It remains unclear about whether AGOA will be renewed past 2015 – which inevitably undermines faith in the agreement as part of a long-term commitment to enhancing trade between the US and Africa – and may put off prospective participants that do not feel assured that the initiative is of long-term benefit or can be relied upon beyond 2015.
Some have raised questions about why only a handful of African countries have really exploited the opportunities offered up by the AGOA initiative even though 37 countries technically qualify, and why just 300 of the 6,400 products eligible to be exported to the US duty free have made use of AGOA. Some have also suggested that a wider range of products be made eligible for duty free imports as well.
US taken to task
Others are critical of the lack of support for US businesses that want to set up shop in Africa. Although the commerce department is increasing its presence in Africa, up until now its footprint on the continent has been minimal and it has a lot of catching up to do. Presently there are offices in just three of the main economies for the region – Nigeria, South Africa and Kenya.
Although US embassies around the world have experienced a shift towards integrating business promotion into their diplomatic aims, the US clearly still has some way to go before there is a sufficient support infrastructure in place to help US firms for whom Africa is an enticing but also unfamiliar and challenging market.
The extent to which the US is lagging behind in this area is even more obvious when its commercial support infrastructure is compared with China’s. China is estimated to have around 155 commercial attachés in sub-Saharan Africa.
This translates as over three for every country.
This state of affairs has prompted US think-tank, Brookings, to advise that USAID should turn existing trade hubs into trade and investment centres, which would help US companies as they move into Africa, and also work with African firms wanting to export to the US.
Brookings has suggested that these new centres should draw on local workers “to keep US companies informed of market developments, among other services. The cost to staff these centres to work with US companies would be minimal, and companies could pay for services”.
The US has also been accused of being slow to pick up on a shift among the world’s leading economies towards building relationships with Africa based on partnerships of equals. China is widely seen as the trailblazer in this respect. Analysts point out that historically, US relations with Africa have been defined largely by aid initiatives, something which still strongly defined relations as recently as during the George W Bush administration.
It seems that the US is keen to change this but wants to balance its new emphasis on commercial collaboration with ‘Africa-realism’ – a commitment to calling the continent out on problems relating to poor governance, corruption and conflict. This was made clear during Pritzker’s visit in May when she spoke of Nigeria’s need to “root out corruption”, for example.
The US’s relations with Africa go deep into history – millions of Africans taken as slaves provided the backbone of the economic structure of the New World and freed slaves created the first independent state in Africa, Liberia. Economic ties also go deep with rubber and essential minerals from Africa providing vital inputs to US industry.
It is to be hoped that this new engagement with the continent, in which the private sector is expected to dominate, will provide the counterbalance to Chinese influence that Africa needs.