Experts say manufacturers must leverage AGOA to gain global presence

Experts and business leaders say Nigerian manufacturers must begin to take proactive action that will enable them leverage the African Growth and Opportunities Act (AGOA) in order to earn foreign exchange and gain global presence.

AGOA is an agreement between Africa and the United States of America, which enables the former to export 6400 products without paying duty.

Bob Ezumah, export manager, U.S. Agency for International Development (USAID), said Nigerian manufacturers and exporters should begin to export more to earn foreign exchange and take the country out of recession.

Ezumah, who spoke at an annual lecture organised by the Lagos Chamber of Commerce and Industry (LCCI) SME Group last Wednesday, said all they needed to do was to ensure their products were exportable by embracing good packaging, promotion and pricing.

AGOA was signed into law in the US in 2000 and allows African countries to export to the country duty-free till 2025.

In 2014, South Africa exported goods to the US worth $1.2 billion, while Nigeria’s exports were only $2.6 million. This indicates that manufacturers, food processors and other categories of exporters in Africa’s biggest oil producer are yet to take maximum advantage of this opportunity.

“There are so many opportunities that Nigeria companies should take advantage of, which they haven’t been doing over the years. Nigeria didn’t take advantage of the first 15 yrs of AGOA existence, but some others have,” Olabintan Famutimi, president, Nigerian-American Chamber of Commerce, said recently in Lagos.

Experts say Nigeria, which is Africa’s most populous nation, should have been ahead of other countries in tapping into AGOA.

They say the country’s exporters need to scale up their businesses, embracing better packaging methods and understanding the demands of the US in terms of standards.

Manufacturers say they are ready to tap into AGOA, but lamented that the business environment in the country is too harsh for them.

“Many of uur products are not yet competitive,” Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN) told Real Sector Watch.

“Regarding AGOA and other agreements, One major reason why manufacturers are not taking advantage of them is the operating environment. Secondly, we used to have the Export Expansion Grant (EEG) which was cushioning the effect of poor operating environment. But this has been suspended since 2013, meaning we cannot export our finished products. We can only export raw agro products, which is part of the problem,” Jacobs said.

ODINAKA ANUDU