US and African Officials, Private Sector Leaders Call For Swift AGOA Renewal, As 'Uncertainty' Stalls Potential Business Prospects

Watch the 2024 AGOA Private Sector Forum on the U.S. Institute of Peace website.

As the 2024 African Growth and Opportunity Act (AGOA) Forum comes to a close on July 26, private sector leaders from the U.S. and Africa are sounding the alarm that businesses exporting under the U.S.-Africa trade law risk losing business and new market prospects in Africa if the law is not swiftly renewed.

At this year’s AGOA Private Sector Forum, U.S. and African government officials and private sector leaders gathered on July 24 in Washington, D.C., to provide insights and policy recommendations on how to enhance trade facilitation and utilization under AGOA and put forth a vision for the next phase in the U.S.-Africa trade and investment partnership.

Hosted by the Corporate Council on Africa, the U.S. Department of Commerce, and the U.S. Institute of Peace, the AGOA Private Sector Forum sought to help inform proceedings during the official U.S.-Africa trade ministerial meetings on AGOA on July 25-26 in Washington, D.C.

Enacted in 2000, AGOA provides eligible sub-Saharan African countries with duty-free access to the U.S. market for nearly 7,000 eligible products under AGOA and the Generalized System of Preferences program. If the U.S. Congress does not reauthorize AGOA, the U.S.-Africa trade law is set to expire in September 2025.

Saying “America is all in on Africa,” U.S. President Joe Biden issued a statement calling on Congress to quickly reauthorize and modernize AGOA, touting the U.S.-Africa trade law’s benefits in promoting sustainable economic growth and resilient supply chains on both sides of the Atlantic. “Together, let’s ensure future generations of Americans and Africans can meet the challenges and seize the opportunities of the decades ahead”

In opening remarks at the private sector forum, U.S. Secretary of State Antony J. Blinken said AGOA has created incentives for African governments to develop more stable and transparent business environments that attract more direct investment. Katerine Tai, U.S. Trade Representative, said the next iteration of AGOA should “bring more voices to the table”, especially women, youth, smaller companies, and the African diaspora.

The AGOA Private Sector Forum could not have come at a more pivotal time in the U.S.-Africa trade and investment partnership.

The AGOA reauthorization bill, introduced in April by U.S. Senators Chris Coons (D-Del.) and Jim Risch (R-Idaho), to extend AGOA until 2041 and strengthen provisions in the U.S.-Africa trade program has stalled in Congress. The U.S. Congress previously reauthorized AGOA in 2004 and 2015.

Hon. Parks Tau, Minister of Trade, Industry and Competition with the Republic of South Africa told attendees at the AGOA Private Sector Forum that extending AGOA would send a strong statement to African countries that the United States is committed to U.S.-Africa trade over the long term. “That creates great opportunities for African countries to enhance their own capital investments, but also the ability to attract investors on the continent,” stated Tau, on the potential impact of an AGOA renewal.

If AGOA renewal continues to be delayed, U.S. and African companies exporting under AGOA warned about growing setbacks in long-term planning as some U.S. buyers are waiting for greater assurance that AGOA will be reauthorized before signing contracts.

Gaborone-based Diamond Trading Company Botswana, which produces high-quality diamond jewelry exports under AGOA.

Jas Bedi, Managing Director of Bedi Investments, a Kenya-based manufacturer of textiles and garments, cited "buyer nervousness" due to increased uncertainty around AGOA renewal.

"We've got uncertainty in the air," said Bedi, who also chairs the Kenya Private Sector Alliance (KEPSA). “It is crucial that [AGOA reauthorization] is done, and if it's done sooner rather than later, I think it'll keep jobs on the continent,” said Bedi.

For Seattle-based apparel company SanMar Corporation, AGOA’s trade benefits attracted the company to shift its sourcing from China to AGOA-eligible African countries. In 2010—the company’s first year using AGOA—46 percent of SanMar’s apparel imports were from China, compared to only 6 percent today.

Under AGOA, SanMar imported 58 million apparel pieces from six AGOA-eligible countries into the U.S. market in 2023. Despite the tremendous market opportunities under AGOA, SanMar has paused scaling into other AGOA-eligible countries until the trade law’s reauthorization passage.

“We're looking right now at the expiration, and I do worry…about the lack of urgency,” said Melissa Nelson, General Counsel and Corporate Secretary at SanMar Corporation, which employs nearly 9,000 people in Africa and over 5,000 in the U.S. “No matter how many people tell our company, ‘Don't worry about it, it's going to be renewed’… we do not have confidence that it’s going to be renewed,” said Nelson.

Members of the U.S. Chamber of Commerce’s President’s Advisory Council on Doing Business in Africa (PAC-DBIA) offered a preview of the Council's recommendations for renewing AGOA at the forum.

“We fully support the swift renewal of AGOA,” said the Council’s Co-chair Rahama Wright, Founder and CEO of Shea Yeleen, which exports a line of ethically- and locally-sourced shea beauty products from West Africa into U.S. markets. The Council also recommended a 20-year extension of the U.S.-Africa trade law.

Concrete approaches to boost two-way trade and ensure African companies take full advantage of AGOA were also highlighted during the forum.

British Robinson, Coordinator of the U.S. government’s Prosper Africa, drew attention to the recently-launched Africa Trade Desk, a platform that connects African agricultural producers with more than 20,000 American retailers, including Costco, Walmart, Target, Kroger, and Dollar General. The Africa Trade Desk, a venture of Prosper Africa, is expected to facilitate at least $300 million in export sales between Africa and the United States in less than two years.

“It's an innovative demand-driven approach,” said Coordinator Robinson.“This is a new way of doing business for the US government, not just looking at AGOA as the access point.” Instead, this trade facilitation tool will leverage real-time data and align African suppliers with U.S. consumer demands.

The forum explored strategies for AGOA to bolster and advance the African Continental Free Trade Agreement (AfCFTA), an intra-Africa trade pact. “This will be a ‘game changer’ in terms of creating opportunities for regional and continental value chains while making African companies much more competitive and stronger partners,” said Florie Liser, President of the Corporate Council on Africa (CCA), during the forum’s opening session.

“We see a lot of potential with the AfCFTA being put in place and with AGOA,” emphasized Henock Teferra Shawl, Boeing’s Managing Director for Africa, adding that the success of AGOA will depend on the success of the AfCFTA.

“At Boeing, we are very, very bullish about the prospects of the African market,” said Shawl. Over the next 20 years, Boeing forecasts that there will be a need for more than a thousand aircraft. Integrating Africa’s fragmented markets into a single commercial market would enhance the attractiveness of African countries for U.S. investment, he said.

Visit the U.S. Institute of Peace event page for more information on the 2024 AGOA Private Sector Forum.