Trade and Industry Minister Dr Rob Davies on Tuesday emphasised the importance of export diversification and industrialisation in Africa.

Speaking in Addis Ababa, Ethiopia, where he was moderating the Africa Trade Week panel discussion on the Africa Growth and Opportunity Act (Agoa) and the Continental Free Trade Area (C-FTA), the Minister added that African countries needed to increase their use of the trade preferences granted by the US under Agoa to attract foreign direct investments into priority sectors.

The session considered Agoa implementation over the remaining period of the legislation that grants trade preference up to 2025. It also reflected on the future of Africa–US trade relations beyond Agoa based on the type of trade arrangements that would support Africa’s regional integration agenda.

“African countries should also ensure that there is alignment between Agoa and their development integration agenda, focus on their industrialisation and preserve policy space aimed at enhancing efforts to diversify their exports base and integrate supply chains to take advantage of market access opportunities under Agoa,” added Davies.

The panel also highlighted the low levels of use of Agoa trade preferences by eligible countries in sub-Saharan Africa. These are largely attributed to supply-side constraints, productive capacity constraints, onerous rules of origin requirements, lack of capacity to meet stringent sanitary and phytosanitary measures, labelling requirements in the US, as well as the fact that some products of export interest to African countries are not covered under Agoa.

In terms of future Africa-US trade relations, the panel stated that the US is expected to advance a trading relationship based on reciprocity. Davies noted that the US proposed a number of options for post-Agoa trade relations. He indicated that these options need to be carefully considered by African countries to ensure their developmental priorities are not compromised.

Panel members agreed that the C-FTA, currently under negotiation, can be a driver of structural transformation for sustained economic growth and enhanced intra-Africa trade and investment in the continent.

Earlier in the Africa Trade Week programme, former South African Ambassador to the World Trade Organisation, Dr Faizel Ismail spoke on a coherent approach to achieving the African Union’s Agenda 2063 through the C-FTA.

He indicated that the success of the C-FTA and the implementation of continent’s integration agenda would be dependent on the adoption of an inclusive approach. He indicated that there was a need for academics and civil society to be more involved in trade policy formulation.

“So they need to identify these challenges and opportunities for Africa. But they also need to become participants in the process of negotiating the C-FTA so that it becomes a living process that includes the dynamics of both the different stakeholders on the ground and also that it is customised to the actual conditions and objectives of the people on the ground,” Faizel added.