By Our Reporter,
Uganda has lost its position in trading in African Growth and Opportunity Act (Agoa), blocking her opportunities for exporting commodities to the US duty-free market.
Uganda was removed alongside three other African countries namely Central African Republic, Gabon and Nigeria over alleged gross abuse of fundamental international human rights.
In a decree dated December 29, President Joe Biden said he had “determined” that the four countries “do not meet the requirements” necessary to allow them to continue benefiting from the trade deal, effecting his earlier stated plans to delist them.
“Accordingly, I have decided to terminate the designations of the Central African Republic, Gabon, Niger, and Uganda as beneficiary sub-Saharan African countries for purposes of section 506A of the Trade Act, effective January 1, 2024,” read the statement by the US President.
In an October 2023 letter to the speaker of the US Congress expressing his intention to remove the four countries from the list of Agoa beneficiaries, Mr Biden said Uganda has “engaged in gross violations of internationally recognised human rights.”
The Ugandan government however, has insisted that the expulsion is targeting to weaken the country’s economy due to the controversial Anti-Homosexuality law.
In May 2023, President Yoweri Museveni assented to the anti-gay law passed by the unanimously Ugandan parliament, which introduced among other penalties life imprisonment or death, for same-sex relations in the country. The law has caused controversies against the country and its citizens with world biggest financial lenders and donor states and institutions cutting off aid to the East African country.
Experts say the expulsion could render thousands of Ugandans unemployed, cause a foreign-exchange earnings drought, and low utilisation of raw materials locally. Museveni’s government however, is on record for having boasted of local and regional markets besides US.
Since the establishment of the Agoa legislation in 2000 to allow several African countries to export a number of commodities to the US duty-free, Uganda has been a significant beneficiary of the programme.
In the 12 months to June 2023, Uganda’s exports to the US under Agoa amounted to $8.2 million, about 11.5 percent of its total exports to the US in the same period, which totalled $70.7 million, data from the US Department of Commerce shows.
Over 80 percent of Uganda’s exports under Agoa were from the agricultural sector, which employs about 72 percent of the country’s workforce, indicating that the expulsion could have a significant hit on jobs.
Uganda’s trade with the US is, however, smaller compared with its neighbours Kenya and Tanzania. In the 12 months to June 2023, Nairobi’s exports under Agoa totalled $268 million, representing 47 percent of total exports to the US.
Tanzania exported $47 million worth of commodities under Agoa, about 40 percent of its total exports to the US.
Agoa is set to expire in December 2025, but American leaders, including trade officials, have expressed intention to extend it. Uganda could be readmitted into the programme if it shows commitment to meet the set criteria, which could mean scrapping its anti-gay law.
For example, Mauritania, which was suspended from the list in 2018, has just been returned into the fold.
In the region, Uganda now joins South Sudan, Somalia, and Burundi on the list of countries unable to benefit from the preferential trade agreement with the US. Juba was suspended in 2015 due to the rise of ethnic conflicts.
Other countries in sub-Saharan Africa that have been removed from the list are Ethiopia, Guinea, Mali, Gabon, Cameroon, Burkina Faso, The Gambia, Central African Republic, Zimbabwe and Sudan.
