TRALAC - Trade Law Centre

Zambia: Government, stakeholders' AGOA review timely

Thursday, 12 September 2013

Source: The Zambian

Government's initiative to engage the Zambia Association of Manufacturers (ZAM) and other stakeholders to review the country's performance under the African Growth Opportunity Act (AGOA) duty-free export market, underscores the importance it attaches to the development of the manufacturing industry.

Its concern emanates from Zambia's failure to export products to the lucrative US market despite the numerous incentives offered under the AGOA facility.

This comes on the heels of a recent report by the Hub Digest, a publication of a US Government department of Commerce, which indicated that Zambia's failure to utilise the AGOA market was due to the lack of a well-coordinated garments industry.

The failure does not only apply to Zambia alone, but to Africa as a whole, whose performance on the AGOA market in 2013 had dwindled considerably, compared to previous years, a fact that points to the lack of capacity to meet growing demand for that market.

Although some African countries such as Kenya, Lesotho and Mauritius, have tried under difficult circumstances, it is important to note that their manufacturing industries are all performing very well.

For instance, The Hub Digest reveals that, Lesotho emerged as a top exporter of garments to the AGOA market earning revenue in excess of US$314 million, followed by Kenya which raked in $259 million, and Mauritius which earned not less than $159 million.

The performance of these countries as well as others under the AGOA facility has helped in the creation of more than 300,000 job opportunities.

Countries such as Ghana and Ethiopia, for instance, have also exhibited a strong manufacturing capacity which makes them sustainable on the AGOA export market.

What has caused all this in the case of Zambia is the fact that the country's manufacturing sector, which should have been producing apparel and other textile garments mainly for export to the US market, has completely collapsed.

The announcement by Commerce, Trade and Industry deputy minister Miles Sampa that Government is in the process of reviving the local textile industry, is an economic decision that needs to be expedited and implemented as soon as possible.

It is believed that Government meeting with all the stakeholders will yield the desired results and put the country's manufacturing sector back on its feet again.

Government should give full support to the revival of the manufacturing industry by looking at some of the bottlenecks that have led to the general collapse of the sector which includes the lack of incentives as well as other pressing issues which makes it uncompetitive in the face of imported cheap textile products from Far East countries such as China and India.

It is not too late for Zambia, especially that the US Congress last year extended the provisions under the AGOA facility up to September 2015 and this gives chance to participating countries, to build capacity in the manufacturing sector to enable them become more competitive on the US market.

The other important factor worth noting is that by building capacity in the revived sector, Zambia would prepare well to meet growing demand in the region, should the US government decline to extend the facility beyond 2015.

What the Zambian Government and all stakeholders should realise is that, AGOA has proved largely successful as a tool of economic development for African countries and this will help in massive job creation, increase export revenue for the country and help to alleviate high poverty levels.

As Private Sector Development Association (PSDA) chairperson Yusuf Dodia has indicated, there is an urgent need for collaborative strategies between Government and the private sector, if the country is to reap full benefits from the AGOA export market.

This is the time for Zambia to strengthen the local manufacturing sector whose shortcomings have been exposed through the country's failure to utilise the duty-free US market otherwise, the call by Africa to extend the facility by at least 15 years, will be meaningless if these same countries fail to build the export capacity.

View related news articles

Zambia urged to benefit from AGOA

Zambia urged to benefit from AGOA

Zambia needs to take advantage of the African Growth and Opportunity Act (AGOA) as it still possesses opportunity for economic growth. Since its inception in 2000, AGOA has given duty-free and quota-free access to the United States market on about 6,000 products from qualifying African countries, including Zambia. Speaking at the Corporate Council on Africa (CCA)-sponsored...

19 June, 2017
Zambia: ‘Regional integration vital for growth’

Zambia: ‘Regional integration vital for growth’

Zambia will continue strengthening its participation in regional economic integration and trade investment platforms because the agenda will promote the country’s industrialisation efforts, a senior Government official has said. Ministry of Commerce, Trade and Industry permanent secretary Kayula Siame also said there is need for continued private sector sensitisation on...

14 October, 2016
Zambia: AGOA strategy development initiative completed

Zambia: AGOA strategy development initiative completed

The six month AGOA Strategy Development Initiative headed by the Honorary Consul of Zambia in California, Robert Sichinga Jnr and a team from the UCLA Anderson School of Management is complete and the final report was sent to the Zambia Development Agency. The final presentation was made at the UCLA Anderson School of Management  on Friday March 11th in the presence of...

15 March, 2016
COMESA: AGOA-US exports swell to $17 billion

COMESA: AGOA-US exports swell to $17 billion

Common Market for Eastern and Southern Africa (COMESA) exports to America under the African Growth Opportunity Act (AGOA) has amounted to US$17 billion. The exports through the COMESA eligible countries amounted to $17.3 billion by November 2015. COMESA secretary general Sindiso Ngwenya said the United States-COMESA Trade and Investments Framework Agreement (TIFA) provides...

08 February, 2016
US urges Zambia to diversify

US urges Zambia to diversify

The US government says the recent slump in copper prices serves as a timely reminder for Zambia to diversify its economy. US Ambassador to Zambia Eric Shultz says serious efforts must be taken to shift the economy to agriculture, tourism and power generation. Speaking when he officiated at the eighth US-COMESA consultative trade meeting, Ambassador Shultz also urged member...

08 February, 2016
Zambia to boost AGOA with strategy

Zambia to boost AGOA with strategy

Zambia has developed a strategy to help local exporters increase penetration of the United States of America market under the African Growth and Opportunity Act (AGOA). The National Response Strategy which has cost US$100,000 will be implemented to address the difficulties that Zambian companies faced in accessing the US market in the last 15 years of utilising the...

23 April, 2015