Ramaphosa seeks lengthy and inclusive Agoa extension to stimulate investment, regional value chains

3rd November 2023 By: Terence Creamer - Creamer Media Editor

Ramaphosa seeks lengthy and inclusive Agoa extension to stimulate investment, regional value chains

President Cyril Ramaphosa

South Africa’s President Cyril Ramaphosa has called on the US Congress to approve an early and “sufficiently lengthy” extension of the Africa Growth and Opportunity Act (Agoa) to provide investors looking to take advantage of the scheme’s trade benefits with the certainty they need to “build new factories on the African continent”.

Opening the Agoa Forum in Johannesburg on Friday, Ramaphosa also underlined the “great value” of retaining all beneficiary countries to support the development of regional value chains and help industrialisation on the continent.

His address followed confirmation that US President Joe Biden “strongly” supported a reauthorisation of the trade arrangement by Congress beyond its current 2025 expiry, as well as an announcement that Agoa benefits would be terminated on January 1, 2024, for Gabon, Niger, the Central African Republic and Uganda.

Gabon and Niger’s eligibility had been terminated because of “unconstitutional changes of government”, while benefits were withdrawn from the Central African Republic and Uganda because of “gross violations of internationally recognised human rights being perpetrated by those governments”.

Ahead of the announcement, which included confirmation that Mauritania’s eligibility would be reinstated, there were 35 Agoa-eligible countries, against the 49 countries that are potentially eligible for inclusion under the unilateral scheme, which has been in place since 2000.

South Africa’s own eligibility was thrown into doubt earlier this year when Ambassador Reuben Brigety alleged in May that South Africa had loaded arms and ammunition on to the sanctioned Russian vessel, the Lady R, in December.

Ramaphosa commissioned a panel, led by retired Judge Phineas Mojapelo, to investigate the matter. While only an executive summary of the report was released, indicating the allegations to be incorrect, relations improved to the point where it was confirmed on September 20 that the forum would proceed in Johannesburg.

Ramaphosa said an early reauthorisation and renewal would help to ensure that the legislation achieved its objectives and reached its full potential.

“An early renewal can help to strengthen trade and investment.

“At the same time, we see potential to enhance Agoa with reforms that will add more products and will make it easier for small and medium-sized businesses to use it,” Ramaphosa said.

Total goods imports into the US under Agoa recovered to $10-billion in 2022 from $6.8-billion in 2021, and South Africa emerged as the top exporter, with $3.6-billion in exports to the US last year.

In his video address to the forum, Secretary of State Antony Blinken said that the Biden administration did not only want to extend Agoa but work with Congress “to make it even better”, without elaborating on any possible improvements.

In her address, US Trade Representative Ambassador Katherine Tai argued that “many things have changed” since the establishment of the scheme 23 years ago and suggested that the partnership should be modernised and transformed.

She indicated that discussions should also focus on improving utilisation rates, exploring additional trade tools to complement the Agoa relationship, collaborating on the implementation of the African Continental Free Trade Area, and using the multilateral trading system for the benefit of underserved groups.