Led by deputy permanent secretary, Gideon Mmolawa, the local delegation is joining senior representatives of other African nations who are pressing for the renewal of the preferential trade deal with the world’s richest nation.
The US capital this week hosts a crunch meeting, featuring ministers and top officials from the governments of both sides, in the last formal engagement before the expiry of the trade agreement next year.
Ahead of the AGOA Forum meeting, the US's President Joe Biden, gave his strongest statement of support for the trade deal’s renewal, calling on lawmakers in his country to quickly reauthorise and modernise the agreement.
“As I’ve said before, America is all in on Africa. “This week—and in the weeks to come—let’s prove it. “And together, let’s ensure future generations of Americans and Africans can meet the challenges and seize the opportunities of the decades ahead,” he said in a statement on Tuesday.
While Biden’s administration is in support of renewing the 24-year old agreement, US lawmakers who actually ‘hold the pen,’ are concerned about poor utilisation of the agreement. Last March, a report by a United States agency found waning utilisation rates within the continent, with Botswana named amongst the countries with the lowest exports under AGOA.
Botswana’s utilisation rate of the trade arrangement fell from 100% to zero in the last decade, echoing, but considerably worse than, many other countries on the continent.
From a peak of P1.8 billion in 2008, AGOA exports by Botswana-based firms have been plummeting, as key exporting sectors such as textiles and garments have struggled with a plethora of issues.
While the US remains a highly lucrative market for local textile players, issues such as scale, capacity, distance, costs, high competition for the American market, and government reluctance to keep extending incentives for local producers, have led to the closure of all AGOA factories.
The falling utilisation rates continent-wide are believed to be weighing heavily on the shape the new AGOA takes, which in turn has delayed the renewal.
Locally, the Trade ministry, working with the US, has revised its AGOA strategy and is placing a focus on supporting the exports of meat and meat products, natural/indigenous products, handicrafts, jewellery, and semi-precious stones.
Last year, KGK Diamonds Botswana, a De Beers’ registered client which boasts the country’s largest jewellery plant, began exports of its finished diamond jewellery products to the US.
Support for a new AGOA is growing amongst US lawmakers, with a bill for renewal being introduced by a group of senators from both the Democratic and the Republican parties in April.
On Tuesday, the New Democrats, a task force made up of Democratic members of the House of Representatives, expressed their support for AGOA’s renewal.
“As we approach the expiration of AGOA in 2025, we risk uncertainty slowing the economic exchange between the US and our African partners,” the New Democrats stated. “It is imperative that we signal our support for the programme and commit to renewing it as quickly as possible. “Africa has changed dramatically since the inception of AGOA, and our trade programme must reflect that transformation to increase economic growth and drive more investment to both Africa and the US.”
While African officials are eager to hammer out a new deal, many are wary of the US adding more requirements to the agreement, particularly around Environmental, Sustainability and Governance standards. An agreement which demands extreme and or rapid “greening” could limit the amount of exports from Africa, some officials have said.
