9 April 2018

Nigeria: Why 10-Year AGOA Trade Deal Didn't Benefit Nigeria

While various data have shown Nigeria's poor participation and benefit from the extended trade deal, African Growth and Opportunity Act (AGOA), by the United States, the Federal Government has said efforts are underway to improve the nation's response in benefitting from the deal.

AGOA is a unilateral trade preference programme that aims at increasing U.S. trade and investment with Sub-Sahara African countries.

According to data from the United States department for Economic and Regional Affairs, Nigeria accounted for a paltry volume of $9 million out of $2.7 billion agricultural exports recorded by the continent to the United States in 2017.

Specifically, State Department's Acting Director, Harry Sullivan, noted that an increasing number of countries took advantage of the benefits available under the legislation, adding that the low volume recorded in non-oil export was as a result of dependence on oil.

To improve the nation's participation in the programme, the Deputy Director, Trade Department, Ministry of Industry, Trade and Investment, Aliyu Abubakar, told the News Agency of Nigeria (NAN) in Abuja, yesterday that a draft strategy had been developed to ensure that the country benefits from the Act.

He said that the country in collaboration with the United Nations Commission for Africa (UNECA) had developed the national AGOA response strategy validated by stakeholders.

He added that the way forward would be to fast track the Land Use Act to support agricultural activities and strategies to remove administrative and logistic constraint being faced by farmers and exporters.

According to him, the ministry has developed a draft strategy with the objectives of promoting Nigerian participation with a view to benefitting from AGOA.

Abubakar said that as part of effort to reinvigorate AGOA implementation process in Nigeria, the ministry after due consultations with the relevant AGOA stakeholders had identified focal products for Nigeria to maximise its benefits within the shortest time.

He listed the challenges that hinder the realisation of the Act to include lack of sanitary and phytosanitary requirements, problem of labeling, packaging and quality.

Others are lack of product specific standard, supply-side constraints such as inability to meet up with large volume of orders from the U.S. and weak competitiveness as a result of weak infrastructure facilities and lack of finance.

On his part, the Executive Director and Chief Executive Officer of the Nigerian Export Promotion Council (NEPC), Olusegun Awolowo stated that the Council has also been pursuing an AGOA strategy that involves empowering actors in the value chain as well as improving participation from non-oil exporters.

The President, National Association of Nigerian Traders (NANTS), Ken Ukaoha said the country was yet to fulfill the requirement in terms of value addition which was the raw material required.

The Chairman, AGOA Civil Society Organisation Network, Fred Oladeinde, said that Nigeria's exports to the United States under AGOA, plummeted between 2008 and 2016 due to weak demand for Nigerian crude oil imports.

Oladeinde said that there was an urgent need for export diversification to increase Nigeria's exports to the U.S.


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