AGOA duty free trade treaty likely to help African textile exports touch $4bn

The African Growth and Opportunities Act (Agoa), the new US duty free trade treaty which is likely to get extension for another 10 years in which about 40 African countries are eligible to take part to help the African textile and apparel exports to the United States grow by quadruple times, reaching $4 billion over the next decade, said a US official yesterday.

The AGOA is presently before American lawmakers, provides eligible sub-Saharan countries duty-free access to the world’s top apparel market, giving Africa a competitive edge over suppliers such as Bangladesh and Vietnam. The US administration has already called for Congress to renew the programme well ahead of its expiry date of September 30, 2015. The programme could be extended another 10 years. Ten years is a game-changer, said Gail Strickler, assistant US trade representative for textiles and apparel, adding the extension could be passed “imminently”. Lack of skills

Africa textile and apparel sector will not only be able to quadruple its exports, literally without a lot of trouble but create another 500,000 new jobs. Agoa was established in 2000; it has already been renewed past its original 2008 expiry date. Last year, US clothing imports from sub-Saharan countries reached $986 million, up nearly six percent from 2013, as countries such as Lesotho, Kenya, Ethiopia and Tanzania participated in the programme.

According to analysts, Africa had lower labour costs and abundant raw materials, such as top-quality cotton from Uganda, but congested ports, a poor road network, lack of skills and old technology were a hindrance.

Joseph Nyagari, an official at the Nairobi-based African Cotton and Textile Industries Federation said that although the costs may be rising in Asia, they are still way more competitive than Africa, especially on productivity, quality and product range.

African officials and Asian firms with factories in Africa welcomed AGOA’s extension, saying investment would follow. Taiwanese firm New Wide Garment, which has six factories in Kenya and one each in Lesotho and Ethiopia, also aims to expand.

Vice president of Herman Boodia, Africa said that with a ten-year extension most of the investors will try to move into Africa.