Speech by Amb Amina Mohamed, Cabinet Secretary for Foreign Affairs During the 15th AGOA Forum in Washington DC

SPEECH BY AMB. (DR.) AMINA MOHAMED, EGH, CAV, CABINET SECRETARY FOR FOREIGN AFFAIRS OF THE REPUBLIC OF KENYA DURING THE 15TH AGOA FORUM, WASHINGTON D.C., USA, SEPTEMBER 22-26, 2016

Ambassador Michael Froman, U.S. Trade Representative,

Fellow Colleagues, Honorable Ministers from AGOA Beneficiary Countries,

Excellencies Ambassadors,

Heads of Delegation,

Distinguished Participants,

Ladies and Gentlemen,

I thank my Co-chair, Ambassador Michael Froman, and all of you Honorable Ministers, for giving me this opportunity to moderate this very important session on ‘AGOA: Taking stock of where we are and looking forward.’

Since its inception, AGOA has been the cornerstone of US and Sub-Saharan Africa trade and economic partnership. We have nurtured this partnership together over the last 16 years; a period in which we have achieved tremendous progress in promoting trade and investment between the US and Sub-Saharan Africa.

Combined two-way trade between the United States and AGOA-eligible Sub-Saharan African countries has doubled between 2001 and 2014. As will be recalled, peak trade flows were recorded in 2008, valued at almost $100 billion, before dipping following the global financial crisis.  In 2014, two-way trade was worth $50 billion, with AGOA eligible countries recording a trade surplus with the United States.

Last year, total Sub-Saharan exports to the US amounted to about 19 billion US Dollars against imports of 18 billion US dollars. Additionally, overall U.S. investment in Sub-Saharan Africa stood at 34.4 US billion dollars in 2014, a substantial increase compared to 9 billion dollars in 2001.

While this is commendable progress, a great deal more can be accomplished moving forward. This becomes clearer when we consider that the total share of Sub-Saharan exports to the US market was only 0.8% in 2015. Moreover, the $50 billion worth of combined two-way goods trade for 2014 between UUS and AGOA eligible countries compares with $61 billion for 2013 and $66 billion for 2012. I believe this is a good opportunity to interrogate this trend with a view to growing our trade relations moving forward.

Excellencies,

Ladies and Gentlemen,

A lot has been done to address the challenges facing Sub-Saharan Africa countries in accessing the US market. Most notable efforts in this direction include the USAID-led capacity building and technical assistance that has been targeted at addressing supply side constraints and productive capacities. At the same time, bold trade and investment reforms as well as investments in infrastructure and energy have been undertaken at the national level to enhance trade facilitation and reduce the cost of doing business.

Furthermore, National Response Strategies have today become an important implementation tool and are now being widely employed by beneficiary countries to put in place specific and targeted action plans for effective utilization of AGOA. The East African Community, for example, has developed a regional AGOA strategy which is now earmarked for implementation.  Cumulatively, these efforts have enabled the private sector to play a more active role in taking advantage of AGOA.

The ten year renewal of AGOA by the US Congress has revitalized the collective will to fully utilize the opportunities created by AGOA.  This is the longest ever extension and provides the certainty Sub-Saharan Africa producers as well as U.S. investors need to make investment plans. The extension has also availed ample lead time for investors to recoup their investments and consolidate the gains made so far. We need to double our efforts to make the best of the extension in light of existing and unfolding global dynamics. The suitability of the theme of this year’s AGOA Forum “Maximizing AGOA now to prepare for the future beyond AGOA,’ cannot therefore be overstated.

Distinguished Participants,

As we undertake an assessment of AGOA achievements and take stock of where we are, it is important that we identify the building blocks that will transcend beyond the expiry of AGOA. The 2015 AGOA Act provides for enhanced eligibility obligations for beneficiary countries covering a broad range of policy issues. Key areas of focus include the requirement to implement our commitments in the WTO Trade Facilitation Agreement, suspension or termination of AGOA, Out of Cycle Reviews and the intention to negotiate reciprocal trade agreements. We should have an open dialogue on these issues and agree on a mechanism of resolving attendant challenges in order to avoid trade disruption or other repercussions.

On this note, therefore, I want to emphasize that it is in our interest to ensure that the AGOA initiative realizes the intended objectives of deepening and expanding trade and investment between the two regions. We must take effective steps to address the challenges that impede our ability to exploit the huge market access offered by AGOA. In this respect, our focus for the next few years should be on implementation of the national response strategies as well as enhanced capacity building to ensure full utilization of AGOA.

It is my view that in the lead up to the expiry of AGOA in 2025, we need a frank and open discussion on our expectations. In particular, we need candid discussions on how to translate the current partnership into a permanent and sustainable framework that reflects emerging global developments and safeguards the existing market access and investments under AGOA. Our consultations should also take into account the ongoing initiatives of deepening regional integration in Africa and how the AGOA partnership with the US can support and benefit from these noble initiatives.

Excellencies, Ladies and Gentlemen,

We are expanding our markets and opportunities and minimizing our risks, and in some cases de-risking completely. We are addressing our challenges head on, building our capacities and understanding our situation much better.

We need partners that also understand Africa, that are ready to work and prosper with us. There is no doubt in my mind that with the right partners the potential is immense. The growth we have seen so far is only a glimpse of what is possible.

Thank you Michael Froman for laying the options bare for us to see and to study. This is part of a larger conversation that we must have with African Governments, with our private sector, with our farmers, with our civil society and in fact, with societies at large.

That we must take this partnership to a higher, more stable, more predictable level is not the question. The question will always be what formula we use and how to make the relationship equitable.

We have good lead time and it is a fact, ladies and gentlemen, that to be fore warned is to be fore armed and therefore we must get down to work and come up with a blueprint that is customized to and for Africa.

I wish you every success in your deliberations and thank you again for this opportunity to share my thoughts.

With these remarks, I once again thank my co-chair and now open the floor for your inputs and comments on this agenda item.

Thank you