AfCFTA
US expands AGOA Pact to All of Africa, extends it to 2041
The United States Congress has made proposals to extend the African Growth and Opportunity Act (AGOA) to all 54 African countries and also extend it to 2041.
According to the East African, Senators Chris Coons of Delaware and James Risch of Idaho introduced the bipartisan Agoa Renewal and Improvement Act of 2024, which would see Agoa cover 54 African countries.
The extension is expected to integrate Agoa with the African Continental Free Trade Agreement (AfCFTA) to promote and enhance intra Africa supply chain in the continent.
AGOA was introduced in 2000 and it is set to expire next year.
US Secretary of Commerce Gina Raimondo speaking in Nairobi during an economic event said plans to extend AGOA were on course.
- “President Biden and our administration have made it a priority to renew Agoa. It is the decision of the US Congress, so we have to work with some of the members,” Ms. Raimondo said.
The two US senators who proposed the bill stated that the proposed update of the pact would push beneficiary countries to increase their exports under the agreement.
- “This bipartisan bill aims to refine Agoa’s eligibility criteria, increase transparency, and hold US agencies accountable for their advice to the president,” Senator Risch said.
Senator Coons one of the sponsoring Senators made a case for the renewal and improvement of the AGOA pact and its benefit to the African country.
- “The Agoa Renewal and Improvement Act is necessary to support continued economic development on the continent while further strengthening ties between the United States and partners in sub-Saharan Africa,” said Senator Coons.
AGOA is limited to Sub-Saharan Africa but the new bill passed for its improvement by the US Congress seeks to include North African countries on the promise that they meet the eligibility requirements related to governance, human rights, and foreign policy.
This new addition will help support the growth of Intra African supply chain in the continent.
The US legislators believe that Agoa would provide US businesses interested in sourcing from Africa or investing in its supply chain assurance that the region possesses long-term trade potential.
Thereby, contributing to the growth of the African continent by facilitating mutual trade between the United States and AGOA member countries.
What to Know
- The Agoa Pact covers almost all goods imported to the US from sub-Saharan Africa. The list of covered goods has not been substantially updated since the program was created in 2000. The new proposal by the US Congress seeks to add additional products to the list of covered goods.
- Countries in Africa become ineligible for AGOA once they become high-income economies according to the World Bank’s measure of GDP per Capital. This means that AGOA is only meant for developing economies in the continent.
- Nigeria is eligible for AGOA qualifying for textile and apparel benefits.
