JOHANNESBURG, South Africa – Despite a recent spat over Russian arms, the African Growth and Opportunities Act (AGOA) continues to bridge the economic gap between Africa and the US. Its future, however, hinges on navigating complex political currents and finding ways to benefit more African nations.
The act, enacted in 2000, grants duty-free access to the US market for eligible African countries, boosting exports and job creation. South Africa, the continent’s economic powerhouse, has emerged as the biggest beneficiary, with American companies flourishing on its soil.
But AGOA’s impact across Africa varies widely. Lesotho’s textile industry, for instance, has thrived, showcasing a potential “positive sum game” for China, the US, and African nations. Other countries, however, haven’t reaped similar rewards.
For Professor John Stremlau, an international relations expert, the key lies in tailoring the act to each country’s needs and leveraging the African Continental Free Trade Area (AfCFTA). “An extension of AGOA beyond 2025, as proposed by both African ministers and the US Congress, could entice investors and drive sustainable growth,” he argues.
However, cracks in the relationship threaten to impede progress. The Lady R incident, where US Ambassador Brigety accused South Africa of arms smuggling for Russia, cast a shadow over the recent AGOA Forum in Johannesburg. Despite a cleared investigation, doubts linger, with Senator Jim Risch proposing a review of South Africa’s eligibility due to its ties with Russia and Iran.
Despite these challenges, optimism prevails. “While the US and South Africa may disagree on Russia, AGOA remains vital for both,” Stremlau emphasizes. “The Coombs bill, another proposed extension, calls for a presidential review of South Africa, but President Biden is unlikely to raise concerns.”
With an eye towards the future, AGOA needs to evolve. The draft renewal act proposes modifying rules of origin to include inputs from North African AfCFTA members, fostering greater regional integration. Moreover, reducing the frequency of eligibility reviews to every three years would provide much-needed stability for investment decisions.
As Stremlau concludes, “AGOA reflects the complexities of the US-Africa relationship. Moving forward, the focus should be on maximizing its benefits for all African nations, fostering a stronger, mutually beneficial economic partnership.”