Tanzania proposes renew of AGOA upon expiry

The Guardian . March 22, 2013

Tanzania has put up a request to the US government on the need to extend African Growth and Opportunity Act (AGOA) which is due to expire on 2015 saying the trade programme has benefitted the former country greatly. This was divulged by Industry and Trade Permanent Secretary Joyce Mapunjo in an exclusive interview on the side of the launch of a scientific study titled “Climate, Food and Trade: Where is the Policy Nexus. She would not however, give figures to substantiate the extent to which Tanzanian exporters have benefited from the trade arrangement.

Nevertheless, she said that after knowing the significance of the market, the government has seen that there is a need for the US administration to renew the programme upon expiry.

“I have talked with the US deputy industry and trade secretary and also the US Ambassador to Tanzania on the renew of the agreement even after the expiring in 2015.

Both of them have shown interest in extending the period,” she said.

The launch of the scientific study organised by Economic and Social Foundation (ESRF) and supported by CUTS International was held on Wednesday in Dar es Salaam.

Mapunjo also said that more businesses have responded by selling their products to the US through AGOA ever since the market was launched 13 years ago.

She pointed out that the main challenge facing Tanzanians in intensively exploring the AGOA market is the cost of the transporting the products from Tanzania to the US.

“Some of the entrepreneurs do not afford to transport their products to the US under the AGOA market arrangement, hence they fail to benefit, but we thank God that the number of our products entering the market is increasing every year,” she noted.

The PS also revealed that the government is moving to ensure that the national trader policy is being reviewed so as to assists the business community to export more products.

However, she said that before the inauguration of the AGOA market, most of businessmen in the country used to sell their products in the European markets and those in the Far East.

Many products from Tanzania now find their way to the US market as a result, she added.

The African Growth and Opportunity Act (AGOA) signed into law on May 18, 2000 offers incentives for African countries to export a wide range of products to the US and in so doing, to open their economies and build free markets.

In the first half of 2012, US total trade with sub-Saharan Africa (SSA) reached $48bn, a decrease of 24 percent compared to the same period in 2011.

In accordance with the 7 percent growth of US exports to the world, US exports to SSA (mostly composed of machinery) increased by 4.5 percent, nearly reaching $11bn but representing only 1.4 percent of total US exports to the world.

The top five African destinations for US products continue to be South Africa, Nigeria, Angola, Ghana and Benin.

While exports to South Africa decreased by 4 percent and exports to Nigeria remained constant, exports to Angola increased by 14 percent (increase in US exports of electrical machinery), to Ghana by 10 percent (increase in US exports of machinery), and to Benin by 7 percent (increase in US exports of pharmaceutical products).

The only major increases of US imports from SSA originated from Tanzania (precious stones), and in Senegal (oil).

This first half of 2012, US imports from SSA decreased by 29 percent, falling to $27bn and representing only 2.4 percent of total US imports from the world.

This decrease was mostly due to a 32 percent decrease in US minerals, fuel and oil imports and a 19 percent decrease of precious stones and metals imports from SSA.

US imports from SSA originated, for the most part from Nigeria, Angola, South Africa, Chad, and Congo.

US imports (mostly oil) from Nigeria dropped by 44 percent, from Gabon by 76 percent, and from Ghana by 57 percent.

During this timeframe, AGOA imports totaled $18.7bn, 29 percent less than in the same period in 2011, mainly due to a 32 percent decrease in petroleum product imports.

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