TZ Wants Extension of AGOA by 20 Years, Retention of Middle-Income Countries

Tanzania is urging the United States to extend the Africa Growth Opportunity Act (AGOA), set to expire in two years.

The country is also advocating for Washington to retain middle-income status nations in the programme. This request coincides with Kenya’s imminent agreement with the Biden administration, securing the exclusive duty and quota-free access to American markets beyond 2025, making Kenya the sole African nation with this privilege.

Tanzania’s Trade Minister, Ashatu Kijaji, stressed the importance of extending the trade pact by a minimum of 20 years post-2025.

Such an extension, Kijaji argued, would provide the predictability necessary for AGOA and promote long-term investments across African countries.

Dr Kijaji expressed Tanzania’s gratitude to the US government for AGOA, emphasizing its critical role in benefiting Tanzania and other AGOA beneficiary nations.

Nevertheless, he noted that they have not fully harnessed the opportunities offered by AGOA, necessitating the 20-year extension.

AGOA tends to segregate countries that have achieved a middle-income status as the initiative is set to benefit nations that are considered to be Least Developed.

Meanwhile, Kenya is actively engaged in negotiations with the United States to secure a ten-year extension of the AGOA agreement.

This initiative aims to bolster Kenya’s textile industry and enhance its export capabilities, particularly in the textile and garment sector.

In 2022, Kenya’s textile and garment industry played a significant role in the nation’s exports, contributing a noteworthy seven percent to the country’s total export volume. This resulted in monthly textile product exports valued at an impressive Ksh4.5 billion.

Kenya’s optimism for the future largely hinges on the United States’ decision to extend AGOA, considering the current agreement’s impending expiration in 2025.

This extension represents a crucial opportunity to secure a stable and thriving export channel for Kenyan textile and garment products in the American market.

The call by Tanzania coincides with the recent removal of Uganda from the AGOA list by the United States. This action followed Uganda’s enactment of anti-gay laws, further highlighting the complexities surrounding AGOA’s eligibility criteria.

AGOA is a trade agreement that grants duty-free export privileges to beneficiary nations in sub-Saharan Africa when shipping their goods to the United States.

Initially, it was introduced in 2000 with an original duration planned from October 2000 to September 2008. However, AGOA’s longevity was extended to 2015 through legislative amendments signed into law by then-US President George W. Bush in July 2004.

gandae@businessdayafrica.org