A Smarter AGOA, A Better-Off Africa
"How much good luck has your name brought to Nigeria?" This question from 10 year old prodigy Zuriel Oduwole during the African Union's 50th anniversary brought President Goodluck Jonathan of Nigeria to laughter, being a direct allusion to his name. He nevertheless proceeded to answer.
The same allusion could be asked of the U.S. African Growth and Opportunities Act (AGOA). "How many opportunities has AGOA brought to Africa?" AGOA exports from Africa to the U.S. have increased over 500 percent to $53.8 billion between 2000 and 2011. Some experts estimate that 300,000 jobs in Africa and another 1.5 million indirect jobs have been created because of AGOA. Nonetheless, AGOA has barely scratched the surface of what is achievable. A closer look at the numbers reveals that 86% of that volume represented the export of petroleum products in 2012.
The challenges and pitfalls of AGOA are well-known. The supply capacity of African countries has been limited from the beginning by inadequate infrastructure, unreliable power and lack of financing. African entrepreneurs, initially enamored by the opportunities AGOA could provide, found themselves disappointed by limited product coverage, rigid localization requirements, cumbersome product approval processes, and the short expiration notice of the agreement itself. At the macro level, half-hearted integration policies perpetuated barriers to regional trade while poor, ad-hoc implementation of the agreement from African governments has made AGOA pale as an opportunity for growth. Despite all of this, it is encouraging to see that relevant recommendations have been explicitly formulated and initiatives such as Power Africa are on the verge of addressing these shortcomings.
So how do we further enhance AGOA? One way is by engaging the private sector and amplifying its efforts. I would like to offer two potential strategies, which ought to go hand in hand.
Building public-private sector alliances
The success of the African Cashew Alliance (cofounded by AGOA/USAID West Africa Trade Hub) in enhancing the competitiveness of the African cashew industry should be emulated. Leveraging platforms such as the Global Development Alliances (GDA) and the U.S. Department Global Partnership Initiative could allow African companies or their counterparts to develop similar projects, and co-invest while engaging public resources in a productive way.
Additionally, an AGOA-themed special window for the GDA could prove to be an interesting catalyst. Special attention by all of these efforts should be given to light manufacturing industries (leather goods, agricultural processing…) and their huge positive potential for Africa.
Offering visibility and support to disruptive companies
To see only the "business-as-usual," decades-old African companies at any AGOA-sponsored trade fairs in the United States would be highly surprising. The amount of innovation happening in Africa is staggering and companies that are more disruptive to standing business paradigms deserve to be highlighted as success stories via trade fairs, side events at the AGOA forum, and partnership or immersion trips to the U.S.
Shop Soko¸ for example, is an e-commerce platform that allows Kenyan artisans to upload pictures of their traditional crafts via a mobile phone and sell to American buyers who can select, buy and pay online. Shop Soko works with hundreds of mostly women artisans' living at the bottom of the pyramid, offering them a real path out of poverty through a direct access to the high-paying markets. This is a prime example of the power of technology reinventing cross-border trade. Mowoza and Makola.com are other companies following their own innovative trajectories.
Going Far, and Going Together
In Africa there is a saying, 'If you want to go fast, go alone. If you want to go far, go together.' Without a doubt, a smarter AGOA should continue playing an integral role in nurturing an ongoing and healthy relationship between a United States eager to champion prosperity worldwide and an Africa on the rise.
Richard Seshie is the founder of Vivuus, a company providing logistic solutions reaching the bottom-of-the-pyramid markets in Ghana. He is the Orange African Social Entrepreneur of the Year 2012.
Photo attributions to 10b Travelling on Flickr Creative Commons.
The Africa Program works to address the most critical issues facing Africa and U.S.-Africa relations, build mutually beneficial U.S.-Africa relations, and enhance knowledge and understanding about Africa in the United States. The Program achieves its mission through in-depth research and analyses, public discussion, working groups, and briefings that bring together policymakers, practitioners, and subject matter experts to analyze and offer practical options for tackling key challenges in Africa and in U.S.-Africa relations. Read more