WITH just a three per cent share of global trade, sub-Saharan Africa can generate additional export revenue of $70 billion yearly, trade estimates released by the United States (U.S.) government have shown.
At a congressional hearing in Washington DC, American Assistant Trade Representative Florizelle Liser, who disclosed the figures, said trade remains "a critical platform for Africa's economic growth, which is nearly three times the amount of current yearly assistance to Africa from all donors."
He, therefore, asked Africa to raise its current two per cent share of international trade to three per cent.
Economists believe that striking a critical balance between trade volume and diversity of the exports is essential to long-term regional economic development and growth, and Africa is not expected to differ.
It was in order to fuel trade with Africa, that the American government legislated the African Growth Opportunity Act (AGOA), and with several modifications of that law, the purpose, according to the U.S. officials is to "extend preferential treatment to imports from eligible countries that are pursuing market reform measures."
AGOA, which was signed into law as part of the larger Trade and Development Act in 2000 was to help increase both the volume and diversity of U.S. trade with sub-Saharan Africa.
American Congressional Research Service, in a recent analysis of AGOA, indicated that " U.S. imports under AGOA are mostly energy products, but imports to date of other products have grown.
According to the American government figures released by Liser, "two-way trade between the United States and sub-Saharan Africa was $104.6 billion in 2008. This was more than triple the amount in 2001, the first full year of AGOA implementation. Total U.S. trade with sub-Saharan Africa in 2002 under AGOA totalled $23.92 billion, and it has risen each year since then.
Nonetheless, Liser said U.S. recognises that trade with Africa has dropped as a result of the global economic crisis and declining oil and commodity prices.
While she noted that many more African nations were taking advantage of the liberal trade opportunities under AGOA, others are facing significant challenges in their efforts to increase trade.
"We are continuing our efforts to increase the number of AGOA-eligible countries taking advantage of the programme, and we are also trying to address the many supply-side constraints Africans face, and to help them increase the range and quality of products being traded and improve the continent's overall competitiveness," Liser said.
The law also directs the American President to provide technical assistance to AGOA countries via the U.S. Agency for International Development, the Office of the United States Trade Representative, the Overseas Private Investment Corporation, the Export-Import Bank, Foreign Commercial Service and the Trade and Development Agency.
Liser said exports from the continent were concentrated in primary commodities such as petroleum, minerals, cocoa and coffee. She added that "there is little of the manufacturing engine in sub-Saharan Africa that has fuelled economic growth and reduced poverty in other regions of the world."