AGOA: Strategies & the Business Case for Renewal

On February 9, CCA hosted a hybrid meeting bringing together 23 African Ambassadors and senior representatives with U.S. and African companies with an interest in the renewal of the African Growth and Opportunity Act (AGOA). The African Ambassadors present noted the unified position of the African Union and its members that AGOA should be renewed before the expiration of its current authorization in 2025. They noted that their Presidents had conveyed this message to U.S. officials during the December African Leaders Summit in Washington.Participants noted that AGOA renewal is very much in the commercial interest of companies from both Africa and the U.S. AGOA’s renewal will support African efforts to industrialize their economies and integrate economically under the African Continental Free Trade Area (AfCFTA), which in turn will support long-term growth on the Continent. Several American and African firms noted that AGOA provisions convey significant economic benefits, creating tens of thousands of jobs in the United States, ranging from factories to delivery and transportation and retail. AGOA provisions also directly support tens of thousands of jobs in a range of industries in Africa, including textiles and apparel, agriculture and manufacturing.The discussion stressed the importance of renewing AGOA as early as possible, ideally this year, to minimize disruptions to commercial agreements and orders, many of which are placed 18-24 months in advance. Companies also noted that renewal for ten years would enable them to better plan their investments, including expanding operations in Africa which would support economic growth and export markets for the U.S. in Africa, while also creating new jobs and economic growth in Africa.Several companies also noted that it is important to seize this moment, as factories are looking to shift production out of China as its workforce grows more expensive and companies look to reduce the risk of future supply disruptions. Africa has an opportunity to attract some of this production; to the extent that the U.S. can use an incentive program proven to be effective to promote market friendly investment and job creation in Africa, this is a powerful method of countering Chinese efforts to promote their brand in Africa. Participants agreed to coordinate efforts over the coming months.