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Stakeholders to drive trade, investment at upcoming AGOA Forum

BY Daniel Gumm

When hundreds of private and public sector stakeholders meet for the 10th annual American Growth Opportunity Act, AGOA Forum in Lusaka, Zambia, June 8-11, the outcomes of their meetings will continue to shape trade in West Africa for years to come.

Enhancing trade through increased competitiveness, value addition and deeper regional integration — the forum’s theme — is of interest to anyone doing business in the region.

The three issues are linked — each driving the other in myriad ways. Deeper regional integration is critical to its success.

The barriers to trade, tariff and non-tariff alike, run the gamut. Corruption flourishes at borders — bribes are often the only way to get products across.

That eats into the bottom line and, more grandly, sets up West Africa as a place to simply source raw materials for processing elsewhere rather than a place to develop value addition, which creates better jobs — a key to economic development.

Value addition and increased competitiveness can be driven by increased investment — domestic and international.

Labour is one area where companies are seeing improvements. Skilled and semi-skilled labour has increased. And, unlike other world regions, Africa’s working age population is expected to double in number by 2025, according to the United Nations.

Investors’ “comfort” has significant implications for West Africa’s trade competitiveness: Practically speaking, investment means improved competitiveness. For example, new investment leads to the transfer of knowledge and experience that makes West African companies more productive and more efficient.

Implemented since 2001, AGOA was the first strategic trade policy towards African countries. Eliminating tariffs has significantly impacted African countries’ economies, creating hundreds of thousands of jobs, particularly in the apparel sector.

For their part, countries need to develop strategies to make the most of the opportunities AGOA presents.

One critical AGOA issue to consider, however, is the third-country fabric exemption in the AGOA rules, which allows apparel manufacturers in eligible African countries to benefit from tariff-free status when they use fabric sourced from another country.


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