportunities the region has to offer.”
The campaign which started last year has already seen high ranking officials of the US Department of Commerce and the business community travel to selected countries in Africa to gauge the investment environment and make some initial commitments. Smartly, the US is leaving no stones unturned as it brings along its Export-Import Bank, U.S. Trade and Development Agency, the
Overseas Private Investment Company – Corporation and so on, along to make their engagements rounded.
“It reflects an unprecedented, whole-of-government approach to increase the level of U.S. trade promotion to the region, to address market barriers, and to expand the availability of trade financing,” Mr John Andersen, Acting Assistant Secretary for Market Access and Compliance, U.S. Department of Commerce, said ahead of the 12th AGOA forum which just ended in the Ethiopian capital, Addis Ababa on August 13.
His comments bring to sharp focus whether countries such as Ghana have been able to take advantage of the opportunities that shoot out of its relationship and engagements with countries such as the United States of America.
The US in 2000 enacted the Africa Growth and Opportunity Act (AGOA) which entitles some 39 sub-Saharan African countries, including Ghana, to export over 6400 items to the US quota-free tariff-free.
Between January and March this year, Ghana has exported a total US$580,000 worth of items to the United States under AGOA. This compares to the US$14.46 million exported for the same period last year.
On yearly basis, Ghana exported a little over US$2 million under AGOA in 2010; over US$414 million in 2011 (boosted by oil exports) and US$16.98 million in 2012.
The numbers (excluding oil exports) mean that Ghana has to redouble its efforts at taking advantage of the AGOA initiative.
In the past, the country tried garments manufacturing and a few other things which were not competitive. However, one area that has proven prospective is the artifacts, sculptures and such non-traditional deco items, which the country has to take seriously.
Already, the US has drawn its game plan – United States businesses should spur economic growth, trade, and investment in the region. The US will do this by encouraging greater U.S. economic engagement, to include providing assistance to U.S. businesses – especially small-and-medium-sized businesses – and the African diaspora-owned businesses to take advantage of the many export and investment opportunities in African markets.
As the US thinks around expanding AGOA and making it work better after the initial 2015 deadline, it will be appropriate for Ghana to also put its house in order and prepare the grounds to take advantage of the opportunity. This is one of the surest and creative ways of stemming youth employment.
The Ministry of Trade has already taken several steps at increasing Ghana’s participation under AGOA and these initiatives should not be allowed to go waste; they should be pursued and brought to fruition. The time to act is now.
By Graphic Business / Ghana