Gov�t launches strategy to maximise on AGOA
Pauline Dikuelo | Thursday August 24, 2017 18:00
The strategy would help local businesses grow by taking advantage of AGOA provision of duty-free exports to the United States of America (USA) with the hub’s experts working directly with the private sector to improve productivity and facilitate robust regional trade and global market access. The strategy would focus on the beef, textile, arts and craft, as well as jewellery sectors.
Speaking during the opening of the USAID Southern Africa Trade Hub office in Gaborone this week, permanent secretary in the Ministry of Investment, Trade and Industry (MITI), Peggy Serame said the scope of the AGOA National Response Strategy supports the country’s long-term vision, Vision 2036, as well as the National Development Plan (NDP) 11.
“Through the strengthened collaboration, Botswana envisions trade arrangement with the USA that would foster increased foreign investment for both goods and services during the implementation of the AGOA National response and beyond 2025,” she said.
The new hub will continue to work with MITI to break down barriers to trade in order to increase exports, achieve regional economic integration, increase uptake in utilisation of the AGOA by Botswana businesses.
According to Serame, the non-reciprocal preferential treatment offered by AGOA to export goods duty-free to the US market does not only provide Botswana with an opportunity to increase the export volumes and value, but also serves as a tool to take the country’s industrialisation efforts to another level through developing the value chains of the identified AGOA potential sectors.
In 2015, AGOA was extended by 10 years to September 2025, with the aim of ramping up investment and trade amongst AGOA beneficiary countries. The extension emphasises the need to boost trade and investment between sub-Saharan Africa and focuses on regional integration, economic development and diversifying sources of growth, eliminating barriers to trade and investment.
USAID deputy chief of party, Malvern Rusike said over the years the textiles and apparel sector has been Botswana’s main AGOA beneficiary sector constituting between 90 to 100% of total AGOA exports for the country.
At its peak in 2011, Botswana had over 10 textiles and apparel firms exporting under AGOA. Of these textiles and apparel firms that operated from Botswana, some have shifted focus from exporting to the US market towards South Africa while some have relocated mostly to Lesotho with others having closed down.
Botswana’s AGOA exports have not increased beyond 2012 levels dropping from a peak of $17.1 million in 2011 to $8.26 million in 2015. “While average AGOA exports from sub-Saharan Africa constitute 45 to 50% of total exports to the US, Botswana’s exports were less than four percent from 2013 to 2015,” he said.
Out of the 12 AGOA eligible SADC countries, Botswana was the eighth best exporter in 2015 with a total of $8.3 million and ninth the following year with a total of $4.8 million. In total, Botswana exported goods to the US worth $225 million in 2015 and $445 million in 2016.
Rough diamonds exports, which are Botswana’s main exports, are not included in the AGOA trade pact.