Exports to AGOA jump After years of decline

Malawi’s exports to the United States (US) through the African Growth and Opportunity Act (Agoa) trade window jumped in 2016, after four years of continued decline, a report has shown.

According to the US-sub-Saharan Africa (SSA) trade report for January to December 2016, the country’s exports jumped 13 percent to $42.15 million (about K31 billion) from the previous year’s $37.2 million (about K27 billion).

Malawi exports to Agoa have been dwindling since 2012.

Data from Agoa website www.agoa.info indicate that exports picked up in 2012 to $63.94 million (about K47 billion) from $56.97 million (about K42 billion) in 2011, but started to decline in 2013 to $54.50 million (about K40 billion).

In 2014, exports declined further to $50.67 million (about K37 billion) and again to $37.20 million (about KK27 billion) in 2015, only to start picking up in 2016.

The dwindling exports to the Agoa is an indication of a lack of a vibrant production sector, according to James Kamwachale Khomba, a finance and corporate strategy expert, who is also a lecturer at the Polytechnic, a constituent college of the University of Malawi.

In an interview on Tuesday, he said in the  absence of a vibrant production sector, there is little that the country can benefit from Agoa, a US Trade Act enacted on May 18 2000 which expired in 2015 and was renewed for another 10 years to 2025.

The legislation significantly enhances market access to the US for qualifying sub-Saharan African countries.

Said Kamwachale Khomba: “We are not exploiting benefits of Agoa despite various government interventions to promote exports because there is little production in primary goods and agro-processing, including tertiary production.

“Until we radicalise production, we will not be able to improve our exports because as a country, we are busy importing and not investing in production.”

Neighbouring countries have also not done well in the period under review.

Tanzania’s exports have slowed to $159.6 million in 2016 from $172.8 million from the previous year, Mozambique slowed to $146.95 million from $264.2 million; South Africa slowed to $4.6 billion from $5.4 billion while Zambia’s exports slowed to $81.18 million from $84.17 million.

Mozambique exported $28.97 million worth of products to US in 2016 down from $37.83 million the previous year.

Malawi is number 33 in terms of export value in US-SSA trade pact and its export products include agricultural products, forest products, chemicals and related products, energy related products, textiles and apparel, footwear, minerals and metals.

Agoa is one of the many strategies by the US government to promote exports from African countries. The Agoa trade agreement gives duty free benefits to selected African States to export to the US.

In an interview on Tuesday, Minister of Industry, Trade and Tourism Joseph Mwanamvekha said while Malawi has not yet fully exploited the Agoa trade act, the country is still benefiting as it is selling more to the US.

He, however, said that to fully benefit from Agoa, the ministry has drafted the Agoa Strategy which should give direction in terms of planning for the exports. n