AGOA ZAMBIA CIVIL SOCIETY
CONCLAVE
KAPINGILA HOUSE
25TH JULY2012
Hillary M.J. Kumwenda
MINISTRY OF COMMERCE, TRADE AND INDUSTRY
OVERVIEW
•
•
•
•
Introduction to AGOA
Zambia’s Performance
Current Developments
Review of Africa-US Trade an Economic
Cooperation under AGOA
• Strategies/ Initiatives pursued by Zambia
• Role of Civil Society
• Conclusion
Introduction
• AGOA is a United States Trade Act that significantly
enhances U.S. market access for Sub Saharan Africa.
•
In May 2000 the U.S President signed into law the
historic Trade & Development Act of 2000 containing
AGOA whose objective was to promote trade flows
between the US and the Sub Saharan African
countries, increase investment opportunities for both
U.S. investors and business in Sub Saharan African
and strengthen Sub Saharan African participation in
global trade and promote economic development.
• The Act originally covered the 8-year period from
October 2000 to September 2008, but amendments
signed into law in July 2004 further extended AGOA to
2015.
Introduction (CONT’D)1
• At the same time, a special dispensation relating
to apparel Provisions was extended by three years
to 2007.
• On 20 December 2006, key changes to AGOA
were signed into law extending the garment
provisions to 2012.
• AGOA builds on existing U.S. trade programs by
expanding the (duty-free) benefits previously
available only under the Generalized System of
Preferences (GSP) program.
Introduction (CONT’D)2
• Duty-free access to the U.S. market under
the combined AGOA/GSP program stands
at approximately 7,000 product tariff lines
for preferential market access.
• Notably, these include items such as
apparel and footwear, wine, certain motor
vehicle components, a variety of
agricultural products, chemicals, steel and
others.
Zambia’s Performance
• Since the Launch of AGOA in December 2001
by Zambia, there was growing interest among
the business community.
YEAR
DIRECTION OF TRADE WITH THE U.S/
EVENTS
VALUE
Jan to Oct
2002
Direct Exports included mainly leguminous
vegetables and freshly cut flowers.
US$ 7,000
trial orders
Jan 2003 to
Dec 2004
DF exports under AGOA & GSP were
US$510,000 & in 2004 grew to US$2.6 million.
US$ 2.6 m
Jan to June
2008-AGOA
induced EX
Exports were US$ 119,000 for 2005 & US$
162,000 for 2006 over the same period.
Estimated AGOA induced regional exports for
cotton Yarn exceeded US$ 8 million
2010
When Zambia took over Chairmanship of AGOA
US$ 30 m
2011
When Zambia Hosted the 10th AGOA Forum
US$ 47 m
US$ 8 m
Zambia’s Performance (CONT’D)
• Products and sub-sectors of export interests that
have been identified by Zambia include :
Honey, Coffee, Specialty foods, Paprika/spices,
Leather, Gemstones among others;
• Export of agricultural products to the US is subject
to a pest risk assessment
• Zambia acceded to the textile and clothing
provision which provides that LDCs from Sub
Saharan Africa import third country yarn and fabric
to make apparel to export to America duty free
and quota free.
Current Developments
• Relaxation of rules of origin to enhance
exports and support regional integration
• Extension of AGOA beyond 2015.
• Extension of the Third Country Fabric
Provision to 2015
• Pledged US$ 30 million per year for 4 years
towards boosting trade capacity
• Pledged $2 million towards AWEP
• Future of AGOA beyond 2015
Review of Africa-US Trade and Economic
Cooperation under AGOA
Trends and Structure of Trade and Investment Flows

Total US trade(imports plus exports) with African
countries except NA in 2010 and 2011 grew by
29.5% and 17% respectively

Top US export markets were SA (7.2B) Nigeria
(4.8B), Angola (1.5B), Ghana(1.1B) and
Ethiopia(689M)

Top exports to Africa excluding NA were
machinery and parts, transportation
equipment, cereals, mineral fuels, aircraft and
parts and electrical machinery.
Review of Africa-US Trade an Economic
Cooperation under AGOA
AGOA Benefits to US and African countriesexcluding NA

Africa hosts about 1% of US FDI

Top US FDI destinations in 2011 were Mauritius,
SA and Angola

The nature of the US FDI is largely
concentrated in mining and extractive
industries.
 With oil and gas contributing the largest share of
imports to US under AGOA, it is clear that AGOA
has contributed to the industrialization of US and
job creation
Review of Africa-US Trade an Economic
Cooperation under AGOA
AGOA Benefits to US and African countriesexcluding NA

Africa has become a major source of energy
imports to US thereby assisting US in reducing its
dependency on the Middle East sources

Top US oil companies accounts for 75% of US
investments in Africa

In 2010, as many as about 30 000 US
Exporting firms of various sizes were identified
to have business linkages with Africa.

2175 of such companies employ more than
500 employees each.
Review of Africa-US Trade an Economic
Cooperation under AGOA
 AGOA Benefits to US and African countriesexcluding NA

Studies undertaken have indicated that African
trade with US has grown under AGOA increasing
more than five fold from 5B in 2001 to $28B in
2008

Top African exporting countries to US are
Lesotho, Swaziland, Ghana, Uganda and Kenya

Such exports comprise of Textiles, Flowers
etc.
Review of Africa-US Trade an Economic
Cooperation under AGOA
AGOA Challenges

The lack of diversification of African exports to
US-characterized by primary commodities and
unprocessed raw materials

African share in the US market did not increase
per set objectives-The current levels of trade and
investment between both sides does not reflect
the position of US as the world biggest economy
and importer and major source of FDI

Neither does it reflect the rising profile of Africa as
the next frontier of global economic growth
Framework for Future (Post AGOA) Africa-US
Trade and Economic Cooperation
In light of limited growth of US-Africa trade and
economic cooperation and scheduled expiry of
AGOA in 2015, the passage of legislation aimed
at achieving the expansion of trade and
investment flows between US and Africa,
diversification of African economies, promotion
of sustained growth and alleviation of poverty in
Africa and better integration of the continent into
global economy remains valid

Any Post 2015 cooperation regime must draw
lessons from past frameworks and build a new
arrangement taking into account the current
realities of global economic environments
Framework for Future (Post AGOA) Africa-US
Trade and Economic Cooperation
An Enhanced AGOA

whilst market access may be necessary, it is not
sufficient condition for the enhancement of trade
and economic growth of beneficiary countries due
to a host of supply side constraints as witnessed
during the AGOA, ACP-EU Lome Conventions
and Cotonou Partnerships Agreements(similar
arrangements)

Enhanced AGOA will need to complement market
access concessions with targeted programmes at
economic transformation, building productivity
capacities and the development of infrastructure.
Strategies/ Initiatives pursued by Zambia
• The Zambian & U.S & Governments decided to
improve both the trade and investment outlook by
working together under the framework of the
Bilateral Working Group on Trade, Invst & AGOA.
• The Working Group was established in May 2010
with the objective of exploring ways to increase
and diversify two-way trade between Zambia & the
U.S.
• The Working Group is charged with the
responsibility to identify & address the challenges
that hinder the flow of trade with a view to expand
and diversify exports as well as promote
investment between Zambia & the U.S.
Role of Civil Society
• Civil Societies represent a special group of
people. You posses one of the most powerful
voices if channelled in the right direction,
• Partner with Government to push the
countries trade & Development Agenda ( E.g
EPAs with the EU),
• There is need for Civil Society to participate
in the Civil Society segment of the AGOA
Forum.
Conclusion
• Zambia is participating in the AGOA
Forum, AWEP, Private Sector and Civil
Society Segments
• The onus is on the Civil Society to take the
lead in your advocacy work to ensure that
Zambia moves away from being producers
of raw materials.
THE END
THANK YOU
FOR YOUR
ATTENTION