Standard Bank lauds potential of Agoa, AfCFTA

2nd November 2023 By: Tasneem Bulbulia - Senior Contributing Editor Online

The African Growth and Opportunity Act (Agoa) is a pivotal agreement between the US and Africa to support and help grow African industries and markets, posits financial institution Standard Bank.

Speaking during the twentieth Agoa Forum taking place this week, in Johannesburg, Standard Bank Group Corporate and Investment Banking CE Kenny Fihla avered that a considerable renewal of Agoa would help drive trade and support ongoing investment ties between the US and Africa.

He added that it would support sustainable growth, job creation and industrialisation.

“African businesses and markets are becoming increasingly sophisticated and ready to go to the next level. Powerful initiatives like Agoa and the African Continental Free Trade Area (AfCFTA) are key to making this happen,” says Fihla.

Standard Bank cites statistics showing the impact Agoa has on trade.

Total US imports under Agoa were $9.4-billion in 2022, up 57% from $6-billion in 2021.

Agoa non-energy imports increased by 21% in 2022 to $5-billion. The top non-energy import categories included motor vehicles ($1.5-billion), textiles and apparel ($1.4-billion), agricultural products ($679-million) and metals ($626-million).

Standard Bank says it is leveraging its resources to enable access to and participation in regional and global value chains and to ensure partnerships with economies like the US continue.

“We believe that active contributions to public-private dialogues like Agoa are essential to these developments and future growth,” said Fihla.

Agoa grants duty-free, quota-free treatment for exports from eligible sub-Saharan African countries into the US with 35 countries eligible for Agoa benefits in 2022. Agoa is up for renewal in 2025.

Standard Bank says it is also optimistic about the “transformative” impact the AfCFTA can have on intra-regional trade in Africa.

“The AfCFTA will create much-needed efficiencies across Africa’s trade borders. The potential with the world’s biggest economy is immense as financing for priority infrastructure projects, energy and other key investments take place,” outlined Fihla.

Standard Bank believes this single market holds the key to unlocking sustained levels of growth, reducing poverty and scaling up industrial capacity across the continent.

“We are committed to building trusted and efficient domestic or regional value chains integrated into global supply ecosystems. Standard Bank is building finance and trade solutions to help address tariff and non-tariff barriers, which is required to realise the continent’s ambitions.

“Standard Bank is also leading efforts to reduce the impact of climate change by building sustainable solutions. The future is extremely bright – especially if we have the right partners on board,” posited Fihla.