The Minister of Trade, Industry and Co-operatives, Hon. Amelia Kyambadde has met with the US Ambassador to Uganda, H.E Deborah R. Malac to discuss the progress of the African Growth and Opportunity Act (AGOA) program in Uganda, as Uganda prepares for the AGOA review.
Uganda is due for an annual review of its performance in AGOA. The review is conducted by the U.S to assess the performance of programs in all countries around the world. This review goes to inform on how investments and sanctions can be administered generally.
Uganda is one of the beneficiaries of AGOA, which was first authorized in 2000 providing for duty-free treatment for about 6500 goods from eligible sub-saharan African countries imported into the U.S. The program aims at promoting greater regional integration, encourage adoption of WTO agreements (including the Trade Facilitation agreement) and strengthen Congressional Oversight through additional notification and reporting mechanisms.
Uganda’s performance in AGOA has remained wanting with the exports under AGOA dropping from US$ 3.31 Million in 2010 to US$ 1.15 Million in 2014. The poor performance is due to the limited list of eligible products under AGOA which leaves out many products where Uganda has the potential for comparative and competitive advantage. During the meeting, Hon. Kyambadde requested the US to expand the list of eligible products under the AGOA and include products like sugar, peanuts, dairy, and tobacco.
Uganda has also poorly performed due to the strict rules of origin under AGOA. The current arrangement is that a value addition level of 35% must be attained on products whose inputs are imported from non AGOA countries in order to export them under the AGOA. The threshold of 35% on value addition is very high for an LDC country like Uganda. These rules of origin need to be simplified.
Uganda’s exports to the USA under AGOA include agricultural products, forest products, textiles and apparel, footwear, and minerals and metals.
In the meeting, Hon. Kyambadde called upon US investors to shift from trading to value addition especially in the areas of leather, textiles and developing the storage infrastructure. She said there are some under-tapped and virgin sectors in Uganda which had great potential for investment and could be beneficial to both countries.
Ambassador Malac reiterated her commitment to supporting trade and bring more U.S investments to Uganda, within or outside AGOA, and thus encouraged continuous dialogue to expand on more avenues and opportunities for investment and support by the United States to Uganda.
Amb. Malac extended an invitation to the Ugandan Business Community to the 2nd US-Africa Business Forum due to take place in September this year in New York City, USA. She said this forum could be beneficial for Uganda’s businesses to interface with other business partners from around the world.
Amb. Malac said the U.S has specific criteria in place that serve to advise Governments on ways and procedures to ensure continued involvement in AGOA and gainful benefits and profiting from the programs and projects under AGOA.
She added that US embassy, in conjunction with the EA Trade and Investment Hub, was doing an assessment to find new businesses and new value addition sectors that could be supported under AGOA.
Kyambadde reiterated Uganda’s commitment to improving the doing business environment by enhancing product standardization, developing infrastructure and eliminating non-tariff barriers (NTBs) to support local trade and export to the global market.
The two agreed to continue the convening of the Uganda –American Chamber of Commerce platform which they had initiated so as to address the challenges that are faced by members of the US business community in Uganda. The next engagement will be in September this year.