Many countries in Africa are experiencing rapid economic growth.
Many countries in Africa are experiencing rapid economic growth. According to the International Monetary Fund, growth in sub-Saharan Africa will surge to 5.7 percent next year, well ahead of the global average of 4 percent.
Speaking at the World Economic Forum in South Africa,U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Robert Hormats noted that Africa is booming in every sector, ranging from massive energy developments in Mozambique, Tanzania, Ghana, and other countries; to growth of Rwanda and Kenya’s information and communications technology sectors; to South Africa’s thriving auto industry.
Nevertheless, barriers to trade in Africa continue to limit economic growth. Cross-border trade in Africa is hindered by what the World Bank calls “Thick Borders.” According to the World Bank’s latest Doing Business Report, it still takes up to 31 days to clear exports and about 38 days to clear imports in Africa.
That’s why the United States would like to see a multilateral Trade Facilitation Agreement, which would commit World Trade Organization members to expedite the movement, release and clearance of goods, and improve cooperation on customs matters.
The cornerstone of America’s trade relationship with sub-Saharan Africa is the African Growth and Opportunity Act, known as AGOA. Of all U.S. trade preference programs, AGOA provides the most liberal trade access to the U.S. market.
Exports from Africa to the United States under AGOA have grown to $34.9 billion in 2012. While oil and gas still represent a large portion of Africa’s exports, it is important to note that non-petroleum exports under AGOA have tripled to nearly $5 billion since 2001 when AGOA went into effect.
Although progress has been made on diversifying exports beyond energy, much remains to be done. Through AGOA and the “Doing Business in Africa Campaign,” the U.S. is promoting a business climate in Africa that encourages trade and investment. The U.S. also recently launched the U.S.-East African Community Trade and Investment Partnership designed to build confidence among the private sector by building a more open, efficient, and predictable business climate in east Africa.
Trade is at the heart of Africa’s economic resurgence. Trade is also at the heart of America’s economic recovery. So when it comes to trade, what is good for Africa is good for America.