President Obama signed into law a bill reauthorising the African Growth and Opportunity Act (Agoa) for another 10 years. Since 2001, the non-reciprocal trade programme has allowed more than 6,400 items from around 40 sub-Saharan African countries to be imported into the US without duties or quotas.
The African textile and apparel sector, one of the main beneficiaries of the scheme, had urged the US government to proceed with the extension of AGOA well ahead of its expiration in September. Industry bodies warned that a delay would have caused significant disruption to the export cycle and endangered tens of thousands of jobs in Africa.
US imports of apparel manufacturing products from Agoa countries dropped by 5.6 percent to $225m in the first quarter of 2015, according to the latest available statistics from the US Department of Commerce. More decline is expected for third quarter of the year, according to Paul Ryberg, president of the African Coalition for Trade, a US organisation which represents African companies mostly in the textile and apparel sector and that has lobbied for the extension of Agoa.
Nonetheless, manufacturers are pleased with the 10-year renewal, which is the longest extension in the history of the programme. The so-called third-country fabric provision – which allows some Agoa-eligible countries to use materials originating elsewhere in their products – has also been extended until 2025.
“We are super excited about this decision,” Jas Bedi, chairman of the African Cotton and Textile Industries Federation, told This is Africa.
The move has paved the way for the expansion of the sector, Mr Bedi says. “In the past, Agoa and the third-country fabric provision were extended for three to five years each time. We couldn’t plan huge investments then, but now we can.”
Mr Bedi notes that Kenya, the largest apparel exporter under Agoa, has a set a target of growing exports from around $385m in 2014 to $1bn in the next three years, and of increasing jobs in the sector from 40,000 to 100,000.
“[Agoa’s renewal] is great news for Africa and great news for our industry,” says Mr Bedi.