The Korea Times
amn_close.png
amn_bl.png
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
amn_bl.png
Business
  • Tech
  • Bio
  • Companies
  • World Expo 2030
amn_bl.png
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
amn_bl.png
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
amn_bl.png
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
amn_bl.png
Entertainment & Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
amn_bl.png
Sports
  • Hangzhou Asian Games
amn_bl.png
World
  • SCMP
  • Asia
amn_bl.png
Video
  • Korean Storytellers
  • POPKORN
  • Culture
  • People
  • News
amn_bl.png
Photos
  • Photo News
  • Darkroom
amn_NK.png amn_DR.png amn_LK.png amn_LE.png
  • bt_fb_on_2022.svgbt_fb_over_2022.svg
  • bt_twitter_on_2022.svgbt_twitter_over_2022.svg
  • bt_youtube_on_2022.svgbt_youtube_over_2022.svg
  • bt_instagram_on_2022.svgbt_instagram_over_2022.svg
The Korea Times
amn_close.png
amn_bl.png
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
amn_bl.png
Business
  • Tech
  • Bio
  • Companies
  • World Expo 2030
amn_bl.png
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
amn_bl.png
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
amn_bl.png
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
amn_bl.png
Entertainment & Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
amn_bl.png
Sports
  • Hangzhou Asian Games
amn_bl.png
World
  • SCMP
  • Asia
amn_bl.png
Video
  • Korean Storytellers
  • POPKORN
  • Culture
  • People
  • News
amn_bl.png
Photos
  • Photo News
  • Darkroom
amn_NK.png amn_DR.png amn_LK.png amn_LE.png
  • bt_fb_on_2022.svgbt_fb_over_2022.svg
  • bt_twitter_on_2022.svgbt_twitter_over_2022.svg
  • bt_youtube_on_2022.svgbt_youtube_over_2022.svg
  • bt_instagram_on_2022.svgbt_instagram_over_2022.svg
  • Login
  • Register
  • Login
  • Register
  • The Korea Times
  • search
  • all menu
  • Login
  • Subscribe
  • Photos
  • Video
  • World
  • Sports
  • Opinion
  • Entertainment & Art
  • Lifestyle
  • Finance
  • Business
  • National
  • North Korea
  • 1

    Family of 5 found dead in 3 separate locations

  • 3

    All-Korean showdowns set up on 1st day of medal race

  • 5

    Opposition party leader ends 24-day hunger strike for treatment

  • 7

    Exhibition for soldiers highlights North Korea's human rights abuses

  • 9

    Sil-A overcomes stage fright, and them some

  • 11

    Historic NASA asteroid mission set for perilous return

  • 13

    Hangzhou Asian Games open after COVID-enforced delay

  • 15

    Korea looking to hit ground running on 1st day of medal events

  • 17

    Korea's top-ranked Go player wants to capitalize on rare chance

  • 19

    EU does not want to decouple from China but must protect itself: EU trade chief

  • 2

    Xi says he will seriously consider visit to South Korea: official

  • 4

    Understanding Korean Modernization

  • 6

    Bears of Joseon part 1: Fanciful tales and deadly claws

  • 8

    US finalizes national security 'guardrails' for CHIPS funding

  • 10

    PM departs for China for Asian Games, meeting with Xi

  • 12

    Allies vow stern measures against Russia-NK arms deal

  • 14

    Top diplomats of Korea, Iran discuss bilateral ties following frozen funds transfer

  • 16

    League of Legends, other esports join Asian Games in competition for first time

  • 18

    Yoon returns home from New York trip

  • 20

    PHOTOSOpening ceremony of 19th Hangzhou Asian Games

Close scrollclosebutton

Close for 24 hours

Open
  • The Korea Times
  • search
  • all menu
  • Login
  • Subscribe
  • Photos
  • Video
  • World
  • Sports
  • Opinion
  • Entertainment & Art
  • Lifestyle
  • Finance
  • Business
  • National
  • North Korea
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
Mon, September 25, 2023 | 06:03
Guest Column
Key to unlocking Africa's economic potential
Posted : 2022-09-29 14:25
Updated : 2022-09-29 14:25
Print PreviewPrint Preview
Font Size UpFont Size Up
Font Size DownFont Size Down
  • facebook
  • twitter
  • kakaolink
  • whatsapp
  • reddit
  • mailto
  • link

By Landry Signe

WASHINGTON, D.C. ― Africa is on the cusp of an economic transformation. By 2050, consumer and business spending on the continent is expected to reach roughly $16.1 trillion. The coming boom offers tremendous opportunities for global businesses ― especially U.S. companies looking for new markets. But unless African policymakers remove existing barriers to regional trade and investment, the continent's economy will struggle to reach its true potential.

Two major trade agreements ― the African Growth and Opportunity Act (AGOA) and the African Continental Free Trade Area (AfCFTA) ― will make it easier for African countries to trade with one another, and with the United States. Together, the agreements promise to remove longstanding impediments to industrialization.

AGOA, passed by the U.S. Congress in 2000, gives countries in Sub-Saharan Africa preferential trade access, allowing them to export tariff-free products to the U.S. Although it will expire in 2025, U.S. President Joe Biden's Sub-Saharan Africa strategy, unveiled in August, highlights its positive impact and promises to work with Congress on ways to proceed after AGOA lapses.

AfCFTA, on the other hand, is an intra-African trade agreement with no expiration date. Established in 2018, its goal is to deepen trade ties between African countries by removing tariff and non-tariff barriers.

Although these agreements' scope, focus, beneficiaries, and structure differ significantly from each other, they are essential to strengthening African regional integration. Rather than viewing them as separate or competing agreements, policymakers and investors should recognize how they can complement each other in creating, sustaining, and transforming value chains across the continent.

Value creation is critical to Africa's economic transformation. In 2014, manufactured goods accounted for about 41.9 percent of the trade between African countries, compared to 14.8 percent of their exports to the rest of the world. Greater regional integration will provide Africa with a larger supply market, which will accelerate manufacturing specialization and make African producers more competitive globally.

More robust manufacturing industries will provide jobs for low-skilled workers ― particularly those not currently integrated into the formal economy. This, in turn, will increase average household incomes, boost domestic demand, spur innovation and diversification, and help protect local economies against external shocks.

AGOA has already created some opportunities for cross-border value chains. Yet despite some success stories like Madagascar's apparel industry, which relies on an extensive regional supply chain, such opportunities remain limited. While integration has improved since AGOA's implementation, particularly since 2015, it remains somewhat superficial: less than 17% of Africa's commercial value is currently generated through intra-African trade.

The real game changer is the AfCFTA. By removing tariffs for a wide range of products across the continent, it will lower production costs and shift foreign direct investment toward manufactured goods, while also reducing transit costs and shortening supply chains ― major benefits in a globalized economy.

The International Monetary Fund projects that, under the AfCFTA, Africa's expanded goods and labor markets will become more efficient, driving a significant increase in African countries' competitiveness. By creating a true continental market that increases intra-African trade and impels African countries to participate in "production sharing" at a higher rate, the AfCFTA will likely provide a further incentive to U.S.-based multinationals, which will be able to access a larger market and establish a major global hub. AGOA has already spurred many companies to invest in Africa, and the successful implementation of the AfCFTA will strengthen this trend.

The challenge for policymakers is to accelerate this process and ensure that the two programs complement each other. One way to do this is to deepen and broaden communication channels between Africa and the U.S., making it easier for investors interested in doing business in Africa to be better prepared for the expected growth in demand for regionally-sourced products. Supporting individual countries in implementing the AfCFTA would also help streamline the process.

A key problem that remains to be addressed is AGOA's eligibility criteria, which are set on a country-by-country basis. These criteria can be detrimental to regional integration, as one country's removal could affect another country's supply inputs, thereby creating a ripple effect. For example, when Madagascar was removed from the AGOA-eligible list in 2010 following a coup detat, the five African countries from which it had been sourcing apparel inputs were also punished. Considering the broader effect of country-specific sanctions will help prevent unintended investor risk.

Effective regional integration is essential for Africa. Without it, the continent will continue to be overlooked and outpaced globally in manufacturing, information technologies, and agriculture. When considering the future configuration of both AGOA and the AfCFTA, policymakers should regard them as complementary mechanisms for ensuring Africa's long-term economic development.


Landry Signe, a professor and executive director at Thunderbird School of Global Management at Arizona State University in Washington, D.C., is a senior fellow at the Brookings Institution and a distinguished fellow at Stanford University. This article was distributed by Project Syndicate (www.project-syndicate.org).


 
miguel
Top 10 Stories
1Korea, Saudi Arabia celebrate 93rd Saudi National Day, vow stronger cooperation Korea, Saudi Arabia celebrate 93rd Saudi National Day, vow stronger cooperation
2Seoul, Beijing try to mend fences as Russia and N. Korea grow closerSeoul, Beijing try to mend fences as Russia and N. Korea grow closer
3Samsung, SK relieved by revised chip restrictions on China Samsung, SK relieved by revised chip restrictions on China
4Mirae Asset Global Investments' AUM reaches $219 bil. Mirae Asset Global Investments' AUM reaches $219 bil.
5Bears of Joseon part 2: Behind bars Bears of Joseon part 2: Behind bars
6S. Korea to stage massive military parade as tensions with North remain highS. Korea to stage massive military parade as tensions with North remain high
7JTI Korea joins Jongno clean-up JTI Korea joins Jongno clean-up
8Patients, doctors at loggerheads as operating room CCTV footage made mandatoryPatients, doctors at loggerheads as operating room CCTV footage made mandatory
9Lee Jae-myung's possible arrest looms over main opposition party Lee Jae-myung's possible arrest looms over main opposition party
10Low growth becomes new normal for Korean economy Low growth becomes new normal for Korean economy
Top 5 Entertainment News
1[INTERVIEW] Yim Si-wan went extra mile to portray legendary athlete in 'Road to Boston' INTERVIEWYim Si-wan went extra mile to portray legendary athlete in 'Road to Boston'
2TEMPEST gears up to showcase fiery passion TEMPEST gears up to showcase fiery passion
3BLACKPINK's contract renewal still in limbo BLACKPINK's contract renewal still in limbo
4[INTERVIEW] Virtual K-pop group MAVE: is more than just pretty pixels INTERVIEWVirtual K-pop group MAVE: is more than just pretty pixels
5Hebrew University students travel to Korea to explore musical landscape Hebrew University students travel to Korea to explore musical landscape
DARKROOM
  • Turkey-Syria earthquake

    Turkey-Syria earthquake

  • Nepal plane crash

    Nepal plane crash

  • Brazil capital uprising

    Brazil capital uprising

  • Happy New Year 2023

    Happy New Year 2023

  • World Cup 2022 Final - Argentina vs France

    World Cup 2022 Final - Argentina vs France

CEO & Publisher : Oh Young-jin
Digital News Email : webmaster@koreatimes.co.kr
Tel : 02-724-2114
Online newspaper registration No : 서울,아52844
Date of registration : 2020.02.05
Masthead : The Korea Times
Copyright © koreatimes.co.kr. All rights reserved.
  • About Us
  • Introduction
  • History
  • Contact Us
  • Products & Services
  • Subscribe
  • E-paper
  • RSS Service
  • Content Sales
  • Site Map
  • Policy
  • Code of Ethics
  • Ombudsman
  • Privacy Statement
  • Terms of Service
  • Copyright Policy
  • Family Site
  • Hankook Ilbo
  • Dongwha Group