Thursday, August 6, 2009



By Oduor Ong’wen

Trade ministers from 40 sub-Saharan Africa countries and the US are attending the Eighth Forum of the African Growth and Opportunity Act (Agoa) in Nairobi.

From evidence discussed in the opening plenary and workshops by the private sector and civil society, it is evident the Agoa benefits supposed to accrue to Africa were at best exaggerated or non-existent.

The Act has two predicates: The development of freer trade between Africa and the US; and increased US investment in Africa.

The jury is back with a verdict: African countries are yet to benefit from the market access opportunities provided by Agoa while US investment to Africa has increased. A report released last week by the Brookings Institution, a US think tank, confirms this.

The reasons many African countries can hardly benefit from Agoa need no guesswork. Apart from a handful of oil-producing countries whose exports to the US have increased, there has been a decline in non-oil exports to the US of 22 per cent.

It is not an accident the top seven Agoa beneficiaries are Angola, Chad, Equatorial Guinea, Gabon, Republic of Congo, Nigeria and South Africa - all oil-producing countries.

Critics rubbish the true market intention under Agoa because of this trend. In principle, all the 42 countries in sub-Saharan Africa are eligible to participate in the Generalised System of Preferences (GSP) programme that Agoa offers.

However, this participation is qualified and is applicable only for one year at a time. The biggest national sovereignty issue in Agoa is its unilateral nature.

Unlike the Cotonou Agreement between African, Caribbean and Pacific countries where negotiations take place albeit asymmetric power relations across the divide, Agoa, on its part, does not pretend to involve African countries into any negotiations.

It is a domestic US legislation that bundles together some 42 sovereign nations in sub-Saharan African and invites them to participate within a regime of conditionalities and christened eligibility criteria.

Central to Agoa is the concept of partnership between Africa and the US and how this could be developed, nurtured and enhanced. Yet, this provides the first substantive issue of contention about the Act.

It is a curious way of developing partnership where the enabling instrument has been developed in a one-sided fashion and on the basis of priorities and policy preferences of one party shielded from the view of the other, who supposed to be the principal beneficiary of the new partnership.

The adage that you cannot shave someone’s head in his absence aptly applies here.

Many African countries would like to take advantage of the duty-free market access initiative that Agoa provides. They are, however, hampered by a number of political, economic and technical obstacles.

Political Obstacles

All protestations to the contrary notwithstanding, there is cause for concern little has changed with regard to the US policy on Africa. Its economic and strategic interests come first, second and third.

The right of all countries to articulate their own development perspectives and approaches to economic management based on their history, experiences and goals is an illusion and delusion absent from the letter and spirit of Agoa.

The Act, on the contrary, spares no effort in accommodating the concerns of a cocktail of special interests and lobby groups while hardly making any attempt to address concerns raised by the African.

It is bad enough for the Act to fail to make serious efforts at reflecting African priorities, concerns and aspirations. But this apparent omission is worsened by overloading the legislation with tough conditionalities called "eligibility criteria."

The range and width of issues included in these criteria of eligibility cover essentially all spheres of Africa’s political economy.

It is hard to imagine any country in Africa or elsewhere can meet these criteria without totally surrendering its role of policy formulation and economic management to the dictates of the International Financial Institutions (IFIs), subscribing to industrialised countries’ agenda in the World Trade Organisation.