Africa-Press – Eswatini. The Southern African Customs Union (SACU) has disclosed that an early and long term renewal of African Growth Opportunity Act (AGOA) was important and necessary to prevent any disruptions to trade.
This was disclosed by the Minister of Commerce, Industry and Trade Manqoba Khumalo during the 2022 AGOA Ministerial Engagement in Washington DC, USA, on Tuesday.
Khumalo explained that SACU members had jointly agreed that an early and long-term renewal of African Growth Opportunity Act (AGOA) was important and necessary to prevent any disruptions to trade.
He mentioned that the value of total SACU exports to the US declined from USD 9.5 billion in 2019 to USD 8.2 billion in 2020, while imports declined from USD 5.1 billion in 2019 to USD 4.8 billion in 2020.
“This could be attributed to the slowdown in economic activity as a result of the COVID-19 pandemic. However, SACU’s exports to the US have remained relatively stable over the years, accounting for around 7 per cent of total exports to the world,” the minister stated.
Khumalo further explained that SACU countries had been committed to ensuring and creating an enabling environment, including putting in place the necessary response strategies for private sector to maximise the AGOA benefits.
“According to our Trade Statistics, the US is SACU’s third trading partner, both in terms of imports and exports, after the European Union and China. SACU has been experiencing a trade surplus with the US since the inception of AGOA in 2000 and has recorded a positive trade balance with the US over the past eight years,” he stated.
According to the minister, a longer-term extension of AGOA beyond 2025 with less conditionality which guarantees certainty would ensure increased benefits for Sub-Saharan African countries.
He said in addition, expanded product coverage with flexible rules of origin to enable cumulation among sub-Saharan African countries will also benefit the private sector.
He explained that consequently, this would be predictable and ensure increased private sector investment which could enhance market access to the US market.
“On the implementation of the African Continental Free Trade Agreement (AfCFTA), allow me to highlight that the AfCFTA is a priority for SACU Member States,” the minister stated. He said they were engaged to fully implement and take advantage of the opportunities it presents.
He further mentioned that SACU had prioritised industrialisation, including the development of regional value chains, export promotion and investment promotion as an over-arching objective to deepen their regional economic integration agenda.
“We are, therefore, optimistic that the AfCFTA will provide opportunities for increased trade and investment relationship between the US and Africa,” he said.
He also expressed gratitude to the Government of the United States of America, particularly to Ambassador Katherine Tai.
“2025 is around the corner, there is, therefore, an urgency to concretise AGOA benefits to ensure that they are not lost and that the relations between the US and Africa are strengthened,” he said.
He mentioned that the Member States of SACU-Botswana, Eswatini, Lesotho, Namibia and South Africa-had benefitted tremendously from AGOA since its inception in May 2000. He also thanked the US government for hosting the AGOA Ministerial meeting.
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