Business and Technology Reporter in Nairobi, Kenya
Nation Media Group
The United States has officially struck off Uganda and three other African countries as beneficiaries of the African Growth and Opportunity Act (Agoa), effectively ending Kampala’s ability to export certain commodities to the US duty-free.
In a decree dated December 29, President Joe Biden said he had “determined” that the four countries “do not meet the requirements” necessary to allow them to continue benefiting from the trade deal, effecting his earlier stated plans to delist them.
“Accordingly, I have decided to terminate the designations of the Central African Republic, Gabon, Niger, and Uganda as beneficiary sub-Saharan African countries for purposes of section 506A of the Trade Act, effective January 1, 2024,” read the statement by the US President.
In an October 2023 letter to the speaker of the US Congress expressing his intention to remove the four countries from the list of Agoa beneficiaries, Mr Biden said Uganda has “engaged in gross violations of internationally recognised human rights.”
This came after President Yoweri Museveni assented to the anti-gay law passed by the Ugandan lawmakers, which introduced serious repercussions, including life imprisonment or death, for same-sex relations in the country.
Uganda’s expulsion from the deal could destroy thousands of jobs, cause a foreign-exchange earnings drought, and low utilisation of raw materials locally, experts have warned.
Since the establishment of the Agoa legislation in 2000 to allow several African countries to export a number of commodities to the US duty-free, Uganda has been a significant beneficiary of the programme.
In the 12 months to June 2023, Uganda’s exports to the US under Agoa amounted to $8.2 million, about 11.5 percent of its total exports to the US in the same period, which totalled $70.7 million, data from the US Department of Commerce shows.
Over 80 percent of Uganda’s exports under Agoa were from the agricultural sector, which employs about 72 percent of the country’s workforce, indicating that the expulsion could have a significant hit on jobs.
Uganda’s trade with the US is, however, smaller compared with its neighbours Kenya and Tanzania. In the 12 months to June 2023, Nairobi’s exports under Agoa totalled $268 million, representing 47 percent of total exports to the US.
Tanzania exported $47 million worth of commodities under Agoa, about 40 percent of its total exports to the US.
Agoa is set to expire in December 2025, but American leaders, including trade officials, have expressed intention to extend it. Uganda could be readmitted into the programme if it shows commitment to meet the set criteria, which could mean scrapping its anti-gay law.
For example, Mauritania, which was suspended from the list in 2018, has just been returned into the fold.
In the region, Uganda now joins South Sudan, Somalia, and Burundi on the list of countries unable to benefit from the preferential trade agreement with the US. Juba was suspended in 2015 due to the rise of ethnic conflicts.
Other countries in sub-Saharan Africa that have been removed from the list are Ethiopia, Guinea, Mali, Gabon, Cameroon, Burkina Faso, The Gambia, Central African Republic, Zimbabwe and Sudan.
