The USAID East Africa Trade and Investment Hub (the Hub) boosts trade and investment with - and within - East Africa. It does this by promoting two-way trade with the United States (U.S.) under the African Growth and Opportunity Act (AGOA), facilitating investment, deepening regional integration and increasing the competitiveness of select agricultural value chains. The Hub is funded by the U.S. Agency for International Development (USAID). Read more under our ABOUT tab and please subscribe to our newsletter by clicking below.Subscribe to our newsletter
March 14, 2019
Ethiopia is a step closer to finalizing its National AGOA Strategy and Action Plan, 2019-2025 following a half-day stakeholder workshop convened by the USAID Hub and the Ministry of Trade and Industry on March 6. Fifty-nine stakeholders from the public and private sector gathered in Addis Ababa to provide feedback on the draft document completed by USAID Hub consultants. Their insights will inform the final strategy, set to launch in the coming weeks.
The National AGOA Strategy and Action Plan will provide a roadmap for Ethiopia to increase and diversify its exports to the U.S. under AGOA, also known as the African Growth and Opportunity Act. AGOA provides duty-free access for 6,421 tariff lines, giving the country a competitive advantage in the U.S. market. While Ethiopia’s AGOA exports are growing – they rose 62 percent between FY2017 and FY2018 (October to September) – the country has yet to reach its full potential.
The strategy focuses on five products/product groups with promising outlooks in the U.S. even without AGOA’s trade preference in recognition of the uncertainty following AGOA’s expiration in 2025. They are coffee, cut flowers, specialty foods (including oil seeds, herbs and spices, and edible oil extracts), textiles and apparel, and leather goods and footwear. The workshop brought together public and private stakeholders from these sectors to review their respective draft action plans and set sector growth targets for 2025, creating ownership over their commitments. The workshop also improved participants’ understanding of AGOA and its potential benefits if Ethiopia can overcome challenges and fully leverage the opportunity.
Mussie Mindaye, the Director of Multilateral Trade Relation and Negotiation Directorate in the Ministry of Trade and Industry gave opening remarks where he noted that Ethiopia had a growing merchandise trade deficit where imports far outstripped exports, creating a shortage of foreign exchange needed to fund imports. As a result, the Ministry has renewed its commitment to build on the AGOA opportunity to increase exports.
This is the seventh national AGOA strategy being developed in eastern Africa with the USAID Hub’s technical support. To view all of the strategies, visit AGOA.info here.March 14, 2019
Leslie Mittelberg and Priscilla Schleigh, a U.S. buyer and retailer respectively, confirmed that their trip from the west coast of the U.S. to Kenya was well worth it. “Kenya’s very rich in its resources,” said Leslie. She added, “It was really great to get to know some new artisans.”
On March 13, the pair met with six Kenyan producers of home décor products and fashion accessories at the USAID Hub’s office in Nairobi. They were looking for new items to introduce to their businesses. Leslie is the founder and designer of Swahili African Modern, which imports products from artisans in 14 different African countries, while Priscilla owns GIRAFFE, which sells handmade products from fifty countries. They examined samples and discussed which products could be promising among American consumers with the companies, leading to potential orders valued at $5,600.
Buyer missions are important opportunities for U.S. buyers to discover new products, view them firsthand and get to know entrepreneurs. Priscilla explained, “Developing very personal relationships with the people you’re buying from is critical. They become your family.” She elaborated, “There’s always things that go wrong. You have to have a good relationship to solve it.”
Kenya’s home décor and fashion accessories sector represents an important, but small export sector to the U.S. With less than 1 percent of the U.S. market share, there is considerable space for exports to expand as the market grows. Given its potential, home décor and fashion accessories was designated one of Kenya’s focus sectors in its National AGOA Strategy and Action Plan, 2018-2023. However, to reach its potential, producers will need to achieve export-quality production that meets U.S. buyers’ expectations and raise awareness of Kenya as a sourcing destination. Buyer missions can help firms accomplish this.
“Taking small artisans and trying to let them make it on their own in Europe, the United States…it isn’t going to work out. What they need to find is importers like myself…we’re their continuous links to the countries,” explained Leslie.
Buyers, especially small or mid-size buyers, can generate small order sizes for artisans to prove their export capacities. They can also guide them on product designs, helping them tailor their products to U.S. consumer preferences. These opportunities are critical for firms that may be too small to attend trade shows or travel to the U.S. on their own where they can make connections and learn about U.S. market trends. Priscilla described their participation in the buyer mission as being a “bridge builder,” or someone who could “close that circle of fair trade.”
The USAID Hub has completed 25 buyer missions, leading to 265 linkages worth an estimated $8 million. The Hub pre-selects producers and helps them prepare portfolios in advance of the visit. The buyer missions connect U.S. buyers with East African producers for greater exports under AGOA.
New on our Knowledge Center: Electricity Access in Sub-Saharan Africa - Uptake, Reliability, and Complementary Factors for Economic ImpactPublished on March 14, 2019
Access to reliable electricity is a prerequisite for the economic transformation of economies in Sub-Saharan Africa (SSA), especially in a digital age. Electricity Access in Sub-Saharan Africa by the World Bank Group outlines that due to the substantially low access rate to electricity, households and businesses with access often face unreliable service, and the cost of the service is often among the highest in the world. This situation imposes substantial constraints on economic activities, provision of public services, adoption of new technologies, and quality of life. Much of the focus on how to best provide reliable, affordable, and sustainable electricity service to all has been on mitigating supply-side constraints. However, demand-side constraints may be as important, if not more important. On the supply side, inadequate investments in maintenance result in high technical losses; most state-owned utilities operate at a loss; and power trade, which could significantly lower the cost of electricity, is underdeveloped. On the demand side, the uptake and willingness to pay are often low in many communities, and the consumption levels of those who are connected are limited. Increased uptake and consumption of electricity will encourage investment to improve service reliability and close the access gap.March 14, 2019
The 2019 Trade Policy Agenda and 2018 Annual Report is a publication by the Office of the United States Trade Representative (USTR). The report outlines how the Trump Administration continues to engage with other countries regarding efforts to deepen trade relationships, promote fair, balanced trade, and support American jobs and prosperity. For example, in August 2018, the United States and Kenya established a trade and investment working group to explore ways to deepen trade and investment between the two countries. At present, trade between the two countries stands at about $1 billion per year, and over 70 percent of Kenya’s exports to the United States enter under the African Growth and Opportunity Act (AGOA). The Administration’s engagement with African countries is intended to support comprehensive trade policies and begin to lay the groundwork for a stronger future trade relationship.