It is disheartening that Nigeria has not been able to take full advantage of the Africa Growth Opportunity Act (AGOA) since its introduction in 2000. The AGOA was a piece of legislation introduced by the United States (US) congress for close to two decades now to promote trade in some goods between African countries and the US.
Speaking on the subject at a recent briefing in Lagos, the US Trade Representative for Africa, Constance Hamilton, blamed Nigeria’s over-reliance on crude oil exports as responsible for the country’s inability to fully benefit from the AGOA initiative.
The country’s notorious mono-product culture has been well-known. Since the discovery of oil in the country in 1958, the leadership has abandoned the developmental strides and initiatives of the pre-colonial and early independence years to concentrate on crude oil exports and what it can afford the country. Referred to cynically as the “black curse,” the country’s reliance on crude oil proceeds has denied her the opportunity to realise her vast economic potentialities.
The lost opportunities have been so stark over the intervening decades so much so that the need to diversify the economy has become a sing-song. Unfortunately, the political will to implement the policies and programmes by successive administrations has been missing largely. This has left most of the African countries with huge imbalances with their trading partners. Whether the trade is with Europe or US the story is the same.
A cursory look at the 2017 data, for example, showed that the US trade deficit with sub-Saharan African countries stood at US$10.8bn, with goods exported from the US at US$14.1bn and imports into US at US$24.9bn. On the surface, it would look like it is to the advantage of Africa, but in reality, it is not because most of our exports to the US are raw materials, especially crude oil. There is a huge trade imbalance as we import mostly finished products, high tech equipment and skilled manpower from America. In terms of value-added therefore there is a huge gulf.
Realising this gap, the AGOA was apparently formulated by the US government to give African countries an increased access to the US market. While countries like Kenya, Botswana, Ivory Coast and the rest have taken advantage of the opportunity to expand their trade, Nigeria has been lagging behind. The AGOA currently has over 1,800 products in primary metals, petroleum and coal products, agriculture and horticulture, chemicals, including clothing and textiles listed, but the country has not been able to maximise the opportunities that abound.
This is a very sad development, given that African countries have the capacity to produce the listed products. Presently, Nigeria is the world’s leader in yam and cassava cultivation. It is also very strong in the production of other agricultural products such as maize, sorghum, groundnuts and vegetables. But these products have not been harnessed for local consumption and export. To qualify for export, and especially in the AGOA Act, it is stated that the intending products must meet with local processing (Rules of Origin) as well as customs requirements. This is where the country has failed.
The local farmers and manufacturers have ignored the stringent export conditions. Only last year, the opportunity to export yam tubers to the US was wasted as the products were rejected for non-compliance. To achieve the requirements, farmers who grow the export products have to work with agriculture extension services officers from planting to harvest. The right and acceptable chemicals, pesticides and herbicides have to be used and in the right measures to ensure strict compliance. Even after harvest, storage, packaging and branding in accordance with the requirements of the importer have to be adequately met to ensure acceptance when they finally arrive at the port of destination.
Nigeria has the capacity to meet these requirements and must work very hard to meet them. AGOA and similar trade opportunities have not been fully unexploited.