Agoa extends benefits for Namibia and Botswana

Leonard Neill
NAMIBIA AND Botswana will benefit from planned amendments to the US African Growth and Opportunity Act (Agoa) which are now before the US congress for ratification. The proposed changes to the act will increase investments in Africa's textile and apparel industry during the next few years, with the emphasis on the lesser developed countries, according to a US embassy spokesman in Pretoria.
The amendments will double the duty-free access to US markets for these countries for the course of the eight years Agoa is scheduled to run. At present African duty-free apparel exports are limited to 1,5% of total US clothing imports and will grow to 3,5% by 2008. If and when the changes are approved, these limits will increase to 7% over the act's life.
According to the US embassy economic office in Pretoria, the amendments will allow Namibia and Botswana the same preferential access to US markets now enjoyed by lesser developed countries such as Lesotho and Malawi.
Although South Africa, as a major production country on the African continent, is not affected directly by any changes to the act, the country would benefit indirectly by any moves in this direction, according to textile and apparel manufacturers. The bulk of all raw material in manufacturing must be sourced from within the African continent itself.
African exporters as a whole will be helped by US importers looking to broaden their sources of supply, says industry leader Gordon Joffe. These importers no longer want to be too dependent on any geograpic region and this, he says, will benefit South Africa.
Even before the advent of Agoa, exports to the US were increasing and South African producers were gaining prominence in the US, says Joffe.
Exports under Agoa are increasing significantly in the second half of this year, six months after the act took effect. The bulk of benefits will be felt Ôtwo to four years down the track' because there will be a lead time of up to a year for new business deals to be signed, he says.