Malawi, others lobby for Agoa extension
Malawi has joined other African countries to push for an early 10-year extension of the African Growth and Opportunity Act (Agoa) trade window beyond 2025.
Agoa, a United States (US) Government trade initiative passed in 2000 to deepen trade ties with Africa and help African countries develop their economies, provides duty-free access to the US market and is due to expire in September 2025 after being renewed twice.
In a written response on Friday, Ministry Trade and Industry spokesperson Mayeso Msokera said Malawi wants Agoa to be extended because it has contributed towards enhancing exports to the US since becoming a beneficiary in 2000.
He said: “Overall, Malawi has maintained a trade surplus with the United States over the past two decades with its main exports to the USA being tobacco, macadamia nuts, cane sugar, tea and textiles and apparel.
“Malawi is joining other beneficiaries in calling for the renewal of Agoa beyond 2025, but the success of which will depend on the US Congress.”
In the current window, Malawi hoped to increase exports to the US through Agoa by 20 percent from $51.3 million (K61 billion) from 2016 as outlined in the National Agoa Response Strategy and Action Plan for Malawi.
But published data from a latest Agoa update showed that in 2021, the country’s exports to the US market were recorded at $25 (about K30 billion).
Regardless, Malawi ranks 15 out of 35 countries in Africa that have utilised the Agoa trade window the most over the past 23 years.
Since Agoa’s inception in 2000, Malawi has exported goods worth $1.55 billion (about K1.68 trillion) to the US, with $1.15 billion (about K1.24 trillion) qualifying for Agoa preferences.
Malawi’s exports to the US have increased by 6.5 percent from $15.9 million (about K17.23 billion) through June 2022 to $16.94 million (about K18.56 billion) as of June 2023, according to Agoa figures.
National Working Group on Trade and Policy chairperson Fredrick Changaya said yesterday there is need for continued awareness on the existence of the trade window and incentives for exports to ensure more Malawians take advantage of the pact to grow exports.
“Agoa is a big market that needs to be harnessed to ensure Malawi benefits more,” he said.
In a video message to a US-Africa Trade Summit on Friday in Johannesburg, South Africa, US Secretary of State Antony Blinken said US President Joe Biden’s administration wants to work with Congress to improve a US-Africa trade pact, not just renew it without changes.
On September 27 2023, US Senator John Kennedy introduced the Agoa Extension Act of 2023, a Bill that would extend the Agoa through September 2045.
Agoa has been key in helping the US work with sub-Saharan Africa to facilitate trade, reduce poverty, promote democracy and counter China’s growing influence in the region.
Congress first enacted the Agoa in 2000. The programme encourages African countries to adopt market-based economies, support democracy and protect due process and the rule of law.
In turn, Agoa-eligible countries receive duty-free access to thousands of products.
