Cairo, 17 October 2016: – The Africa Growth and Opportunity Act (AGOA), implemented by the United States government, has resulted in a four-fold increase, from $1.4 billion in 2001 to $4.1 billion in 2015, in the continent’s non-oil trade with the country, Florizelle Liser, Assistant U.S. Trade Representative for Africa, said today in Cairo.
In a presentation at the headquarters of the African Export-Import Bank (Afreximbank) during the maiden edition of the Afreximbank Trade and Development Seminar Series, Ms. Liser said that sectors that had benefitted most from AGOA included automobiles, apparel, footwear, prepared fruits and vegetable, nuts and cut flowers.
“AGOA has had success in helping many African countries diversify their export portfolios,” continued Ms. Liser, who added that hundreds of thousands of jobs had been created as a result of the Act.
Noting that Africa currently accounts for only two per cent of U.S. trade, she said that supply-side constraints, including unreliable electricity and transportation, poor ports, lack of transnational highways, and poor access to the internet were among the impediments to trade development on the continent.
Afreximbank President Dr. Benedict Oramah, flanked by Florizelle Liser, Assistant U.S. Trade Representative for Africa, on the left, and Amb. Bouzaher Abdelhamid, Representative of the African Union in Cairo, at a press conference following the maiden edition of the Afreximbank Trade and Development Seminar Series in Cairo
Other factors included low intra-Africa trade, which result in low economies of scale, and the difficulties faced by African producers in meeting U.S. agricultural and other standards, she added.
Ms. Liser identified other Africa-focused trade development initiatives by the U.S. to include the Millennium Challenge Corporation, which had set aside $7.9 billion, or 68 per cent of the total compact portfolio, for Africa.
According to her, the Corporation, which, at $3 billion, is the lead contributor to the U.S. Government’s trade capacity building assistance to AGOA-eligible countries, has dedicated 20 of its 33 compacts to African countries.
Other initiatives included Power Africa, the trade-related capacity programme administered under USAID and unveiled by U.S. President Barak Obama in 2013; Trade Africa, the USAID’s initiative to increase internal and regional trade and expand trade and economic ties; and the U.S. Overseas Private Investment Corporation, the government’s development finance institution which mobilizes private capital to address critical development challenges and which provides investors with financing, political risk insurance, and support for private equity investment funds, when commercial funding cannot be obtained elsewhere.
To build up Africa’s trade capacity, Ms. Liser recommended that African countries should focus on infrastructure development, in particular, electricity and transportation, and should build new roads, bridges and railways to link major trade hubs that would improve economies of scale.
They should also support the ability of commercial banks to modernize and finance small and medium-sized businesses and should strategically identify sectors that could benefit from AGOA and develop them, she said.
Earlier, Afreximbank President Dr. Benedict Oramah said that the fact that despite the size of the U.S. market and the preferential access granted to African countries for 15 years under AGOA, the continent had remained a marginal player in that market, raised questions about why Africa had been unable to better penetrate the market and about what could be done for it to take full advantage of the opportunity presented by AGOA.
The President noted that a deficit of product diversification had been singled out as a key hindrance to Africa’s access the U.S. market, and announced that Afreximbank, had identified the development of industrial parks and special economic zones as a strategic path to accelerating the industrialization of African economies and diversifying their exports.
The Bank had also started an initiative to improve product standards on the continent with the aim of facilitating access to both the U.S. market and other markets, he added.
Afreximbank introduced the Trade and Development Seminar Series in a continuing effort to drive thought leadership on African trade matters by stimulating debate and generating ideas to enlarge opportunities for increased and more diversified African trade.
The Series also aims to build the capacity of Afreximbank staff by giving them up-to-date and cutting-edge knowledge and enhancing their access to current research and information on global and African trade and development finance matters.
Participants in the maiden seminar included ambassadors and other senior members of the diplomatic corps in Egypt, high ranking Egyptian public and private sector officials, heads of multilateral institutions and international organisations based in Egypt, and members of the media.
Afreximbank President Dr. Benedict Oramah (6th right), and Florizelle Liser, Assistant U.S. Trade Representative for Africa (5th right), in group photo with some of the participants in the maiden edition of the Afreximbank Trade and Development Seminar Series in Cairo
Media Contact: Obi Emekekwue (oemekekwue@afreximbank.com; Tel. +202-2456-4238)
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About Afreximbank:
The African Export-Import Bank (Afreximbank) is the foremost Pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors. Its two basic constitutive documents are the Establishment Agreement, which gives it the status of an international organization, and the Charter, which governs its corporate structure and operations. Since 1994, it has approved more than $41 billion in credit facilities for African businesses, including about $6.2 billion in 2015. Afreximbank had total assets of $9.4 billion as at 30 April 2016 and is rated BBB- (Fitch) and Baa2 (Moody’s). The Bank is headquartered in Cairo. For more information, visit: www.afreximbank.com