MUTATI URGES U.S AND SSA TO DEVELOP AN EFFECTIVE STRATEGY OUT OF THE AGOA PROCESS

Felix Mutati

Commerce, Trade and Industry Minister Felix C. Mutati, has urged the United States of America and eligible countries in Sub-Saharan Africa (SSA) to begin working at developing an effective exit strategy out of the African Growth and Opportunity (AGOA process, observing that the original architects of the AGOA process never meant to last forever.

The Minister observed that it was not in the best interest of Africa to go on demanding for perpetual extensions in the AGOA preference as this was not sustainable and helpful in the long term. The minister further stated that the preference should only provide a stepping stone to accelerate Africa’s standing in the globe economy.

Mr. Mutati said that while it is justified for sub Saharan Africa to appeal to congress to consider “our requests for extension of the third country fabrics provisions and the AGOA provisions beyond 2012 and 2015 respectively”, it was inevitable for Africa to begin engaging in serious discussion regarding the exit strategy out of the AGOA process.

Mr. Mutati was speaking on Thursday in Washington D.C when he briefed Members of Congress on AGOA. He challenged the gathering to look at the ‘new’ Africa with interest because of the enormous promise and potential it holds to the world.

 The Minister cited Rwanda and Zambia as among the top ten reformers stressing that the countries represent the future of the African promise.

“Rwanda has been ranked the best reforming country by the World Bank’s Ease of Doing Business Report. Similarly, Zambia was among the Top Ten reformers in components. Strides in this regard on the African side speak for themselves. An example being the fact that the top ten reformers in the World Bank Doing Business Report 2011 include three AGOA countries – Rwanda, Cape Verde and Zambia,” he said.

The Minister informed the gathering that during the year 2010 about 50 per cent of countries in sub Saharan Africa had posted GDP growth of 5 percent and above.

The Minister also referred to the International Monetary Fund (IMF) projections that predict that the growth in Africa would be around 6 percent for the year 2011, a figure he said was fair and objective outlook against the prevailing macroeconomic environment both at the global and continental level.

He said AGOA remains the cornerstone trade and economic tool for Africa and the US yielding some success stories such as the creation of around 300,000 jobs between 2001 and 2010 as a direct result of AGOA preferences.

Mr. Mutati noted that estimates also place the number of Africans impacted by the programme at about 10 million by virtue of them being integrated into the various regional value chains. He cited Lesotho as a country that experienced a 36 percent increase in employment from 29,000 to 45,000 in the first two years of AGOA Certification due to the establishment of new companies seeking to take advantage of the AGOA preferences.

He added that most of the companies set up operations in textiles, clothing and footwear, sectors that tend to be labour intensive and female worker friendly.

“Therefore, though not envisaged, AGOA in Lesotho has not only fostered new investments and employment, but also helped empower women by affording them access to a regular income,” he said.

Other speakers included Congressmen Chris Smith and Donald Payne, President of the Corporate Council on Africa (CCA) Mr. Stephen Hayes and Director, Africa Growth Initiative at Brookings, Dr. Mwangi Kimenyi.