Restructuring the AGOA Partnership: Lessons from China

by Admin (Posted on January 11, 2024)

By Shemei Ndawula

I’m I a little late to the party? It seems all the experts have already weighed in on the recent move by the Biden administration to exclude Uganda from the African Growth Opportunities Act (AGOA) platform. Just last week the inevitable happened with Uganda being struck of the list of AGOA participating nations. AGOA  is a trade preference program that grants duty-free access to the US market for eligible sub-Saharan African countries. It was enacted in 2000 and has been extended several times, most recently until 2025.

This platform is supposed to promote economic growth, development, and integration in Africa by encouraging exports, investment, and good governance. However, after more than two decades of implementation, AGOA has in many ways failed to deliver on its promises and becomes increasingly irrelevant and ineffective in the face of new global challenges and opportunities.

I believe AGOA, like most United States backed interventions in the region often marketed as “silver bullets to Africa’s problems” has always had its limitations. Like most of these projects it often comes down to taking money from the poor people of a rich country and giving it to the rich people of a poor country. On top of which there’s often so many explicit and implicit strings attached that sometimes the line between diplomatic aid and diplomatic coercion become a little blurred.

Despite Uganda getting large sums of foreign aid from the United States every year, there’s little that the ordinary Ugandan can show of the impact. Uganda is or has been one of the biggest beneficiaries of United States aid programs being the 13^th largest “earner” of US foreign aid on the continent. However, a casual walk through Kampala will show a glaring disparity between these figures and the reality of an average Ugandan. It is high time that the Biden administration rethinks its aid policy especially within the region.

I really wonder why more development partners are not looking into adopting a more Chinese-like approach to bilateral aid which could offer greater incentives and support for African countries to engage in trade and investment.

It has been argued by several international observers that AGOA has failed to properly utilize investments, with only 18 of the participant countries developing national strategies on how to benefit from the program. This disparity reflects the complacency most countries have cultivated white such programs.

Meanwhile the Chinese approach to foreign trade especially with Uganda focuses on targeted investments and infrastructure development to drive economic growth. These aid projects, specifically in the infrastructure sector have got a much wider trickle down effect in the national economy.

I dare say that in the slightly over two years, the Chinese constructed Entebbe Expressway has been open to the public has directly benefited more Ugandans than the over two decades of the AGOA initiative.

The Chinese-like approach to foreign aid also focuses on fostering economic growth and development without imposing strict governance requirements. It seems counterintuitive to use an economic platform to address governance disparities between two countries.

There is need to  focus on strengthening regional institutions and promoting cooperation among African nations to create a more integrated and prosperous continent which is a vine of great opportunity the AGOA partnership should have tapped in.

To restructure the AGOA partnership along the lines of the effective Chinese foreign policy model, the United States should consider the following steps:

Reevaluate the current AGOA criteria and reduce the emphasis on frivolous governance requirements allowing African countries to focus on economic growth and development. Certainly as a diverse continent, each country has a rich history of governance modules which are better suited for our governance than anything else that’s being imported.

It would also be ideal to make investments in value-added manufacturing and industrialisation to help African countries diversify their economies and create more sustainable jobs.This way, we will certainly have more to bring to the table when it comes to trade. The Chinese are already doing this with early success in the industrial parks of Kapeeka and Mbale where they have set up  and operate.

Promote regional integration and strengthen regional institutions to foster cooperation and development among African nations. The AGOA  platform should also explore  targeted incentives and support to encourage African countries to effectively utilize the benefits of the AGOA partnership and develop national strategies for economic growth.

Our generation is fortunate enough to stand as witnesses to the crumbling of the old world order, The People’s Republic of China has been ahead of this curve with the Belt and Road Initiative as well as the South-South Cooperation and if other nations and economic aid platforms would like to have a similar impact on Africa, they may have to study and integrate these strategies within their own development strategies to achieve better results.

The writer is a research fellow at Sino-Uganda Research Centre.

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