South Africa has welcomed the commitment by US President Barack Obama to support the continuation and enhancement of the African Growth and Opportunity Act (AGOA.)
Obama made the remarks at the US-Africa Business Forum in Washington on Tuesday. His backing of a new AGOA term came as a pleasant surprise to many, who have been waiting to hear Obama’s position on the issue. US law makers are expected to vote on the renewal of AGOA when the current commitment term expires next year.
“We still do the vast majority of our trade with just three countries - South Africa, Nigeria and Angola. It’s still heavily weighted towards the energy sector. We need more Africans, including women and small- and medium-sized businesses, getting their goods to market,” Obama said.
“All leaders in Congress - Democrats and Republicans - have said they want to move forward. So I’m optimistic we can work with Congress to renew and modernise AGOA before it expires, renew it for the long term. We need to get that done.”
South Africa’s Ambassador to the United States, Ebrahim Rasool, welcomed Obama’s commitment to back a renewal of the scheme.
“On the investment side, the United State is the biggest source of foreign investment to South Africa so AGOA must continue and we want to see the inclusion of South Africa in the programme,” Rasool told SAnews in Washington.
“For South Africa, if we can leave here with a firm commitment that AGOA will continue and that South Africa will continue to be in it, that will great for us because that will mean we save US$9 billon.”
AGOA is a legislation that provides duty-free market access to the United States for qualifying sub-Saharan African countries by extending preferences on more than 4 600 products.
It also provides duty-free access to all clothing (as well as certain textile) exports from countries that qualify. Through the act, South Africa has reportedly exported significant quantities of manufactured goods, most notably about 60 000 automobiles a year.
Since its inception in 2002, AGOA has achieved a great deal for both the United States and African countries that benefit from it. Its work is not yet completed.
AGOA emphasises on Africa’s emerging textile and apparel industry as the primary sector for trade benefits.