Breaking News

Transport hurdles limit AGOA benefits in Africa

BY Daniel Gumm

LACK of developed transportation network in Africa is among the hurdles hindering landlocked countries from maximising the benefits from the African Growth and Opportunities Act (AGOA).

This was highlighted during the just concluded AGOA forum, where US and Sub-Saharan African governments and private sector discussed the trade opportunities and challenges among AGOA member countries.

“Most of the roads connected to the ports were congested which caused inefficiency at the said ports, and particularly prevented landlocked countries from taking advantage of AGOA,” a statement said.

Rwanda is among the landlocked countries in the East African Community experiencing transportation bottlenecks. The meeting acknowledged the need to develop an integrated transportation network which links roads and rails to the ports.
East African countries such as Rwanda, Burundi and Uganda rely on Mombasa Port managed by Kenya Ports Authority and Dar port in Tanzania.

Due to poor infrastructure, the two giant ports have been blamed for delaying goods to their destinations. It takes 24 days for a container to travel from Mombasa to Kigali and on average it takes about 20 days for a container to go through the port to Nairobi.

AGOA is the cornerstone of U.S. economic engagement with the countries of Sub-Saharan Africa. Under this arrangement, qualifying exports from African countries enter the US market duty and quota free. The arrangement is more beneficial to the textile industry because of the Third-country fabric provision. This provision allows countries to source raw material from third countries that is; countries which are not beneficiaries under AGOA.

In 2011, 40 AGOA countries exported $53.7 billion in products to the United States contributing to economic growth for African nations as well as creating new opportunities for American businesses to export U.S. goods and services.

The AGOA meeting reviewed the idea of selling the opportunities that Sub-Saharan Africa offered to U.S investors and consumers, while also acknowledging the challenges faced as well as the benefits of good quality competitive products from Africa under AGOA for U.S consumers and importers.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.