In mid-June, the Ghana Free Zones Board approved an application from an apparel manufacturer that is setting up its operation in Koforidua, a small city of almost 100,000 people. The USAID Trade Hub assisted the company in obtaining approval – which ultimately will create 900 jobs within five years.
U.S. Secretary of State Hillary Clinton at the AGOA Forum in Lusaka, Zambia.
“The approval allows us to move forward toward full operation,” said Maxwell Owusu of World Apparel Group. “The Trade Hub’s assistance has been important.”
At the 10th annual AGOA Forum in June, trade hubs across Africa – there are two others in East and Southern Africa – were highlighted for helping to make the law effective. And the U.S. Government announced the Africa Competitiveness and Trade Expansion initiative – US$120 million over four years – to fund their continued work.
“[T]he three regional trade hubs that USAID sponsors do much more than connect African and American businesses,” U.S. Secretary of State Hillary Clinton told public and private sector stakeholders from across the continent at the Forum, which was held in Lusaka, Zambia. “They support African entrepreneurs in writing business plans, raising capital, increasing their productivity, improving their production processes so they can meet the export standards set by governments and companies around the world.”
As it marked its 10th year – during which exports to the U.S. under the trade preferences it accords eligible countries have quadrupled – the main issue for the law is extending it, while ensuring that Africa and African countries continue to improve their competitiveness in world markets.
AGOA is set to expire in 2015 and a key provision for apparel manufacturers like World Apparel Group – an exemption on tariffs on products made with fabric from a third non-AGOA country – is set to expire next year. Ending the laws would spell catastrophe for the apparel manufacturers in Africa.
“Without AGOA, we would not be as competitive,” said Caroline Kendem, CEO of Ken Atlantic, an apparel company in Cameroon, which employs over 200 young women. “The third country fabric extension is as important. It would not make business sense to produce these goods without these provisions.”
Taking advantage of AGOA, apparel manufacturers are adding jobs - and transforming lives.
Smaller enterprises would suffer as well, managers said.
Clinton’s comments at the AGOA Forum reassured stakeholders.
“The Obama Administration will work with Congress on a seamless renewal of AGOA beyond 2015 – and on a renewal of the important third-country fabric provisions in the coming months so that we also have a consistent regimen,” Clinton said at the Forum.
But, she added, the success of AGOA requires a collaboration. The law itself is not going to solve Africa’s ability to compete in world markets. African countries need to develop strategies to make sector’s competitive, pursue deeper regional integration and reduce corruption to ensure their companies are competitive in world markets.
U.S. Ambassador Patricia Hawkins inaugurates the new ARC in Lome, Togo, with Togolese officials.
The USAID Trade Hub is working in each area - anchoring its work in market-driven assistance to hundreds of export-ready companies in nontraditional sectors across the region. In June, U.S. Ambassador Patricia Hawkins and Togo’s Minister of Commerce Artème Ahoumey Zunu and Minister of Industry Fofana Bakalawa inaugurated the newest
AGOA Resource Center in Togo.
"The 15 centers and the website put practical information in the hands of business managers," said Abou Fall, the USAID Trade Hub AGOA Services Manager. "That information is complemented by the Trade Hub's close work with public and private stakeholders on regional integration, lowering transport and telecommunications costs and improving access to finance."