SPEDU firms urged to take advantage of AGOA

Chakalisa Dube | Monday November 7, 2022 06:00

Targetted: The textile industry was traditionally the main exporter to AGOA, but the revised strategy now includes other sectors such as leather as well as curios PIC: MORERI SEJAKGOMO

Manake made the call in Selebi-Phikwe last week when officiating at an expo organised by SPEDU.

AGOA is a trade arrangement between the United States and sub-Saharan African countries, including Botswana, which runs till 2025 and provides relaxed access to the American market for various products.

Botswana enjoyed market access for over 600 products through the AGOA initiative to the United States market. Some of the products featured in the AGOA initiative such as textiles are produced in the SPEDU region.

“We have unexploited lucrative market opportunities in the United States of America under AGOA, particularly in textiles, processed foods and manufacturing. We have to change our mindset and seize such opportunities,” Manake said.

She added: “We cannot be a nation subdued by other nations. We can no longer be a dissolute town of despair while there are these great policies and initiatives.” Local companies have often been unable to capitalise on the benefits brought by AGOA, due largely to capacity, funding and technical constraints. However, there is hope that the initiative will soon yield results after government redoubled its efforts to ensure that local companies participate in the trade deal.

From zero AGOA exports in 2019, government, the United States’ local embassy, and business lobby organisations have refined the list of sectors to be focused on for AGOA and the type of support companies can be given.

Manake explained that trade agreements such as AGOA also offer great opportunities for Small, Medium, and Micro Enterprises (SMME) in the SPEDU region to thrive.

“My team at the ministry is negotiating more inclusive agreements that will improve the welfare of our entrepreneurship,” she said.

Manake also emphasised that manufacturers and producers in the SPEDU area should ensure that their products conform to standards set by competent authorities such as the Botswana Bureau of Standards and the Botswana Medicines Regulatory Authority. This, she said, will enable the products and services to be easily exported.

The SPEDU region is perceived to be strategically located making it easy for the transportation of goods and services transiting through Botswana to neighbouring countries such as South Africa, Zimbabwe, Zambia, and Namibia. Government has lined up several policies meant to fast-track plans to turn SPEDU into a manufacturing hub in the country. A few years ago, government approved special incentives amongst them tax relief and a 30% guaranteed government off-take to be enjoyed by companies doing business in the SPEDU region.

To date, 35 companies have been approved for tax relief incentives and thirty-seven 37 for government off-take incentives. The incentives have also helped some companies to start the development of their establishments and others have been able to penetrate the local and regional markets.