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Published:June 8th, 2006 01:31 EST
Renaissance in US-Africa Trade Policies

Renaissance in US-Africa Trade Policies

By Juliet Maruru

AGOA provides duty-free access to a wide range of more than 6,400 items into the U.S. market for African nations willing to reform their economies along free-market lines. This trade legislation, a first with Africa, was passed by the U.S. Congress in 2000 and since has been updated and renewed. Under the AGOA Act, Kenya for example, has been able to export textiles and textile products to the U.S. markets and effectively reviving a dying Kenyan textile industry. President Bush’s policies are becoming increasingly different from previous policies on Africa. The Millennium Challenge Account, the President's Emergency Plan for Aids Relief (PEPFAR Initiative), the 100 percent debt relief initiative endorsed by the Group of Eight (G8) Summit in 2005 at Gleneagles, Scotland, and AGOA all point to a renaissance in policy making on the US government’s side.

At the same time Africa is experiencing an economic renaissance wide across the continent. Pittman, who is an economist, urged the audience to look at the annual statistics on Africa recently released by the International Monetary Fund and try to find any economic indicators that are down from 10 years ago. "Growth on the continent is running at 5 percent, non-oil growth is running at close to 5 percent, inflation is at the lowest point it's been in 20 to 30 years."

Pittman pointed out that the per capita growth in the 1990’s was non-existent, minimal at best. In the last three years, per capita growth has increased to 3%, a figure many would wish to be higher, but an encouraging figure nonetheless. Pittman pointed to the fact that a 3% growth in population is very significant and therefore a 3% increase in per capita growth was evidence of a significant rise in people’s incomes.

With regards to trade, Pittman said, "If you look at imports or exports on the continent, they are ... increasing as a percentage size of the economies. If you look at [1998-1999], imports represented about 30 percent of GDP [gross domestic product], exports also about 30 percent of GDP. Today those numbers are about 40 percent of GDP. So what you see is that these [African] economies are becoming more open to trade. They are trading more and the same is true on the investment front."

African people and their leaders are making dynamic changes, and this calls for a change in the policy-making strategies of countries like the U.S. Pittman said the United States is contributing "a much larger share of aid” on the African continent than four years ago. That means, he said, that in a relative sense, the United States is "scaling up far more than any other donor. That is just a fact.”

"Hopefully we have shown people -- and Africans on the ground have shown people -- that nothing is off the table," Pittman said. "As people asked for $1 billion in new assistance, last year we delivered $4.2 billion." Pittman continued to say that there is a need for people to think dynamically on ways to enhance the dialogue between the Public and Private sector in the US-Africa trade so that whatever obstacles remaining for US-Africa trade and investment can be overcome for the benefit of everyone involved.

"Hopefully we have shown people -- and Africans on the ground have shown people -- that nothing is off the table," Pittman said. "As people asked for $1 billion in new assistance, last year we delivered $4.2 billion." Pittman continued to say that there is a need for people to think dynamically on ways to enhance the dialogue between the Public and Private sector in the US-Africa trade so that whatever obstacles remaining for US-Africa trade and investment can be overcome for the benefit of everyone involved.

Source: U.S. Dept. of State