Increases in trade between Africa and the U.S. have been primarily for the import of oil and natural gas, minerals for manufacturing, and forest products (wood, timber). U.S. trade with African countries today still represents only a very small fraction of our total trade with countries in Europe and developing countries in Asia and South America. U.S.-Africa trade needs to improve in ($$$) volume and in the diversity of products and services as was intended in the passing of the U.S. government act AGOA (African Growth and Opportunity Act). Here are a few facts and figures from the 2008 AGOA Report published to the website of the U.S. Trade Representative.
2008 Comprehensive Report on U.S. Trade and Investment Policy for Sub-Saharan Africa (excerpts from pgs. 30-34)
Africa’s Global Trade
Sub-Saharan Africa’s total merchandise imports continued to increase in 2006 (the latest year available), growing 24.3 percent to $214.6 billion, compared to slightly lower growth of 20.5 percent in 2005. South Africa and Nigeria accounted for almost half of sub-Saharan Africa’s total imports with a 45.4 percent share. In 2006, South Africa’s imports increased by 25.4 percent to $68.0 billion, and Nigeria’s imports increased by 20.0 percent to $29.4 billion. Based on a review of some of the major suppliers to sub-Saharan Africa, a range of sectors appear to account for the growth in sub-Saharan Africa’s imports, including electrical and other machinery, refined oil, telecommunications equipment, vehicles, aircraft, iron and steel products, pharmaceutical products, medical equipment, apparel, footwear, ocean tankers, and wheat.
Sub-Saharan Africa’s total merchandise exports were $208.1 billion in 2006, a 17.6 percent increase, although lower than the 27.3 percent increase in 2005. In 2006, South Africa and Nigeria accounted for 50.7 percent of sub-Saharan Africa’s total exports. South Africa’s exports were virtually unchanged at $51.6 billion and Nigeria’s exports grew by 23.8 percent to $53.8 billion.
Sub-Saharan Africa’s 17.6 percent increase in exports outpaced total world export growth, which was 15.3 percent, but lagged slightly behind developing country export growth, which was 20.2 percent. Sub-Saharan Africa accounted for only 1.74 percent of world trade in 2006, slightly higher than its 1.66 percent share in 2005.
Shares of Africa’s Import and Export Markets
Sub-Saharan Africa accounts for slightly more than one percent of U.S. merchandise exports, and slightly more than three percent of U.S. merchandise imports, of which about 81 percent are petroleum products. Similarly, sub-Saharan Africa accounts for a little more than one percent of both EU merchandise exports and imports. The United States is Africa’s largest single country market, purchasing 29.5 percent of the region’s exports in 2006. China came in second at 12.6 percent, and the United Kingdom was third at 6.2 percent. The EU purchased 32.0 percent of sub-Saharan Africa’s exports, down from 34.6 percent in 2005. China increased its share of African exports by almost two percent to 12.6 percent.
• The U.S. market share in sub-Saharan Africa fell slightly in 2006 to 5.6 percent, with $12.1 billion in exports to the region.
• In 2006, China continued to be the largest individual country exporter to sub-Saharan Africa with a growing market share of 8.9 percent and $19.0 billion in exports to the region. China’s exports to the region grew by 41.8 percent in 2006 compared to 2005. Increased shipments of electrical and other machinery, vehicles (mainly motorcycles), woven fabrics, iron and steel products, woven and knit apparel, and footwear comprised the largest share of China’s growth in shipments to sub-Saharan Africa.
• The market share in sub-Saharan Africa of the EU decreased to 29.0 percent.
• South Africa’s share of the African market declined to 3.4 percent from 4.0 percent in 2005. South Africa exported more than Japan, Italy, and Spain to sub-Saharan Africa, with exports to the region of $7.3 billion in 2006, growing by 6.4 percent from 2005.
C. Trade with the United States
U.S. total trade with sub-Saharan Africa (exports plus imports) increased 15 percent in 2007, as both exports and imports grew. U.S. exports increased by 19 percent to $14.4 billion, driven by growth in vehicles and parts, parts for oil field equipment, wheat, non-crude oil, and medical equipment. U.S. imports in 2007 increased by 14 percent to $67.4 billion, mainly due to an increase in crude oil imports. Trade between the United States and sub-Saharan Africa is concentrated, with a small number of African countries accounting for an overwhelming share of the total for both imports and exports.
• Of the top five African destinations for U.S. products, exports to South Africa rose by 24 percent, to Nigeria by 25 percent, to Kenya by 11 percent, and to Gabon by 253 percent (due to a large sale of platforms for offshore oil drilling during the first quarter of 2007). U.S. exports to Angola declined by 17 percent, mainly due to a decline in aircraft sales to the country.
• U.S. imports from the oil producing countries grew in almost every case with imports from Nigeria growing by 18 percent (showing a recovery from earlier in 2007), Angola by seven percent, Gabon by 60 percent, Chad by 12 percent, and Equatorial Guinea by three percent. Imports from the Republic of Congo decreased by slightly less than one percent. U.S. imports from South Africa continued to show strong growth of 21 percent, driven by increased imports across several product groups including platinum, diamonds, ferroalloys, vehicles and parts, catalytic converters, and crude oil.
• In 2007, U.S. imports under AGOA were $51.1 billion, 15 percent more than in 2006. This figure includes duty-free imports from AGOA-eligible countries under both the GSP program and GSP as expanded under AGOA, and textile and apparel items imported duty-free and quota-free under AGOA provisions.
• Petroleum products continued to account for the largest portion of AGOA imports with a 93 percent share of overall AGOA imports. With these fuel products excluded, AGOA imports were $3.4 billion in 2007, increasing by seven percent compared to 2006. AGOA textiles and apparel imports remained unchanged at $1.3 billion, AGOA minerals and metals imports increased by 34 percent to $796.3 million, AGOA transportation equipment rose by 19 percent to $588.5 million, AGOA chemicals and related products increased by eight percent to $308.9 million, and AGOA agricultural product imports fell by 25 percent to $271.5 million.
• In 2007, 34 countries exported products to the United States under AGOA. The top five AGOA beneficiary countries included Angola, Chad, Gabon, Nigeria, and South Africa. However, several countries expanded their AGOA exports including Botswana, Cameroon, Republic of Congo, Democratic Republic of the Congo, Ethiopia, Ghana, Madagascar, Rwanda, and Tanzania. Other leading AGOA beneficiaries included Kenya, Lesotho, Mauritius, Malawi, Namibia, Swaziland, and Uganda. The following are some examples of recent AGOA-related trade and investments that occurred in selected beneficiary countries:
Last summer, 600 producers across Mali, mostly tailors and cloth dyers, produced thousands of handbags made from traditional mud cloth for a large U.S. greeting-card company. The order, which included bags and bead strands for greeting cards, was one of the largest single handicrafts purchases ever made in Mali.
A company in Ghana is supplying home décor items to a number of U.S. companies. Another Ghanaian company negotiated an order for approximately 50,000 beads with a major U.S. importer of bead products. Two companies in Ghana are supplying specialty shea butter products to a U.S.-based fair-trade retail chain. About 120 women in northern Ghana supply the bulk of the shea butter inputs for these companies.
A Senegalese company is exporting processed seafood products to the United States. With more shipments scheduled for this year, the company is expanding its factory size and plans to double its workforce to increase its production of processed seafood.
A company in Uganda is exporting high-end T-shirts made of 100% organic Uganda cotton to the United States under AGOA. The company is vertically-integrated and specializes in the production of organic apparel items.
The floriculture sector in Ethiopia is growing rapidly. According to some estimates, export revenues in this sector have risen by a factor of six in the past five years. Exports to the U.S. for these products, are up considerably, increasing from just $400,000 in 2006 to almost $2 million in 2007.
Two firms in Swaziland have significantly expanded exports of processed agricultural products to the United States. One firm increased its production capacity by over 17 percent and created more than 200 new jobs. The second firm tripled its production and hired over 200 new workers. The firms buy the bulk of their fruit from local growers with the balance imported from Mozambique and South Africa, providing additional employment and expansion regionally in the agriculture sector.
• The U.S. merchandise trade deficit with sub-Saharan Africa continued to widen in 2007 to $53.0 billion, from $47.0 billion in 2006. Nigeria, Angola, South Africa, and the Republic of Congo accounted for 90 percent of the U.S. trade deficit with sub-Saharan Africa in 2007.
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