US-Africa Summit: US to incorporate AGOA into new strategic partnership
Nairobi, Kenya (PANA) – The United States will incorporate the African Growth and Opportunities Act (AGOA) into a new strategic partnership which it plans to reach with various African countries when President Joe Biden holds a Summit with continental leaders.
Ahead of a major Summit with African leaders set for 13-15 December in Washington D.C., the US President, who has shown a major preference for the African continent since taking office by sending senior administration officials to various African capitals, is considering the inclusion of AGOA into a strategic partnership agreement instead of its expansion beyond the 2025 deadline.
The US Ambassador to Kenya Margaret (Meg) Whitman, said the US-Africa Summit, the first such Summit since 2014, would gather delegations of between 15-25 delegates each from each of the 49 countries invited to participate at the Summit.
“It is a well-attended Summit. We hope the African leaders would find it useful because of the economic development discussions we plan to have during the course of the Summit,” Ambassador Whitman told PANA in an interview on Monday.
Speaking after witnessing the opening of a retail distribution centre and logistical hub for a Kenyan electronic commerce company, Twiga, the Ambassador said the opening of the American market to goods from Kenya made the US the biggest export destination for Kenya.
Twiga Foods is a technology startup which works through a mobile application app to serve 140,000 retail stores with supplies sourced directly from farmers.
Through its "Soko Yetu" mobile application, an Electronic Commerce platform which enables agro processing factories and large-scale fresh produce farmers to connect directly with customers, Twiga Foods moves at least 6 tonnes of produce daily out of its newly-built distribution centre in Ruiru, Kiambu County in the outskirts of Nairobi.
Twiga has attracted American financial technology investors and more American companies, including United Airlines, plan market entry to Kenya within the coming weeks.
United Airlines has set up a local call centre in Kenya to aid its plans to enter the local aviation market.
The contribution of such American companies has had a major impact on the trade services.
According to the US Congressional Research Service, the main US exports to Kenya in 2021 were aviation equipment and aircraft parts, wheat exports, machinery and plastics.
Kenya also exported goods worth Ksh59 billion compared to Ksh89 billion that the United States exported to the East African nation.
For decades, Uganda has been Kenya's largest export destination accounting for 56% of all exports followed by the United Kingdom and the European Union, which took in 25%.
The US Ambassador said the US had climbed to become the largest export market after overtaking Uganda due to the export window available through AGOA.
“AGOA has been beneficial to Kenya. We are incorporating AGOA into a strategic partnership agreement,” Ambassador Whitman said when asked about the possibility of reaching a bilateral free trade agreement with Kenya during the next few months.
Former US President Donald Trump opened discussions with the Kenyan government on the possibility of reaching a bilateral free trade agreement which would act as a model for discussion between the US and other countries in Africa.
However, the African Union has repeatedly called on countries to shun bilateral trade agreements in favour of multilateral trade agreements, where many countries would benefit instead of each country benefiting.
Besides, there were concerns about the Kenyan-US free trade agreement making it much more difficult for other countries to enjoy similar arrangements under the current African Continental Free Trade Area (ACFTA).
Moreover, the discussions on the possibility of expanding the AGOA beyond the 2025 deadline is less exciting to US companies and investors planning to expand their corporate footprint in Africa.
Ambassador Whitman said Kenya had great investment opportunities for new entrepreneurs.
“Kenya is well-positioned in the financial technology sector but it has not yet developed its electronic commerce market which is much different from many markets. Usually, financial technology (fintech) is well developed before e-commerce takes off but it is the other way round,” said the US Ambassador, who previously worked as the CEO of Hewlett Packard, a global computing giant.
-0- PANA AO/MA 29Nov2022
