Africa's textile and apparel exports to the United States could quadruple over the next decade through an extended duty-free trade treaty. Africa can also create another 5,00,000 new jobs.
The trade program known as the African Growth and Opportunities Act (AGOA) provides eligible sub-Saharan countries duty-free access to the world’s top apparel market, giving Africa a competitive edge over suppliers such as Bangladesh and Vietnam.
The program, in which about 40 African countries are eligible to take part, is expiring on September 30 and could be extended another 10 years.Established in 2000, AGOA has already been renewed past its original 2008 expiration date.
Last year, US clothing imports from sub-Saharan countries were up nearly six per cent from 2013, as countries such as Lesotho, Kenya, Ethiopia and Tanzania participated in the program. With AGOA’s extension Asian firms with factories in Africa are likely to follow through on investment.
Though Africa has lower labor costs and abundant raw materials, such as top quality cotton from Uganda, congested ports, a poor road network, lack of skills and old technology are a hindrance. Costs may be rising in Asia, but they are still way more competitive than Africa, especially on productivity, quality and product range.
trade.gov/agoa/
