AFRICAN GROWTH AND OPPORTUNITY ACT

Background

The African Growth and Opportunity Act (AGOA) was first signed into law on May 18, 2000. It was later amended on August 6, 2002 to expand the preferential access for imports from eligible Sub-Saharan countries. In light of the Act’s potential, President George W. Bush has recently pledged to extend the AGOA beyond 2008.

Objectives

The objective of the AGOA is to facilitate trade between the United States and the African continent, thereby using trade as a vehicle to decrease poverty and increase economic progress and create stronger markets in the countries in question. The AGOA also aims to reform old economies by creating new incentives for good governance, sustained business enterprises and investments, as well as the creation of jobs.

AGOA in Action

The AGOA works by placing a zero import duty (duty-free & quota-free) under the Generalized System of Preferences (GSP). The AGOA GSP applies to more than 6,400 items. These provisions are in effect up to September 30, 2008 –two years beyond the recognized GSP. The list of products eligible for export by Sub-Saharan countries part of the AGOA, which include separate provisions with regard to textiles and apparel, has been expanded to include footwear, luggage, handbags, watches and flatware. This indeed makes investing in Sub-Saharan Africa a very interesting opportunity.

Requirements

To be eligible for the AGOA, countries had to provide evidence that they are working towards implementing specific criteria set forth by the United States. Developmental efforts such as increasing access to health care and education as well as working towards the protection of human rights and upholding workers rights are some of the areas within which members of the AGOA have striven to increase awareness and make tangible changes.

There are currently 45 Sub-Saharan countries benefiting from the AGOA. All the seventeen African countries participating in the Third Africa Asia Business Forum are eligible for the AGOA.

Conclusion

With the support of the United States, the AGOA has proven successful in its fledgling stage and has benefited its participants by encouraging confidence in investors looking towards the African continent for opportunities and maximal profits.

For further information on the AGOA please visit: http://www.agoa.gov