Nigeria is yet to take full advantage of African Growth And Opportunity Act since it was enacted in May 18, 2000. Issues of political instability, inadequate infrastructure and poor macroeconomic management retarded the rate at which the country access the African Growth And Opportunity Act benefits. The failure to diversify the country’s economy away from its over dependence on the capital intensive oil sector, which provides 95% of foreign exchange earnings and about 80% of its budgetary revenues, has greatly affected the agricultural sector.
Despite this lopsided
development, Agricultural exports could still play an important role in
Nigeria-US trade if properly harnessed and if efforts are made to diversify
into higher value agricultural products. The US suppliers on the other hand
could increase their scope by providing inputs like fertilizer and light
machinery to Nigerian farmers. Presently, Nigeria-US trade is dominated by
energy and energy related products (oil and gas) while other sectors
contribution remained insignificant. However, agricultural products exports to
the US continued to increase over the years. Exports of agricultural products
to US in 2012 were valued at $80.83 million an increase of about
20% when compared with$58.78 million recorded in 2010. Other products that
featured in Nigeria’s bilateral trade with US include forest products,
chemicals and related products, textiles and apparel, minerals and metals
machinery, transportation equipment, electronic products etc. (See Table on
Bilateral Trade by Sector: US-Nigeria). The bilateral trade profile offers
immense opportunities for both countries to intensify dialogue towards
increasing their trade relations. The U.S. have realized that the balance of
trade is not in their favor (as a result of high importation of Crude Oil from
Nigeria) and is therefore moving towards jacking up her investment in the
Information Communication Technology, telecommunications and other
economic activities. Nigeria on the other hand is
envisaging sharp reduction in US purchase of its oil and is working assiduously
to diversify into other areas. The U.S. Foreign Direct Investment flow into Nigeria has increased from
$5.2 million in 2000 to $8 billion in 2012. US is moving towards the
diversification of its investments in Nigeria from oil and gas sector to other
key non-oil sectors such as Power,
Energy, Agriculture, Hospitality, Housing and Health Care among others.
Energy African Growth
And Opportunity Act
Imports Into
US And The Role Of These Imports In Poverty Alleviation And Economic
Development.
In 2011, 11 years after African
Growth And Opportunity Act
was enacted, the number of countries exporting
non-petroleum products to US had expanded to 22, more than half of those
eligible. South Africa has remained a major exporter. Mauritius, Lesotho,
Swaziland and Kenya exported the largest percentage of apparel and textiles to
the U.S. Nigeria, whose main non-oil
export products are agricultural failed to record any significant export to the
US. Generally speaking, Agriculture has not played a central role in the
accomplishments of African Growth And Opportunity Act. Agriculture provides 70
per cent of employment in Sub-Saharan Africa and 30 per cent of the regions
gross domestic product. Agricultural products on the other hand, are less than
1 per cent of African Growth And Opportunity Act exports. Apart from the fact that, the U.S. is not the
most suitable destination for some agricultural goods from Africa (such as cut
flowers) especially when compared with the European Union’s closer proximity,
most African agricultural products lack sufficient value addition and some of
them have been excluded from African Growth And Opportunity Act. Sanitary and phyto-sanitary
standards, though important for maintaining food quality and protecting human,
plant and animal health, has imposed additional
demands for Nigerian exporters as well as their counterparts in Sub-Saharan
Africa. This is seen as a major limitation to export of agricultural products
to US under African Growth And
Opportunity Act. Other achievements of African Growth And Opportunity Act
include job creation, increase in foreign direct investments, and efforts
towards regional integration through the creation of regional value chains and
corresponding increases in intra-African partnerships. Unfortunately, most of
these chains have been concentrated in the apparel sector where Nigeria, for
now, is not a principal player.
Government’s Promotional Strategy for African Growth And Opportunity Act
1. Establishment of National
Supplementation and Advisory
Committee; Developed export plan
for the Nigerian economy.
Worked with US based Consultant,
Manchester Trade Limited
to evolve a comprehensive
strategic export plan in Nigeria for
the purpose of benefiting from
African Growth And Opportunity Act;
2. Conducted Market Surveys to develop product profiles from
African Growth And Opportunity
Act. ;
3. Sensitization
Workshops/Seminars to create awareness of African Growth And Opportunity Act.
opportunities;
4. Capacity Building workshop in
collaboration with the USTR in
Nigeria;
5. Establishment of TIFA Council
as well as Nigeria-US Joint
Economic Partnership Committee
(JEPU) Created a direct air link and seaport connection for Nigeria to freight
goods to and from Miami, the gateway to the Americas.
6. Trade missions to several
countries to promote active private sector participation.
7. Product adaptations Programme
for several agricultural products such as Shea butter, frozen shrimps,
footwear, garments, dried fish, cashew nuts, etc.
8. Additional Measures to improve
the standards and quality of
made-in-Nigeria products through
the efforts of NAFDAC, SON
assessment and 1509000 management
system has improved
made-in Nigeria products quality
for the export market.
9. Production of an export manual
by the NCS to ensure compliance and increase African Growth And Opportunity Act
benefits.
10. Collaboration with WTO to
introduce standards and Trade
Development Facility (STDF) for
some selected products such as
Shea Butter and Sesame.
11. The design of a new Trade
Policy as part of efforts to clearly map out strategies to address various
trade impediments in the
country. The review will enable
Nigeria to realize its objectives of
growing the economy and
attracting substantial local and foreign
investment as well as increasing
its share of the African Growth And Opportunity Act trade as well as global
trade.
12. The design of a new
industrial master plan for Nigeria to increase the sector’s contribution to
GDP. The policy will
REVIEW OF THE 11TH AFRICAN GROWTH AND
OPPORTUNITY ACT
FORUM HELD
IN WASHINGTON, DC – 2012
The 2012 African Growth And Opportunity
Act Forum focused on how to overcome barriers to both US trade with Sub-Saharan
Africa and intraregional trade within Africa. The Forum identified that a very
key component to facilitating trade and to improving Africa’s trade
competitiveness in the global economy, is developing and improving
infrastructure. This could be centered on building sustainable supply chain
infrastructure or through improving access to market for women. The importance
of infrastructure to Africa was further emphasized by the
US Secretary of State when he
stated that “for Africa to realize its full potential, it will need to focus on
developing its physical infrastructure, such as roads, ports and modern
electrical grids.
Financing power projects in
Africa the Forum will play a particularly significant role, as power is key to
enabling the construction of a new and better infrastructure across the
continent. Presently, fewer than 25% of households in Africa have access to
electricity. Improving the situation of energy in Africa will have the
potential to ignite economic growth by creating all sorts of opportunities for
small businesses, for
Equally critical to investing in
physical infrastructure across the continent of Africa will be improvements in
regulatory infrastructure that make it easier to do things like registration of
new businesses or obtaining a construction permit.
Other areas considered as key to
stimulating rapid economic growth in Africa include:
•Creating a regulatory
environment to attract renewable energy,
investment and improving
regulatory measures to encourage
investment in broadband
infrastructure;
•Concentrated effort to support
the youth in terms of employment,
empowerment and skill
acquisition;
•Support for women entrepreneurs
to gain from the expected multiplier effects to the rest of the economy;
•Improving health infrastructure
to support citizens and enhancing
infrastructure to promote women’s
economic success. The 2012 African Growth And Opportunity Act Forum concluded
deliberations with a call for US Government and African Countries to continue
to advance their shared commitment and common goal using trade as an engine for
economic growth on both
sides, and to explore ways towards maximizing the potentials of the countries,
businesses and people.
INSTITUTIONAL
REFORMS
1. Development Of Infrastructure:
The Nigerian Sovereign Investment
Authority and the International Finance Cooperation – a member of the
World Bank Group have signed an Memorandum of Understanding for a strong
partnership that will help mobilize public and private resources for
investments in sectors such as housing, healthcare, transport, power and gas.
The partnership will bring
development to the broader
infrastructure sector and foster sustainable economic growth for Nigeria.
2. National Integrated
Infrastructure Master Plan
For Nigeria to address its
inadequacies in infrastructure and to integrate all infrastructure plans and
projects of the Federal Government into one, a National Infrastructure Master
Plan was formulated. The plan is a 30- year plan (2014-2043) which will
require an estimated $2.9trillion to close
Nigeria’s huge infrastructure gap
in the next 30 years, 52 per cent to be generated by Government while the
balance of 48 percent is expected to be covered by the Private Sector. The master plan will also put in place enablers that will attract
private sector investments to the infrastructure sector.
INFRA-REGIONAL COOPERATION
The Urban Development Bank of
Nigeria has recently signed a cooperation agreement with the Development
Bank of
South Africa to promote
business, technology and knowledge exchange between two regional economic blocs
by enhancing the capacities of both public and private sector
to deliver infrastructure. The
development of infrastructure is considered as the catalyst needed for
sustained economic development.
HUMAN CAPITAL DEVELOPMENT
Nigeria will continue to focus on
formulating policies aimed at reducing poverty and unemployment through
concrete measures, policies and the involvement of all stakeholders. The Country
will pay particular attention to strategic approaches to employment generation
using both sector specific and macro-based strategies.
BANKING
AND FINANCE
The Central Bank of Nigeria
is to establish the Nigerian International Financial Centre in an attempt
at making the
country Africa’s financial hub and a powerhouse in the global financial system. The
arrangement would eventually attract top rated international financial services
firms to invest in the center and participate in the development of the African
continent.
AFRICAN
GROWTH AND OPPORTUNITY ACT
COUNTRY
ADVOCACY
It is generally agreed that
though aggregate trade between sub-Sahara Africa and the United State has been
declining, African Growth And Opportunity Act forum is an opportunity to
stimulate broader access to the U.S Market through stronger partnership.
equally important is the need to make African Growth And Opportunity Act work
for Africa and the United States, since Africa is considered a strategic
partner to the United States.
It is also pertinent to
appreciate the contribution of African Growth And Opportunity Act to Africa’s
development particularly in promoting non-traditional exports such as textiles
and apparels, leather products, aggro-processing products etc. African Growth
And Opportunity Act has also contributed to job creation and flow of
investments in some African Countries. It should be noted that despite the
positive contribution of African Growth And Opportunity Act to African
countries, there remain some challenges that are hindering the realization of
its full potential benefits. These challenges include:
i. Sanitary and
phyto-sanitary requirements;
ii. Restrictive rules of origin;
iii. Product Specific Standards
iv. Expiration of third-country
fabric rule in 2012;
v. Weak productive capacity of
most African Countries;
vi. Lack of regional value chain
vii. Weak competitiveness as well
as a result of weak infrastructure development.
viii. Uncertainty about the
future of African Growth And Opportunity Act having identified the above
challenges, African leaders are expected to;
i. Urge U.S to extend African Growth And
Opportunity Act beyond 2015;
ii. Urge U.S to align the
third-country fabric provision alongside the term of African Growth And
Opportunity Act;
iii. Urge U.S to consider the
concept of accumulation as a way of dealing with stringent rules of origin;
iv. Urge Government to relax the
rules of origin on fish and fish products to allow effective market access;
v. Urge U.S to provide support
for building productive
capacities as well as for
diversifying and expanding the production base in Africa;
vi. Urge U.S to be engaged more
in infrastructure developments in Africa; on the role of Private Sector and
Civil Society Groups from African Growth And Opportunity Act Beneficiary
African Countries, African leaders are expected to recommend measures on the
following key areas:
i. The role of Civil Societies in trade
promotion;
ii. Empowering women through
trade capacity building;
iii. The role of trade-related
technical assistance;
iv. The next generation;
v. Creating economies of scale
for small and rural producers; and
vi. Effective corporate
responsibility programming.
vii. Improving the implementation
of African Growth And Opportunity Act;
viii. Financing Africa’s
industrial development;
ix. Value-additions’ role in
expanding agricultural markets;
x. Stimulating intra-Africa
trade;
xi. Energizing the
competitiveness of African Agriculture.
Way
Forward:
As a way forward for Africa, it
is recommended that;
i. African Growth And Opportunity
Act beneficiary states are urged to shift focus towards US Africa productive
capacity development agenda which could set the basis for more profitable
trade.
ii. UNECA and AUC, in
collaboration with other organizations, are
requested to continue to support
member states in assessing various scenarios of African Growth And Opportunity
Act after 2015;
iii.African Growth And
Opportunity Act beneficiary States and the USG are urged to establish a joint
monitoring and evaluation mechanism to assess progress on the implementation of
decisions taken at AGOA Forums; and
iv. The AUC is urged to
strengthen its Office in Washington DC to better coordinate the activities of
African Growth And Opportunity Act.
CONCLUSION:
Hilary Clinton in 2010 while
reviewing the implementation of African Growth And Opportunity Act for decade,
remarked that “despite the best of intentions, African Growth And Opportunity
Act
has achieved only modest results” thus
highlighting the limitation of generating growth through market
access only in the absence of support to improve on Africa’s infrastructure and
other supply-side constraints. Nigeria will continue to address its
infrastructural challenges and supply side constraints to usher in a vibrant
manufacturing sector that will increase its market share in the US trade as
well as global international trade.
No comments:
Post a Comment