Washington — Africa has become the next economic frontier, thanks to outstanding recent growth, new reforms and better governance across the continent, according to Assistant U.S. Trade Representative for Africa Florizelle Liser.
“With the kinds of growth rates that we see, the reforms that have taken place in many sub-Saharan African countries, the … business reforms that they have made, the leadership that we’re now seeing on the continent and advances in democracy [and] fewer conflicts, we recognize that Africa’s time has come,” Liser said in testimony before the House Foreign Affairs Subcommittee on Africa, Global Health and Human Rights.
“As many of the fastest-growing economies in the world with rapidly growing middle-class consumers are on the continent, [Africa] has enjoyed significant economic growth in the last few years,” she said, adding that returns on investments in Africa “rarely dip below 10 percent, representing one of the highest rates of return in the world.”
Liser said during the April 17 testimony that companies around the world looking to grow “absolutely must have an Africa strategy” for engagement.
At the heart of the U.S. government’s work with Africa, Liser said, is the African Growth and Opportunity Act (AGOA).
“AGOA has defined our trade relationship with the continent and been responsible for expanding and diversifying African exports to the United States” since it was signed into law by then-President Bill Clinton in May 2000, she said.
The pivotal economic development program, designed to promote U.S. trade and investment ties with sub-Saharan Africa, provides trade preferences to the 40 participating African countries through the removal of nearly all tariffs on goods exports. It also breaks down other trade and customs barriers in an overall effort to help stimulate economic growth, encourage economic integration and help bring sub-Saharan Africa into the global economy.
AGOA has helped many African countries increase and diversify their exports, bringing U.S. imports from the region to $74.2 billion in 2011, up 14 percent from the previous year. This growth was driven largely by increases in exports of mineral fuels, precious metals and stones, vehicles and cocoa products.
U.S. exports to the region have tripled from less than $7 billion in 2001 to more than $21 billion in 2011, according to the U.S. Department of Commerce. This growth was driven by increases in exports of machinery, vehicles, mineral fuels, cereals and aircraft.
“Not only has AGOA been good for Africa, but it has also been good for U.S. businesses,” Liser said. “We’re getting more of a range of products coming from them to us and more of a range of products going from the U.S. to a wide range of countries there as well,” she added.
Critical in supporting this continued growth and diversification, Liser said, will be AGOA. The 2012 AGOA annual forum will be held in Washington June 14–15 and will focus on how to improve Africa’s infrastructure to facilitate and increase trade and development. It will bring together more than 600 participants, including senior U.S. and African government officials, members of the private sector and civil society representatives.