SA motor industry
makes major inroads
Alan Peat
THE ATTACK on the US last September - which compounded the global economic slowdown - has slowed the growth of African Growth and Opportunity Act (AGOA) exports from the approved countries in the sub-Saharan region to the States.
Data for 2001, released to FTW by the Standard Bank's economics division, indicates that total AGOA exports in the final quarter of 2001 increased by 39%.
This is considerably down on the 82% growth recorded in the second quarter - and shows that AGOA exports were affected by the economic slowdown in the US.
But, although the pace of growth slowed towards year-end, there were no other significant moves in the trade data for the full year.
Nigeria continued to be the largest AGOA exporter to the US followed by Gabon and SA.
At the same time - and explaining Nigeria and Gabon's dominance in the AGOA league - oil was the main beneficiary of duty-free entry to the US under the act.
Energy related products totalled 90% of total AGOA exports; textiles and apparel 5%; transportation equipment 3%; agricultural products 1%; and minerals and metals 1%.
The bulk of those "energy related products" was crude oil from Nigeria, Gabon, the Republic of the Congo, Ghana and Cameroon.
Textiles and apparel is the second largest AGOA beneficiary.
The main players here were Lesotho, with 36% of the total textile exports, Madagascar (26%), Kenya (14%), Mauritius (11%) and SA (9%).
SA, however, was the star of the third largest benefiting product category. In "transportation equipment", almost all of the AGOA exports originated from this country's energetic motor industry.
The fact that trade under AGOA only started in January 2001 makes comparisons and analysis difficult, according to Standard economist, Henry Flint.
"In some cases," he told FTW, "AGOA trade has merely shifted from previous generalised system of preferences (GSP) trade."
Not only that, Flint added, but it is also difficult to determine if individual countries' trade with the US has been enhanced by AGOA or not.
"It is also not certain if trade with the US would have been any different without AGOA," he said. "In fact, total US imports from sub-Saharan Africa declined by 9.3% in 2001. This exceeds the 8.0% and 6.2% decline respectively in US imports from the whole of Africa and the world."
However, trade with some sub-Saharan African countries did increase in 2001, according to Flint's analysis. "And," he said, "there seems to be a relatively strong relationship between these increases and AGOA exports."
With only one year of AGOA trade data available it is difficult to come to any conclusion about the long-term success of the initiative, according to Flint.
However, he added, in the short-term, AGOA has made a significant difference for some smaller countries whose trade with the US rose sharply as a result.
