Trade and Development

In 2000, the African Growth and Opportunity Act (AGOA) was enacted with a bold promise to serve as the bridge connecting Sub-Saharan Africa (SSA) to the U.S. market. AGOA was designed to offer unilateral, duty – free access to over 1800 products in the U.S., in addition to the more than 5,000 products that are also eligible for duty-free access under the Generalized System of Preferences (GSP) program, to catalyze export-led growth, attract foreign direct investment and accelerate industrialization across Africa. As AGOA was set to lapse in 2025 and following several negotiations for the Agreement’s extension to December 2028, today the verdict is mixed, and the economic landscape tells a complicated story. In this blog, I argue that the question before African policymakers is no longer whether AGOA is renewed, but what the repeated cycle of lapse and extension reveals: that a unilateral preference regime, however long its runway, cannot substitute for the regional integration, rules-of-origin harmonization, and mid-stream industrial capabilities that only Africans can build for themselves.

In the pecking order of cabinet ministries, Trade and Industry tends to come close to the bottom. What is more, is that Trade and Industry Ministries typically get allocations of less than 1 percent of national budgets. No wonder, then, that ecosystems don’t exist that would facilitate production and trade of high-value, transformative products with high impact in the broader economy. Yet, the rhetoric about export-led development is ceaseless. This is certainly the case in practically all African countries.