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AGOA: “Why Nigerian products are not competitive in US”

By Henry Umoru
A UNITED States of America consultant, Professor Thomas Andrew O’Keefe warned, Wednesday that a whole lot of reforms must be carried out in the business environment by the government of Nigeria if the country’s export to the US must achieve its set target.

Speaking in Abuja at AGOA interactive forum with the theme: “Entrepreneurship and AGOA: Why Nigerian businesses should export to the US,” organised by the Nigerian Export Promotion Council (NEPC), he said with all the attendant infrastructural problems like power, transport, delay in ports, etc, all add up the cost of production which makes the goods less competitive in the United States markets.

According to him, this explains why the country has not been able to utilise the opportunities provided by the African Growth and Opportunity Act (AGOA), adding that Nigeria in 2008 ranked 8th out of the 40 AGOA beneficiary countries exporting agricultural products to US.

Nigeria’s leading AGOA non-oil products to the US include, shea butter, shrimps, cashew nuts, ginger, gum Arabic, cocoa products, ethnic foods, among others.

Prof. O’Keefe noted that the harsh condition of doing business in Nigeria makes it difficult for the country’s products to become competitive in  US market.

AGOA provides duty free and quota free market preferences for about 6,400 products including apparels, footwear, nuts, etc,  from sub-Saharan African countries to the United States of American markets until 2015. The US imports from sub-Saharan Africa under AGOA were $66.3 billion in 2008, about 29.9 per cent more than in 2007. Out of the amount, US oil imports accounted for 92 per cent of the $66.3 bilion, while non-oil imports accounted for 7.7%  or just $5 billion.
The guest speaker, who noted that the World Bank 2010 special report on doing business in Nigeria was not encouraging as the country ranks number 125 out of 183, said: “One of the problems as highlighted by the report is the cost and time consume in registering a company. In Nigeria it costs about 80 per cent of an average Nigerian annual salary to register a company and takes almost a month compared with Mauritius which is very successful in AGOA. In Mauritius, it cost about 4%  of annual income of an average worker to register a company.”

According to him, as the programme comes to an end in 2015, there was the likelihood for the US government to either extend it for another period or indefinitely or replace it with a bilateral trade arrangement.

“The US companies are complaining that sub-Saharan African countries have not opened its doors for them while the US has given them that opportunity. There is a big move to influence the congress to replace AGOA with a bilateral trade arrangement,” he said.


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