Trade Africa Feed the Future Regional Conference APRIL 11-12 2016 MAKING BETTER USE OF AGOA Trade Africa Feed the Future Regional Conference APRIL 11-12 2016 Presentation by: Emmanuella hakizimana Senior export promotion officer, eac
Outline Past AGOA utilization by the EAC Region The unrealized potential Challenges EAC-AGOA Strategy 2015 – 2025 Going Forward
PAST AGOA UTILIZATION BY THE EAC REGION AGOA = Africa Growth and Opportunities Act It is an initiative of US Government which offers duty and quota free access to the US Market for over 7,000 products from SSA It is non-reciprocal aimed at spurring growth and development Started in 2000 and renewed several times. In September 2015, AGOA was re-authorized together with Third Party Provisions to Year 2025 All the EAC Partner States are AGOA eligible (Burundi has been suspended). EAC Partner States have exported good that are of low complexity and lack local value addition
Past utilization of AGOA by EAC Region Cont.. Total two-way trade between the EAC and U.S. has increased from U.S. $ 514 million in 2000 to U.S. $ 2,775 million in 2014.. Exports to U.S. from the EAC increased from U.S. $ 186 million to U.S. $ 743 million imports increased from U.S. $ 328 million to U.S. $ 2,007 million Balance of Trade has remained in favour of the US EAC Exports under the AGOA (including the GSP) peaked at U.S. $ 768 million in 2014 Overall the utilization of the AGOA by the EAC is far below the anticipated levels. Country % Contribution Kenya 96% Tanzania 3% Uganda 0.4% Rwanda 0.2% Burundi 0%
The unrealized potential Data shows that though all the EAC Partner States have been trading with the US, utilization of the AGOA Program has been very poor. A study by the Center for International Development, Harvard University has identified a combined potential of US $ 8 billion worth of exports to the US under AGOA There is a huge unexploited gap
CHALLENGES FACING EAC EXPORTS TO THE US High transportation costs to the U.S. market High transaction costs Stringent Sanitary and Phytosanitary (SPS) measures esp for agricultural products Low flows of US investments into the region Existence of tariff and TRQs on some agricultural products in which EAC Limited availability of affordable trade finance for the SMEs and rural farmers. Limited information to stakeholders about AGOA Under-utilization of networking mechanism between US and EAC business community in relation to AGOA opportunities Continued preference erosion of EAC products into the U.S market by well- established and globally competitive countries Lack of regional AGOA policy and implementation strategy
EAC-AGOA Strategy 2015 – 2025 Why an EAC-AGOA Strategy? EAC views AGOA as a special vehicle to reduce poverty and stimulate economic growth Utilization of AGOA by EAC Partner States over the last fifteen years has been lackluster at best. There is need to convert the AGOA potential into concrete advantage. All the Partner States have formulated (or are in the process of formulating) country AGOA strategies The EAC has completed the process of formulating an AGOA strategy to complement the country strategies Through this strategy EAC Partner States will take a proactive common approach in engaging the US on the AGOA Program The strategy will take advantage of the additional provisions contained in the AGOA Act 2015, including focus on regional integration, women and youth
Highlights of the EAC-AGOA Strategy VISION: “To become a region that is competitive and dynamic exporter to the US market and globally.” MISSION: “To position EAC as the leading competitive exporter of diversified and value added goods to the USA and globally” OVERALL GOAL: to maximize utilization of the AGOA Program for the benefit of the EAC economies, businesses and people
The Strategy Highlights Cont… PRIORITY SECTORS Agricultural products and foodstuffs, Leather and leather products, Textiles and apparel, Extractive natural resource products, and Home and fashion accessories PRIORITY AREAS OBJECTIVES To increase production and export of tradable products – 6 Strategies To diversify products exported to the USA from the region EAC – 7 Strategies To intensify value addition - 3-Strategies To promote and attract investment – 6 Strategies
GOING FORWARD Approval of the Strategy by EAC organs Setting up implementation mechanisms Engagement of stakeholders Roll out
SALUTATION Thank you very much, Merci, Asante Sana Happy to receive questions/comments