Energy demand still drives US interest in Africa

As US Government officials arrive in Nairobi to take stock of Africa Growth Opportunity Act (AGOA), America would have to convince Africans that its main motive is not rooted in oil.
The three-day forum is an annual high level event that allows officials from AGOA eligible countries and officials from the US to review implementation of the Act. While it allows 38-eligible countries to export nearly 6,500 products to the US duty-free and quota-free, only a handful of products actually get there.

Have faced
For instance, agricultural goods, which many African countries comfortably produce, have faced difficulties entering the US because of numerous food safety and agricultural health standards they have to conform to. Further, the US Government heavily subsidises its farmers thus lowering their production costs and in the process making it hard for African produce to compete in terms of pricing.
This has left only a few oil producing countries to benefit from this legislation passed by Congress in 2000 with the intention of promoting sub-Saharan exports into the US.

Most of AGOA exports have been in the oil and gas industry accounting for more than 90 % of the total value of imports into the US. Nigeria, South Africa, Angola and Gabon together claim over 90 % of US imports from Africa mostly in petroleum products.
For that reason, there have been calls for a need to broaden the group of countries that benefit from AGOA by the US supporting Africa to increase her agricultural exports as well.

Impact on hunger
"Unfortunately, this industry (oil) has little impact on hunger and poverty alleviation, and instead has been associated with frustration, tension and in some cases civil conflict," said Comesa secretary general Sindiso Ngwenya.
"Without decreasing the importance of oil and gas for our economies, we believe that the most effective means of raising livelihood standards for Africa's poor is by growing Africa's agricultural sector," he said recently.

Africa's agricultural exports to the US have so far been miniscule, accounting for less than 1 % of the total value of exports. South Africa is the major agricultural exporter to the biggest world economy under AGOA, together with Malawi and Kenya.
"AGOA should be enhanced by including products currently ineligible for AGOA duty-free treatment," added Mr Ngwenya. This would expand benefits to include a number of agricultural commodities currently subject to Tariff Rated Quotas (TRQs) where imports above a minimal amount are often subject to prohibitive duties.

In 2006, US Congressman Donald Payne asked his government to look for ways to deepen AGOA's coverage of Africa's agricultural sector, which is where about 80 % of all sub-Saharan Africans earn their livelihoods. Increasing investment and incentives to African agriculture through AGOA, he said, would be the surest way of fighting poverty and hunger, especially among the poorest and most needy.
Mr Payne cited farm subsidies paid by developednations as the biggest obstacle to Africa's enhanced agricultural trade.

"The US, EU (European Union) and Japan combined spend more than $ 360 bn a year on subsidies to farmers or about $ 1 bn (Sh 78 bn) a day," he said, and for that reason, "we must end these farm subsidies."
While four oil-producers account for over 90 % of the total African exports to the US, similarly, five countries account for 90 % of apparel exports.

Meet standards
Mr Ngwenya said: "I suggest that the most important assistance needed is to help Africa's AGOA exports to the US particularly in agriculture, agro-processing and other kinds of industries by resolving critical supply -- and demand-side constraints that face African farmers and businesses."
These constraints include inability to meet US sanitary and phytosanitary standards and lack of market information and knowledge about their consumer preferences. Producers in the region have for a long time been keen to access the US market for export of the full range of vegetables.

Limited number
Presently, those in the region are only allowed to export a limited number of goods (three for Zambia and three for Kenya) to the US market out of the more than 15 or so types of vegetables grown for the export market.
USAid regional trade advisor Stephanie Wilcock told that the US was committed to helping African countries increase their agricultural products exports to the US. She said that her government had employed a specialist to be based in Nairobi to advise countries in the region on agro-food standards for goods intended for the American market.