One of the most obvious examples of how integrated the world has become is the rise in global trade. In 2007 just one percent of world trade was worth $199 billion – much larger(actually 4 times larger) than the total development assistance to Sub-Saharan African countries from G8 member countries that year. Yet regions such as Africa still face considerable problems accessing the enormous benefits of increased global trade. These problems range from inadequate or antiquated infrastructure; weak regulatory environments; to insufficient local capacity.
The African Growth and Opportunity Act (AGOA), signed into law on May 18, 2000, was a response by the United States to provide an arrangement for African countries to bolster their trade opportunities with the U.S. with the end goal of strengthened free market economies and improved economic environments in these countries. Since its inception, AGOA’s impact on economic development in Africa has been significant - more than 300,000 jobs have been created in Africa; non-oil exports have increased by 340% and imports have grown by an equally impressive 51% from 2007 to $5.1 billion in 2008. In Kenya alone, the exports to the United States have more than tripled! Apparel exports in Kenya have remarkably increased from $111 million to $344 million in 2008 .
The Honorable Dr. Timothy Thahane, Minister of Finance and Development Planning, The Kingdom of Lesotho, during his remarks at the celebration of the 10th year anniversary or AGOA also extolled the benefits of AGOA to the Lesotho economy. He noted that small textile industries that were previously employing less than 10,000 women, currently employ about 50,000 women under AGOA. AGOA is having a lasting impact in many African countries.
The challenge of AGOA is in maximizing the benefits of the global economy and ensuring all people share in those benefits. There is a need to re-double efforts in building the capacity in Africa in order to exploit the full potential of AGOA. These range from:
Training entrepreneurs on the fundamentals of business proposal development, identifying the target market, and understanding the different regulations affiliated with exporting a particular product;
Conducting targeted trade missions to highlight viable opportunities for U.S. businesses in African countries;
- Expanding access to information regarding available opportunities that exist through AGOA;
- To Establishing support networks for SMEs (small to medium enterprises).
Equally important for AGOA and beyond, is the need to foster an entrepreneurial spirit among Africa’s large youth population. African governments should focus on creating a generation of Africans who are ably equipped to tap into the vast opportunities affiliated with global trade. Leadership development training is one such means to prepare Africa’s youth to be leaders in the fields of business, education, science, politics, agriculture and the list goes on.