East Africa exports to the US hit $1bn in the year to September 2018
Saturday December 29 2018
A factory for apparel for export to the US under Agoa at an export processing zone. Rwanda, Uganda, Madagascar, Tanzania and Kenya have developed national Agoa strategies to support critical sectors and items to maximise the duty-free benefits. PHOTO | FILE | NMG
Exports from East African countries to the US reached about $1 billion between October 2017 and September 2018, a 17 per cent increase from the same period the previous year.
The United States Agency for International Development’s East Africa Trade and Investment Hub said apparel dominated the region’s sales at 84.4 per cent of exports.
The Africa Growth and Opportunity Act (Agoa) gives sub-Saharan Africa duty-free access to US markets for about 6,000 items.
The East Africa Trade and Investment Hub said that the firms they supported have increased competitiveness by gathering information on buyer needs, helping to get standards certification, and developing products tailored to consumer preferences.
“To date, USAid Hub trade and investment support has contributed to $4.07 billion in Agoa exports from the region, with $491.5 million from Hub-supported firms,” the Hub said.
Largest exporter
Kenya remained the largest exporter under Agoa in East Africa, at $454.2 million in the period under review, representing an increase of 14 per cent from $399.7 million made in the year to September 2017.
Tanzania experienced a rise of seven per cent to $42.1 million, Uganda had a 49 per cent increase to $3.2 million, and Rwanda went up 49 per cent to $5.8 million.
Ethiopia had the largest increase in exports as the country’s total earnings rose by 62 per cent to $137.3 million in September 2018, from $84.5 million September 2017.
“If this growth continues, Ethiopia may quickly become the second or third largest exporter under Agoa in East Africa. Almost all other countries saw their exports grow with the exception of Mauritius and Burundi,” said the Hub.
Mauritius has seen increased competition since Madagascar regained its Agoa eligibility in 2014. Sales from Mauritius dropped by five per cent to $160.5 million in September 2018, from $168.6 million the same period the previous year.
Burundi is not eligible to trade under Agoa. The country’s exports under the Generalised System of Preferences declined by 36 per cent to $1 million, from $1.7 million in the year to September 2017.
Madagascar’s exports to the US rose by 29 per cent to $181.3 million in the period under review.
The Hub said that countries in the region are making the most of the trade agreement.
Rwanda, Uganda, Madagascar, Tanzania and Kenya have developed national Agoa strategies to support critical sectors and items to maximise the duty-free benefits. Ethiopia is in the process of updating its national strategy.
Products that can enter the US market under the agreement include textiles and apparels, specialty foods, footwear, cut flowers, home décor and fashion accessories.
The Hub advises and trains firms by reducing the cost and risk of doing business through engaging governments with stakeholders.