Economies in Sub-Saharan international locations stand to learn way more from the African Growth and Opportunity Act (AGOA) than notable commerce statistics, says President Cyril Ramaphosa.
“AGOA enhances the diversification of African economies, enabling them to export value-added merchandise. By enabling African international locations to have preferential entry to the US market, this chance incentivises African international locations to develop and export value-added items and providers. This does and can proceed to cut back Africa’s dependence on major commodities and improve its potential to take part in international worth chains.
“Another important element of AGOA is that it has a capacity-building and technical assistance component that supports African countries in meeting the requirements for accessing the US market. This assistance helps improve Africa’s competitiveness by enhancing skills, knowledge and infrastructure, enabling African businesses to meet international standards,” the President stated in his weekly publication on Monday.
The publication was launched on the again of South Africa internet hosting the twentieth AGOA Forum in Johannesburg, which concluded on Saturday.
AGOA is an initiative of the United States of America aimed toward giving duty-free market entry for producers in eligible international locations in sub-Saharan Africa.
President Ramaphosa additional defined how some economies’ improvement will be enhanced by means of AGOA.
“If prolonged past 2025 for a sufficiently lengthy interval, and if used extra successfully, AGOA can contribute considerably to the additional diversification of African economies. It might allow international locations to supply a wider vary of merchandise utilizing the considerable minerals, metals and agricultural produce. The extension of AGOA might additionally encourage the additional improvement of worth chains throughout completely different international locations.
“We have already seen this taking place in South Africa’s automotive trade, for instance. Local automotive corporations supply leather-based automotive seats from Lesotho, wiring harnesses from Botswana, copper wiring from Zambia, steering wheel parts from Tunisia and rubber from Côte d’Ivoire, Nigeria, Malawi, Ghana and Cameroon. The automobiles are lastly totally manufactured in South Africa, then exported to the US duty-free beneath AGOA.
“This is a great example of the resources and industrial capabilities of different African countries being brought together to produce finished goods that can be sold beyond our shores. This is contributing to the creation of jobs both in South Africa and in other African countries, and raising foreign exchange earnings,” he stated.
Regional integration
President Ramaphosa stated AGOA is usually a catalyst for additional financial integration between international locations.
“Africa has been advocating for the mixing of continental economies for a very long time. AGOA encourages regional integration amongst African international locations. To totally profit from AGOA, international locations are discovering that it is much better to work collectively to extend manufacturing capacities, harmonise requirements and develop regional worth chains.
“This is demonstrated by the experience of 10 countries, including South Africa, in the production of motor vehicles exported to the US. This promotes cooperation, economic integration and the growth of larger regional markets within Africa,” he stated.
Local perspective
The President honed in on a few of the advantages that South Africa already garners from AGOA.
“While [AGOA] could seem to many in our nation to be a relatively distant, even obscure matter, AGOA is a crucial instrument for rising and reworking our economic system. The advantages of AGOA are felt within the lives of our folks by means of elevated financial exercise and the roles that such exercise created.
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“South Africa benefits a great deal from AGOA. Our country is the United States’ largest trading partner in Africa. The US exports more goods to South Africa and imports more goods from South Africa than any other African country. According to US Census Bureau data from 2020, South Africa was the largest destination for US foreign direct investment among AGOA eligible countries,” he stated.
President Ramaphosa emphasised that South Africa attaches nice significance to its relationship with its American counterpart.
“South Africa enormously values its bilateral relationship with the US, one among our largest buying and selling companions, with whom we get pleasure from relations that stretch properly past commerce.
“We look forward to further engagement around the reauthorisation of AGOA at a time when its benefits continue to support our quest for economic growth, job creation and inclusive, sustainable development,” President Ramaphosa stated.
