From the Brookings Institution

Joshua Meltzer | February 23, 2015 10:46am

The importance of growing Africa’s agriculture exports

The African Growth and Opportunity Act (AGOA), signed into law in 2000, is the key underpinning to U.S.-Africa trade and investment. AGOA has been extended and reauthorized on four occasions (2004, 2006, 2007, and 2012) with strong bipartisan support and is set to expire in September 30, 2015. Congress should reauthorize AGOA for another 15 years, from 2015-2030. This will create necessary certainty and stability to further grow U.S. trade with sub-Saharan Africa.

There is much room for growth, particularly in the agriculture sector, where exports remain low at less than 3 percent of total exports under AGOA. So, AGOA should be reformed to support growth in agricultural exports. In fact, while under AGOA by 2014 agriculture exports to the U.S. increased by over 400 percent to $261 million, they still remain small in absolute terms.

Expanding opportunities for sub-Saharan African agriculture exports to the U.S. will produce a range of benefits:

• It will help drive growth and employment in the agriculture sector in sub-Saharan Africa, which is responsible for 30 percent of GDP and 70 percent of employment. This growth will also create employment opportunities for woman, as they comprise about 50 percent of the agriculture labor force in the region.
• The labor intensity of agriculture in sub-Saharan Africa means that policies to promote growth in the agriculture sector will be most effective at reducing poverty.
• Growth in the agriculture sector will help address growing youth unemployment in sub-Saharan Africa.[1] This is particularly important given sub-Saharan Africa’s so-called youth bulge, in which increasing numbers of young people are entering the job market this decade.
• It will diversify U.S. trade with sub-Saharan Africa, which is currently dominated by oil and gas exports.

The following policy brief outlines the opportunities for growing agriculture exports under AGOA and provides a series of recommendations for achieving this goal.

The African Growth and Opportunity Act so far

AGOA provides exports from sub-Saharan Africa preferential access to the U.S. market. The U.S. also provided preferential access for sub-Saharan Africa exports under its Generalized System of Preferences (GSP), a program that applies to exports from most developing countries. The GSP expired in 2013, but under AGOA GSP preferences remain available for AGOA-eligible countries. AGOA, combined with the GSP, provides duty-free access to the U.S. for 6,400 product lines from 38 countries in sub-Saharan Africa. Of total U.S. imports from AGOA countries, around 70 percent enter under AGOA.

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