Analysis
AGOA: ‘Shamed’ Uganda reaps USD 54,000 where Kenya reaped USD 321m
Kenya makes 600 times more money from AGOA than Uganda
United States Envoy Deborah Malac
The Ugandan government and relevant private sector agencies and players are doing too little to tap the opportunities in exporting to the United States under the tax and quota-free African Growth and Opportunities Act (AGOA).
This is the assessment of the US embassy officials as well as some private players who are already reaping the benefits of the preferential trade deal.
According to data from the US Department of Commerce (agoa.info/profiles/uganda.html), Uganda earned a pitiful US$54, 000 dollars from exporting to the vast US market under AGOA. This is a miserable figure compared to the benefits reaped by our neighbours Kenya who earned 321million US dollars under the same arrangement. Tanzania earned 12.5million US dollars while Rwanda earned 86,000 US dollars.
Ambassador Deborah Malac said: “We understand that many people think that AGOA is a bad deal for Uganda; That its provisions are too strict, that not enough products are eligible for its benefit and that the US does do enough for Uganda firms to take advantage of AGOA.
Malac said: “With more than 6000 products eligible for duty free entry into the US under AGOA, Ugandan exporters have significant room to grow and profit. The truth is that AGOA is an important tool for Ugandan companies just as it is a vital tool to help Uganda achieve its goal of becoming a middle-income country.”
Ambassador Malac used the press briefing to highlight the US’s contribution in supporting the government and Ugandan firms to take advantage of the trade opportunity through country-wide workshops and targeted initiatives made by the East Africa Trade and Investment Hub, which is supported by the USAID.
She however diplomatically avoided levelling blame on officials in the ministries of trade and specifically the AGOA office for failing to disseminate the information to the wider business community on how they can participate in the programme.
She dismissed claims that AGOA’s standards are too high to be met by a country at Uganda’s level of development, not that much poorer countries are taking better advantage of AGOA compared to Uganda.
She noted however that the US remains interested in continuing to provide the opportunity for Uganda, even though concerns have been raised about Uganda’s worrying trends in human rights observance and the rule of law. The US recently raised a red flag on the Police’s conduct warning that Uganda could be struck off the list of AGOA beneficiary countries for violating conditions under the AGOA eligibility terms.
Malac noted that now that the AGOA has been extended until 2025, Ugandan businesses need to wake up and take advantage of the trade deal.
Lillian Semigga, a sales manager for Uganda Crafts, one of the firms exporting crafts to the US market, said that those manning the AGOA office under the President’s office are sleeping on their job.
“They are supposed to reach out to the private sector and promote the available opportunities under AGOA but they are not doing so,” Semigga actually accused managers in that office of diverting travel opportunities during the annual AGOA forum to send family and friends to the event where private sector players would have had the opportunity to meet potential importers from the US.
Agness Netunze is one Ugandan who has taken advantage of AGOA opportunities by making handbags and shoes as shown below
Handbags and shoes made by Netunze above
Uganda’s poor performance under AGOA remains a huge embarrassment for the country that has spent lots of money and energy seeking to find better market access in developed countries as part of its desperate attempt to transform the country from an exporter of agricultural raw materials to one of finished goods.
Margaret Waithaka from the East Africa Trade and Investment Hub pointed out that Uganda has great potential in exporting a range of items such as crafts, home decoration items, clothing and apparels as well as specialised foods.
Ambassador Malac pointed to ongoing efforts to development an AGOA strategy for Uganda as one of the measures currently being pursued to help local businesses find niches in the highly competitive US market. Kenya and Tanzania already have such strategies.
Started in 2002 by the then US president Bill Clinton, AGOA was seen as a wonderful opportunity for poor countries like Uganda to finally break into the sophisticated and rich American market.
In fact the government invested millions of tax payers money to support private businesses including Tri-Star Apparel from Sri Lanka to set up a cloth making factory.
The company hired more than 1,400 women from rural areas to do tailoring work at the factory at the former premises of Coffee Marketing Board in Bugoloobi. The company folded a few years following strikes by the women who complained of measly pay. They were being paid Ushs75,000 a month each at the time.
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