WASHINGTON, D.C., – Over 100 stakeholders came together on Tuesday, October 05, 2011, to demonstrate bi-partisan and broad support for enhancing and extending the African Growth and Opportunity Act (AGOA). The main focus of the event was on AGOA’s 3rd Country Fabric provision, which is driving Africa’s apparel exports to the US.

Hosted by the AGOA Action Coalition, the “AGOA Leadership Summit: Partnering for Competitiveness and Growth” included leadership from the African Union, African Ministers of Trade and Industry, and African Ambassadors Corps, US Congressional representatives, Obama Administration officials and retail leaders. The Summit provided a platform for stakeholders to discuss the apparel sector’s potential to serve as a springboard for industrialization and competitiveness across Africa. In addition to reaffirming the participants’ commitment to AGOA’s 3rd Country Fabric provision, the event also served as an opportunity for African policy leaders to discuss their apparel development strategies with US retail leaders, policymakers, and other stakeholders promoting expanded trade with Africa.

As a result of AGOA, African exports to the US have more than tripled in value to $61.5 billion, while total trade between the US and Africa increased 37% between 2009 and 2010, faster than the 22% at which the US trade grew with the rest of the world. The key moving forward will be for AGOA’s stakeholders to draw on the AGOA Action Coalition’s experience in identifying meaningful legislative vehicles, resonant messages for AGOA’s advocacy, and its unique ability to transform allies into lasting champions.

“Step-by-step, provision-by-provision, we’re going to strengthen and enhance AGOA, working with the US Congress, industry, African stakeholders and with the Obama Administration,” AGOA Action Coalition co-chair and moderator, Rosa Whitaker, told the audience. She described the event as “just the beginning” in terms of advocacy for this round of AGOA’s renewal, with a formal kick-off event being planned in the future, covering other components of AGOA.

Presenters emphasized the shifting global economic landscape and the rise in commodity prices as factors that favor Africa’s overall competitiveness in textile production. Deputy Chairman of the African Union Erastus Mwencha, a long-time AGOA champion, noted that cotton prices in particular will help Africa become a more attractive target for US importers.

Assistant US Trade Representative (AUSTR) for Textiles Gail Strickler was joined by Assistant US Trade Representative for Africa Florizelle Liser in reaffirming the Administration’s commitment to AGOA. AUSTR Strickler, who is responsible for overseeing negotiations affecting textile and apparel products, noted that the co-location of resources like cotton and oil favor fabric production and suggested there was room for regional specialization and integration in Africa’s long-term apparel development strategies.

Representatives of the US retail sector also participated in the discussion. Julia Hughes, Executive Director of the US Association of Importers of Textiles and Apparel, reiterated the industry’s commitment to ensuring that the 3rd Country Fabric remains intact. Nate Herman, Vice President of the American Apparel and Footwear Association, pointed out that, under AGOA, product differentiation and value chain expansion is already taking place, pointing to an emergent footwear sector in Ethiopia, where low costs and access to local resources and knowledge have created dramatic growth.

Paul Ryberg, representing the African Cotton and Textile Industries Federation, noted that Africa’s apparel industry is “just turning the corner and starting to recover” after a protracted downturn, but that businesses currently sourcing require the certainty that only immediate extension can provide. “Now is not the time to pull the rug out from under Africa’s apparel industry,” he admonished. “Now is the time to renew the 3rd Country Fabric Provision.”

The AGOA Action Coalition leadership urged the audience to come together on a “Heart-to-Hill” initiative that will speak to both the moral and economic imperatives of supporting AGOA. Not only has AGOA had a demonstrable, lasting impact on African individuals and entrepreneurs, but it has also opened the door to a focused and successful Africa, according to Ghana’s Minister of Trade & Industry Hannah Tetteh, who underscored the need to build long-term partnerships with American business. Ensuring that AGOA remains strong will be of paramount importance: “Given the amount of work and effort that has gone into making AGOA’s success stories happen, it would be a shame to have it all come crashing down.”

For more information on the event or upcoming AGOA Action Coalition events, please contact Mr. Nathaniel Adams at 202.293.1453 or by email at nathaniel@thewhitakergroup.us.

The International Monetary Fund (IMF) expects Sub- Saharan Africa’s GDP to grow by 5.5% in 2011 and 5.8% in 2012.
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UNCTAD expects the dollar value of remittances into Africa to grow by 4.5 and 6.7% in 2011 and 2012, respectively, which would further support the strengthening of household consumption.
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Ghana’s total maritime trade increased 16% in 2010 from 2009. Total imports increased 19%.
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Angola’s budget revenue was 939.6 billion kwanza ($10 billion) in the first quarter, of which 71% from generated from oil.
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Manufactured goods currently constitute only 14% of Africa’s exports.
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In 2010, the US exported goods and services worth $17.1 billion to Africa, while its imports from the region were $64.3 billion.
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Ex-Im expects Africa-linked distributions to US exporters to increase to between $1 billion and $1.5 billion in 2011.
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Capital flows to Sub-Saharan Africa rose from US$35.8 billion in 2009 to an estimated US$41.1 billion in 2010 – and are expected to reach US$48.5 billion this year.
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Out of the US$660 million Indian investments in Ethiopia, almost 65% is involved agriculture-based.
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Afren estimates that only 480 wells have been drilled in East Africa, compared with 14,500 in the west of the continent and 19,000 wells in Central and North Africa.
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From the Africa Progress Panel’s 2011 Progress Report

• By 2032 Africa will have a larger working population than China and larger than India by 2036.
• From 2011-2015, 7 of the 10 fastest growing economies will be in Africa.
• McKinsey estimates that the commodity boom is responsible for 36% of Africa’s economic growth.
• The poverty rate in Africa is only declining by 1% a year.

“The World Bank’s Africa Strategy is focused on key obstacles that have been inhibiting trade.”

“With the Bank’s focus on human productivity, that is investments in people and also training and the transfer of knowledge, you will have an Africa that is producing at the scale that world and the region is demanding.”

Click link to watch the full video: Africa’s Future and the World Bank’s Support to it

Statistics presented by Boeing last February at the first-ever Air Cargo Africa conference provide further evidence of Africa’s growing integration into global markets. The aircraft company reported that Africa’s air freight industry is growing at a robust average annual rate of 20%, indicative of the increasing demand for consumer goods by the continent’s burgeoning middle class (by 2020, the number of middle class Africans will almost double, with combined consumer spending of USD $1.4 trillion), as well as a commitment on the part of Africa’s growing economies to become more globally competitive.

 While developing an air transport industry is important to the continent as a whole, it is perhaps most critical for Africa’s 15 landlocked nations (South Sudan will join these ranks once it declares independence next month). Being landlocked can stunt economic development and isolate a country from international markets. Such countries are usually heavily dependent on their neighbors for trade facilitation- in 2009, Ethiopia relied on Djibouti’s port for 90% of its export and imports. As Paul Collier stated, “If you are landlocked, you serve your neighbors; if you are coastal you serve the world.” High transportation costs also inhibit external trade by accounting for significantly more – in some cases as much as 77% – of the value of exports, thereby diminishing trade competitiveness. Agriculture- which accounts for an average of 30% of GDP for Africa’s landlocked nations and 60% of employment in the region as a whole- is particularly affected by inefficient transportation as the products can easily spoil. Several countries are taking steps to overcome these geopolitical trade barriers, in part by prioritizing the development of their aviation sectors: building airports and air cargo storage facilities, upgrading their planes and increasing routes to facilitate the flow of people and goods to and from their countries.

The Landlocked Market

Not only is developing air freight capacity relevant to the landlocked nations themselves, but it should also be of interest to those companies looking to access untapped consumer-goods markets. Sub-Saharan Africa’s landlocked countries are home to almost one-quarter of the region’s population (243 million people). According to the World Bank, 10/15 of these countries are projected to achieve at least 5% economic growth in 2011 and 9/15 are ranked in the top 20 population growth rates in the world. These countries present tremendous potential that can be effectively ‘unlocked’ and accessed through improved air transportation.