The Africa Growth and Opportunity Act : Analysis and Post - 2015 Scenarios

The improvement of the sub-Saharan Africa (SSA) trade capacity has fairly been achieved. However, development analysts opine that the maximum potential of the AGOA Act remains underutilized. To achieve the maximum efficiency of the Act, a mix of right policy interventions need to be implanted. The trade benefits under AGOA present opportunities that can elevate poverty levels and provide employment opportunities. Table 1 in this document provides a summary of the trade between Kenya and the United States. The US continues to export high valued goods such as aircrafts parts, machinery, while Kenya’s exports low value items such as nuts, flowers and coffee. Since 2005, trade balance between Kenya and US has continued to fluctuate in millions in a span of 10 years (Table 1.). Before AGOA was signed into law the balance in trade of goods (exports -imports) between Kenya and US was valued at $127.3 million. Less than a year to the 2015 AGOA expiry date, trade balance gap multiplied eight fold. Even though AGOA is a non-reciprocal trade programme, the US is equally benefiting from this programme. According to the US Department of Commerce, there are 250, 000 AGOA generated jobs in the US alone and close to 1 million indirect jobs in SSA. Reviewing the earlier trend when AGOA III was amended, there was a lot of anxiety among investors; this resulted in the decline of the value of exports particularly in 2004 to 2005.