TRALAC - Trade Law Centre

Botswana Outlines AGOA Challenges

Monday, 15 August 2005

Source: Mmegi/The Reporter (Gaborone)

Botswana's Minister of Trade and Industry Neo Moroka says that the biggest challenge for beneficiary countries under African Growth and Opportunity (AGOA), lies in diversifying exports from textiles and apparel sectors to attaining global competitiveness and attracting investment.

Moroka said last week that the benefiting countries diversification should compete for product lines in excess of the 6,000 under the current AGOA.

Given this window of opportunity, the local business community should launch a total onslaught and diversify Botswana's exports to achieve global competitiveness.

During the launch of the Botswana AGOA Forum at the Southern African Global Competitiveness Hub (SAGCH), Moroka stated: "There exists challenges of assisting exporters, not only to access AGOA, but to broaden their exports base. Most importantly, entrepreneurs should strive to diversify exports away from the single line textiles and clothing to the more than 6,000 product lines under the Act. There lies business scope for the Forum to focus on promoting the much-needed investment which generates the required diversification of product lines." To this end, the Technical Committees on Investment and export development under the chairmanship of the Botswana Export Development and Investment Authority (BEDIA), which are sub-committees of the National Committee on Trade Policy (NCTPN) under the Ministry of Trade and Industry, have been established to achieve export promotion objectives.

I urge incumbents to collaborate with these technical committees and assist each other to reap the benefits offered under the AGOA initiative, as BEDIA is committed to working closely with the Forum."Although AGOA has had positive results on investment and employment creation in the beneficiary countries, the performance of some economies has been uneven.

"I remain concerned that the majority of African countries, including Botswana, have not been able to attract as much investment under AGOA as had originally been envisaged. "The US re-classification of Botswana as a least developed country (LDC) under AGOA II has enabled the country to utilize third country fabrics for garment making and subsequent export to the US.

"For instance, benefits of the AGOA II initiative to Botswana are manifested by an increase in exports to the US from about US $13 million to US20.1 million from 2003 to 2004."

AGOA II has since July 2004 been extended to 2015, although the LDC privilege expires in 2007. The termination of the World Trade Organisation (WTO) Agreement on Textiles and Clothing (ATC) will, however, create uncertainty among investors in African beneficiaries of the Act. Given the gloomy scenario brought about by the expiry of ATC, there abounds business sense in appealing to the US to consider extending the LDC status of Sub-Saharan countries beyond 2007. In June 2002, the United States Agency for International Development (USAID) established the SAGCH in Gaborone to respond to President George W. Bush's announcement of his new African trade initiative.

The idea offers trade capacity building and trade competitiveness assistance, including support on AGOA to facilitate trade between Southern Africa and the US. It also provides regular information on trade facilitation, barriers, sanitary and phytosantry measures.

The US established the Global Competitive Hubs (GCHs) to support the West African and East, Central African and Southern African business communities through satellites in Ghana, Kenya and Botswana, respectively. The AGOA forum is a joint private and public sector partnership designed to explore and promote export diversification to the United States. It was promulgated to extend preferential access to the US market by African countries, beyond the Annual Generalized System of Preferences (GSP).

The GSP is subject to annual Congressional reviews and does not provide sufficient confidence for investors in beneficiary countries. Since the US and Government jointly ratified AGOA in 2000, (At the time of the signing, Botswana was not a beneficiary until 2002, when it was accorded a LDC status).

Greater part of Botswana's exports, however, have been in clothing.

The expiration of the export quota under the Agreement on Textiles and Clothing in January 2005 is threatening the success story in this sector.

The Botswana AGOA forum presents companies with a unique opportunity to interact and partner with the public sector to support both apparel and new exports.

Apart from Botswana, Southern African Customs Union (SACU) member states that also include Lesotho, Namibia, South Africa and Swaziland have been since June 2003 negotiating for free trade agreements, in this context.



“AGOA Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Botswana’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.