Nissan Patrol Nigeria assembly
OPINION : MAKING " MADE IN AFRICA " LAST managed to overcome these hurdles . Namibia , for example , recently became the first African country to gain eligibility to export boneless ( not ground ) raw beef products to the US . There is no doubt that the AGOA has created important opportunities for the countries involved . But it will not last forever . Having been extended for another decade last year , it is now set to remain in force until 2025 . In other words , countries have just nine years left to ensure that the industries that have grown under the AGOA not only survive , retaining the thousands of jobs that have been created , but continue to grow .
Given that Africa now accounts for just 1 % of America ’ s $ 350 billion textile and apparel market , there is plenty of room for expansion . But competition will be fierce . If the US eventually ratifies the Trans-Pacific Partnership trade deal , countries like Vietnam could erode Africa ’ s share of the US market in textiles and apparel .
The key to success for African countries will be to strengthen the skills base and build competitive industries in the textile and apparel sector . A country that could emerge
as a key player is Ethiopia , which for the first time was named as a possible global sourcing destination in a 2015 McKinsey survey of 40 global chief procurement officers . The challenge for Ethiopia – and for other African countries – is to raise its status from sourcing option to business priority .
To do so , countries should take the invaluable lessons provided by the AGOA to stimulate their export industries ’ growth and seize market share not just in the US , but also in other economies , including within Africa . In fact , the AGOA has helped enhance intra-African trade by enabling producers in different countries to create new , cross-border value chains that benefit all . Botswana , for example , now exports leather to South Africa , where it is processed into upholstery for luxury cars and exported to the US .
The African Development Bank also has a role to play , particularly in infrastructure development . By promoting regional integration , improved infrastructure can enhance trade and support skills development . Here , the AfDB ’ s Industrialize Africa strategy , which emphasizes regional value chains , will be particularly valuable , as it recognizes the opportunities that industries in one country can provide to those in neighboring economies .
At the same time , the AfDB must continue working to help meet demand for trade finance in Africa , currently estimated at $ 120 billion , with a focus on export-oriented small and medium-size enterprises ( SMEs ). Important strides have already been made . The AfDB ’ s Trade Finance Program , established in February 2013 , has so far supported more than 85 domestic banks in 27 African countries , catalyzing approximately $ 3.4 billion in trade in vital sectors such as agriculture , manufacturing and construction , and energy . More than 60 % of the transactions involved SMEs .
At last month ’ s Ministerial AGOA Forum , African trade ministers recognized the urgent need to plan ahead , committing to the creation of a task force to outline strategies for US-Africa trade and investment relations beyond 2025 . This is a good start . But the clock is ticking , and Africa ’ s AGOA privileges will soon be eliminated . We must be ready .
2016 | Business Times Africa 15