Trade, Investment Fastest Way to Boost African Economies

By Merle David Kellerhals Jr.
IIP Staff Writer

The 2013 AGOA Forum is being held at the African Union Conference Center in Addis Ababa, Ethiopia, August 12-13.
The 2013 AGOA Forum is being held at the African Union Conference Center in Addis Ababa, Ethiopia, August 12-13.

Washington,
August 1, 2013

African nations and the United States agree open trade and investment are the fastest ways for African economies to boost economic growth, spur development and reduce poverty, a senior U.S. official says.

A crucial tool in fostering that growth has been a U.S. trade initiative — the African Growth and Opportunity Act (AGOA) — enacted in 2000, says Cynthia Akuetteh, deputy assistant secretary of state for African affairs.

“We view Africa as one of the most important emerging regions in the world, and we see tremendous opportunity to significantly increase our economic engagement,” Akuetteh told journalists July 31 during a Washington Foreign Press Center briefing on the upcoming 2103 AGOA Forum. The briefing also was carried by teleconference for African journalists at the State Department’s African Regional Media Hub in Johannesburg, South Africa.

AGOA aims to build a trading partnership with communities across sub-Saharan Africa for a broad range of commodities from oil and food products to consumer goods like umbrellas that benefit from the duty-free status granted to 39 participating nations. According to recent research by the Washington-based Bookings Institution, AGOA has helped create some 300,000 jobs in those countries.

The future of AGOA and its benefits will be the focus of the 2013 U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum, also known as the AGOA Forum, hosted by Ethiopia in association with the United States. The forum is being held August 12-13 in Addis Ababa at the African Union Conference Center.

The U.S. delegation will be led by U.S. Trade Representative Mike Froman and a host of senior U.S. officials, Assistant USTR Florizelle Liser said at the briefing. U.S. agencies represented include the departments of State, Treasury and Commerce and the U.S. Agency for International Development.

Akuetteh said the forum sessions will focus on three areas — the U.S. perspective on past cooperation and the Obama administration’s thoughts on the future economic relationship; the Africans’ perspective on future economic relations; and the U.S. congressional perspective. The latter perspective is crucial because the AGOA is set for reauthorization in 2015, and the Obama administration has pledged to work for and support its renewal.

“The forum also presents an opportunity to launch a high-level dialogue on AGOA’s successes and challenges and on the program’s future,” Akuetteh said.

Acting Assistant Commerce Secretary John Andersen told journalists it is no secret that President Obama views Africa as one of the world’s key emerging areas. “Seven of the 10 fastest-growing countries in the world are in sub-Saharan Africa, and some of the highest growth rates projected for this year or next are also in the region,” he added.

The United States will highlight a number of initiatives at the Ethiopia forum including the “Doing Business in Africa Campaign,” which is designed to further economic growth in sub-Saharan Africa and to assist American businesses with access opportunities in the region, he said.

Andersen added that even though many sub-Saharan African nations are fairly small markets individually, as a group they are quite large. That size gives them greater leverage in global trade and investment. In addition to fostering broader trade, AGOA also is designed to foster regional economic integration, he said.

The effect of AGOA on trade and investment outside Africa has to be measured in a variety of ways, but data suggest that it is working and it is improving the lives and livelihoods of Africans, Liser told journalists.

“Our view has been that Africa is a large and fast-growing market,” she said. “It also has a rapidly growing middle class, and there’s a youth bulge and the products and services that that group wants and desires, all of this is having an impact on the way that lots of countries around the world are interacting with Africa.”

She added that although other nations may trade more with sub-Saharan Africa, the United States remains the largest market for Africa’s value-added products.

“So we have to look not just at the total or overall numbers for the trade, we have to look at the patterns of the trade, and then we have to look at what’s happening in particular sectors of trade as well,” Liser said.

SUSTAINABLE TRANSFORMATION

The 2013 forum’s theme — proposed by the African members — is “Sustainable Transformation through Trade and Technology,” Akuetteh said. The ministerial-level event will include a dialogue on the future of U.S.-Africa trade and economic cooperation.

The forum will be preceded by private sector and civil society programs, as well as a program arranged by the Ethiopian African Women’s Entrepreneurship Program (AWEP), on August 10 and 11. The Corporate Council on Africa in collaboration with the Ethiopian Chambers of Commerce and Sectoral Associations is organizing a U.S.–sub-Saharan Africa Trade Exhibition to run concurrent with the forum.

AGOA is the United States’ signature trade initiative with sub-Saharan Africa, according to the State Department. The United States is strongly committed to expanding trade and investment, and to supporting broad-based economic opportunity and prosperity in sub-Saharan Africa.

 

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