By Ruth Wereberi
Kampala
US president Joe Biden revealed plans to expel Uganda, Gabon, Niger both which are currently under military rule following coups this year and Central African Republic from the special US-Africa trade program, the countries were either involved in gross violations of internationally recognized human rights or making progress in democratic rule.
Last month, the US government had said it was considering removing Uganda from African Growth and Opportunity Act (AGOA) and introducing sanctions on the country after it passed a controversial anti-homosexuality law.
Despite intensive engagement between the US and the countries, the African countries have failed to address US concerns about their non-compliance with AGOA eligibility criteria. The four countries are yet to react to the announcement which comes just before South Africa is due to host the 20th AGOA forum.
The expulsion is set to take place from the start of next year and is likely to impact their economies as AGOA has been credited with promoting exports, economic growth and job creation among participating countries.
African Growth and Opportunity Act is a trade preference Act which was enacted on May 18 ,2000 as public law 106 of the 200th congress. It promotes economic growth in eligible sub-Saharan African countries by providing duty-free access to the US market.
US president Barack Obama signed the AGOA trade preference extension Act into law extending the AGOA legislation by an additional 10years to 2025.
What this means for Uganda.
One of the key benefits however remains preferential market access to the US market that is given to over 6000 products when these originate from the AGOA beneficiary country. By removing US import duties on products covered by AGOA, producers and exporters in beneficiary countries indirectly receive a competitive advantage over exporters in other countries who may need to pay standard US import duties which for certain textile articles might be more than 30% on the value of the product, the preference claim is always made by the US importer.
Uganda as a beneficiary country gets permission to use third country fabric under special rule for apparel.
It also gets permission to accumulate product value across AGOA eligible countries.
Effects of the expulsion from the AGOA trade program.
The question then should be, are there any other alternatives with the same presumed benefits gotten from AGOA?
Can Uganda’s agricultural sector thrive without AGOA in play
Is there any room for dialogue in-order to remove the sanctions placed on beneficiary countries, in this case Uganda?
Following the suspension of Uganda from the USA trade deal under the African Growth and Opportunity Act (AGOA), the Southern and Eastern Africa Trade Information
Products that Uganda has been exporting to US
Agricultural products that have been going to the US market through AGOA include sugar cane, plantains, cassava, maize, sweet potatoes, milk, vegetables, beans, bananas, and sorghum. Others include crafts such as baskets. The call follows an announcement by US President Joe Biden of plans to scrap Uganda’s AGOA program from the US Markets last week. AGOA, which was established by Congress in 2000
Performance Uganda in AGOA Market over the years
A year before the COVID-19 pandemic (2018/19), AGOA initiative, Uganda’s exports to the US were valued at $1 million (nearly Shs4 billion). In 2019/2020, the exports grew to $3.4 million (about Shs 13 billion) and by the close of 2021, they rose to $5.1million (about Shs 20 billion).
Looking for other alternative market
Although Uganda has been earning more cash from AGOA with estimation of Shs 20 billion but the country need look for others alternative market
According to Bank of Uganda preliminary findings, regionaland middle East Markets remain key destinations for Uganda’s export. Uganda exports increased to 379.16 USD Million in July from 365.13 USD Million in June of 2022 and agricultural products account for 80 percent of total exports.
which with standards, Uganda’s products on the global market will further increase.
The biggest Ugandan export is coffee and accounts for 22 percent of total exports, followed by tea, cotton, copper, oil and fish.
Other Uganda’s main export partners include Sudan 15% for 15%, Kenya 10 %, DR Congo, Netherlands, Germany, South Africa and UAE.
The writer is a researcher, an advocate, Politician