AGOA presents opportunity to deepen Ghana, US trade
The 10-year extension of the African Growth and Opportunity Act (AGOA) is expected to provide a platform for Ghanaian businesses to increase their exports into the United States (US) market.
The move will subsequently help drive volumes of trade between the two countries, which is estimated at over US$1.45 billion as at 2014.
The US Assistant Secretary of Commerce, Mr Marcus Jadotte, in an interview in Accra on March 10, said there was a huge opportunity to increase Ghanaian exports into the US, but that largely depended on whether Ghanaian businesses were ready to capitalise on the opportunity.
There is more room to increase volumes of exports from the Ghanaian side into the U.S market. The 10-year extension of AGOA creates an environment for that, but it is really up to Ghanaian businesses and entrepreneurs to take advantage of the Act and begin to export to the US market,” he said.
The African Growth and Opportunity Act (AGOA) is a United States Trade Act that was enacted on 18 May, 2000 as Public Law 106 of the 200th Congress. AGOA has since been renewed to 2025.
It builds on existing US trade programmes by expanding the duty-free benefits previously available only under the country’s Generalised System of Preferences (GSP) programme.
The United States (US) is among Ghana's principal trading partners, playing host to a number of U.S. companies operating in the country. Notable are IBM, Coca-Cola, Newmont and US-based Kosmos Energy.
Support programme
Most businesses have failed to take advantage of the opportunities that AGOA presents largely due to the perceived stringent requirements that come with exporting to the US markets.
Mr Jadotte, however, explained that there was a support programme being run by the U.S. Agency for International Development (USAID) with the sole aim of increasing exports into the U.S market under AGOA.
“There is a support programme through which the USAID is focusing on increasing AGOA in Ghana. This will make things a little easier because there are slight requirements for exporting duty free into the US. Managing the process shouldn’t be a barrier to duty free exports into the US,” he said.
In 2015, the USAID opened an AGOA Trade Resource Centre in Accra, with the aim of increasing the value of exports from the region by guiding businesses to access regional and global markets for agricultural and value-added trade.
Doing business in Africa
The Doing Business in Africa campaign was launched in November 2012, with an objective of connecting American businesses with their African counterparts.
It seeks to support existing and new American investments in Africa, expand access for American businesses to finance their exports to Africa and reduce barriers to trade and investment in Africa.
Giving an update of the success of the campaign so far, Mr Jadotte said it had progressed well and the advisory council was subsequently working on taking the campaign to the next level.
AGOA Education
Despite the enormous benefits that trading under AGOA offers, most Ghanaians have failed to capitalise on it, something, stakeholders attributed to the low level of education about the concept.
Members of the American Chamber of Commerce (Ghana), therefore, urged the government to get involved and sensitise businesses on the benefits and the various processes thereof required to enter the US market as well as the benefits that come with it. — GB