Nigeria and the AGOA Visa
For the past four years, Nigeria has watched as other sub-Saharan African nations reaped the benefits of the Africa Growth Opportunity Act (AGOA) enacted by the United States government to encourage duty free export of African goods into the US. There has been no shortage of explanations for the nation's inability to participate in the trade bonanza. But the most widely canvassed is the non-competitiveness of her industries.
By official estimates, the AGOA scheme permits African nations the export of more than 6,400 items ranging from apparel and textiles to leather materials. The original Act offers tangible incentives for African countries to open up their economies and build free markets. Although the Act has been amended twice since it was first introduced, it was not until a fortnight ago that Nigeria became eligible, having been deemed to have substantially complied with the requirements. Some of those requirements include establishing a market-based economy, the rule of law and political pluralism, elimination of barriers to US trade and investment, noticeable efforts to combat corruption, protection of human rights and workers' rights, and the elimination of child labour practices.
We welcome the extension of the AGOA visa to Nigeria and urge both the public and private sectors to rise to the challenge. To do so, the country must move quickly to improve industrial standards by encouraging local industries to produce goods of competitive quality. It is a fact that Nigeria has comparative advantage on quite a number of the products in the AGOA list.
The emphasis on textile and apparel may be a result of the huge market that exists for the two items in the US market. But emphasis should also be extended to other equally marketable products especially those derivable from leather and cassava of which Nigeria is the world's largest producer.
Diversification is one good way to take maximum advantage of the AGOA scheme. To that end, government has a duty to encourage large-scale production of certain goods over which the country has a comparative export advantage. From all indications, the opportunities offered by the Act are limitless. But only countries with the best range of products can take maximum advantage of them. Given her size and the industry of its people, Nigeria should chalk up a larger income from the AGOA scheme than any other African country.
However, it cannot do so unless it promptly addresses a number of issues that hinder the optimal performance of our local industries. They include high cost of energy and funds, bureaucratic bottlenecks, policy somersaults and poor infrastructure. Unless these obstacles are removed, Nigerian industries may not be able to compete, let alone get a fair share of the benefits offered by the AGOA.
Beyond all this, there is need to align the country with certain specific demands of the Act. The issue of child labour is still there even when it has not been carried right into the industrial and manufacturing sectors. The government should equally tackle the issue of corruption which accounts for much of the widespread poverty in the land. As a recent report of the United Nations Development Organisation (UNIDO) shows, the number of poor in the country is growing, instead of dropping as is the case in most countries.
While the admission of Nigeria into the AGOA scheme is an indication of general improvement in the conduct of government business, there is still so much room left to bring the country to global standards. In that circumstance, how much benefit Nigeria derives from the scheme will be dependent largely on how quickly it puts its industrial house in order. This is the challenge of the AGOA visa.
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