Business

in Abidjan, Susan Muhwezi Roots for Integrated Transport Network to Boost AGOA

Ms Susan Muhwezi, the presidential advisor on African Growth and Opportunity Act (AGOA), has called for a more integrated infrastructural network, increased investment in green energy and reduction in the cost of financing for Africa to reap from trade with United States.

“Transport infrastructure is essential for movement of raw materials to production areas and conveying finished products to markets or consumption areas.  Besides the roads, we must aim at interconnecting Africa within itself, Africa with America and Africa with the rest of the world using mainly the railway and air transport, as well as water transport,” said Ms Muhwezi.

The presidential advisor spoke this week during the 2019 African Growth and Opportunity Act (AGOA) Forum in Abidjan, Côte d’Ivoire.

Extended in 2015, AGOA is a legislative arrangement under the United States Trade Laws that enables selected African countries to export products to the U.S. Market.

It provides tariff-free access on 6,500 products to 39 countries, ranging from oil and agricultural goods to textiles, farm and handicrafts.

Ms Muhwezi said energy remained the biggest enabler of industrial development as well as advanced agricultural production.

“As a continent, we need to redouble our efforts on availing energy for production.  A focus on green energy technologies would be ideal for sustainable development,” she added.

Ms Muhwezi’s remarks came against the backdrop of concerns that Africa was yet to fully exploit the trade opportunities provided by AGOA.

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For example, trade quadrupled in value from 2002 to 2008, a year when it reached $100bn, but fell back in 2017 to $39bn, according to figures compiled by the US Agency for International Development (USAID).

The media reported that the surplus is widely in Africa’s favour, but most exports to the US are in oil or petroleum-based products, not the industrialised goods that provide a value-added boost to local economies.

Addressing the gathering, Ms Muhwezi cited some of the challenges underpinning the trade such as the cost of financing which “remains very high in most African countries and this inhibits private sector participation in the development initiatives on the continent.”

Ms Muhwezi said investors would find it easier to penetrate and operate in Africa if they were able to find ready and capable business partners.

“With many African companies falling short largely due to financing constraints orchestrated by the high cost of financing, this remains far from the reality,” she added.

The presidential advisor also called for human capital development to boost production.

The US, under the African Growth and Opportunity Act (AGOA), is promoting export-led economic growth for Uganda through preferential export benefits for our eligible goods.

Ms Muhwezi said the duty-free access of Ugandan goods to the largest single market in the world also availed the East African country significant competitive advantage over non-AGOA countries that must pay normal tariff rates to enter the US market.

“This arrangement has boosted our bilateral trade. We are entitled to zero tariff access and quota free access under AGOA arrangement for 6,500 products,” she observed.

ChimpReports understands that in 2017, AGOA enabled Uganda’s private sector to earn US$ 82million and US$ 53 million in 2008 in exports to America.

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