African efforts for integration and development

Wednesday, 2019-08-07 17:20:21
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NDO - The African Growth and Opportunity Act (AGOA) Forum has recently concluded in Abidjan, Côte d’Ivoire. Co-hosted by the US and Côte d’Ivoire, the event brought together a number of senior government officials from the US and the 39 AGOA-eligible sub-Saharan African countries to discuss ways to boost economic cooperation and trade between the US and Africa.

The theme of this year’s Forum was “AGOA and the Future: Developing a New Trade Paradigm to Guide U.S.-Africa Trade and Investment.” This was considered an opportunity for Africa not only to highlight its potential, but also to confirm its new position as an independent partner with active integration as well as to reduce dependence on great powers.

Enacted 19 years ago, AGOA gives special treatment to 39 African countries by abandoning import levies on more than 7,000 wide-ranging products. This year’s forum took place in the context of many changes, when Africa is trying to escape from the old image of a continent waiting for aid from more affluent countries. In particular, the establishment of the African Continental Free Trade Agreement (AfCFTA) has helped the countries gradually realise their development goals. However, the countries participating in the AGOA are also facing many challenges, as US President D. Trump has previously made it clear he wants to protect US domestic business and manufacturing against threats from abroad. Meanwhile, the African policy of the US government has not been clearly defined and according to some analysts, Africa is currently not on the priority list of US foreign policy. There are also concerns that tariffs on the export products from major economies in Africa to the US may increase.

Although there is positivity in regards to many African economies have recently seen improvement, African countries still do not want to lose their preferential tariffs from the US. In the current context, many countries want to promote economic and trade cooperation in a more equal manner with the US. The 2019 AGOA forum also emphasised the important role of women, youth, social organisations and the private sector in promoting trade, expanding economic growth and creating prosperity in Africa. In order to dispel doubts from the US, South Africa's Minister of Trade and Industry E. Patel stressed that the establishment of AfCFTA and AGOA have helped Africa have a common voice and could boost its exports to the US, adding that the establishment of the AfCFTA and AGOA will enable the continent to speak with one voice and potentially boost exports to the US.

For many years, the US has joined the wave of investment in Africa, with the desire to continue to maintain its influence in this potential area. The US is Africa's largest donor, with most of the grants focusing on the fields of health, agriculture and clean water supply. In the last 20 years, the US has provided more than US$16 billion in aid to Africa. The U.S. government’s development finance agency, the Overseas Private Investment Corp (OPIC), has planned to double investment in Africa to US$12.4 billion to enhance the quality of projects in Africa, as well as disbursements on urgent projects in the continent that has a population of 1.2 billion people. OIPC has already injected US$100 million into Africell Holdings Ltd., one of the largest mobile telecommunications operators in the continent. Two US technology giants, Google and Facebook, are also building an undersea cable system that covers the entire continent.

In its new policy on Africa, Washington is committed to increasing trade and peacekeeping operations in the region, promoting economic relations with Africa to create more opportunities for the US businesses and protect the independence of African nations in parallel with the US national security interests. Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act) was signed into law on October 5, 2018. It is considered Washington's most important initiative for Africa under the administration of President D. Trump. Accordingly, OPIC will be transformed into the US International Development Finance Corporation (IDFC) with a budget that’s been doubled of US$60 billion.

Africa is entering a new era, especially after the establishment of the AfCFTA. The opening of markets and social reform are important steps for Africa. On its path of development, the continent is exerting efforts to expand and promote relations with the US. However, it will no longer be a “giving and receiving” relationship, but a “win-win” cooperation for a new Africa of integration and development.