So what exactly is the African Growth Opportunities Act (AGOA) and how does it benefit Uganda?
The African Growth and Opportunity Act (AGOA) was signed into law by President Clinton in May 2000 with the objective of expanding U.S. trade and investment with sub-Saharan Africa, to stimulate economic growth, to encourage economic integration, and to facilitate sub-Saharan Africa’s integration into the global economy. The Act establishes the annual U.S.-sub-Saharan Africa Economic Cooperation Forum (known as the AGOA Forum) to promote a high-level dialogue on trade and investment-related issues. At the center of AGOA are substantial trade preferences that, along with those under the Generalized System of Preferences (GSP), allow virtually all marketable goods produced in AGOA-eligible countries to enter the U.S. market duty-free. The Office of the US Trade Representative reported that in 2016, the United States imported more goods from AGOA-eligible African countries than it exported back to them.
Yet even with such a reportedly overall favorable balance of trade the US still exported $18 million more goods than it imported from Uganda in the same year. Even President Museveni recently conceded that AGOA has not lived up to expectations in Uganda. Indeed, a popular counter argument is that Uganda should focus more on trade with its neighbors like Kenya, Tanzania, the DRC and South Sudan than with the United States.
So let us rethink this whole process starting with a couple of very simple but important questions.
- What can Uganda realistically produce that it can “competitively” export to the United States in quantities that make AGOA worthwhile? Another way to look at this question is to ask what can Uganda produce for export to the United States that is not already being produced better and more competitively in a multitude of other countries?
- Is it possible to overcome the pervasive adverse business environment in Uganda (rampant corruption, under developed manufacturing infrastructure, lack of skilled labor, prohibitive transportation challenges, etc.) that is so often cited as the principle reason inhibiting the positive realization of AGOA benefits?
These very questions are going to be featured in a debate format at the 10th Annual Trade and Investments Forum at the upcoming UNAA convention in Seattle. Invited panelist will present arguments both in opposition and defense of this program.