Faith Nyasuguta
The United States has formally removed Uganda, along with three other African countries, from the list of nations benefiting from the African Growth and Opportunity Act (AGOA).
The move, officially enacted through President Joe Biden’s decree on December 29, signals the end of Uganda’s eligibility to export specific goods to the US duty-free, terminating a trade deal that has been in effect since AGOA’s inception in 2000.
President Biden’s decision, based on his determination that these countries fail to meet the necessary requirements for AGOA benefits, aligns with his earlier intention expressed in October 2023. The primary catalyst for Uganda’s removal stems from its endorsement of an anti-gay law, sparking international concerns regarding human rights violations.
The repercussions of Uganda’s expulsion from AGOA could be severe, potentially resulting in widespread job losses, a dip in foreign exchange earnings, and a reduced utilization of local raw materials.
The agricultural sector, a cornerstone of Uganda’s economy, faces a substantial impact, with over 80 percent of the country’s AGOA exports originating from this domain.
This sector also employs approximately 72 percent of Uganda’s workforce. In the 12 months leading up to June 2023, Uganda exported $8.2 million worth of goods to the US under AGOA, constituting about 11.5 percent of its total exports to the US.
While Uganda’s trade volume with the US is comparably smaller than that of neighboring countries like Kenya, the expulsion from AGOA remains a significant blow to its economic landscape. For instance, Kenya exported $268 million worth of commodities under AGOA in the same period, representing a substantial portion of its total exports to the US.
Despite this setback, there is a glimmer of hope for Uganda’s potential readmission into AGOA if the country demonstrates a sincere commitment to meeting the program’s criteria. This could entail a reconsideration of its anti-gay law, similar to the case of Mauritania, which successfully rejoined AGOA after being suspended in 2018.
Uganda now finds itself in the company of South Sudan, Somalia, and Burundi on the list of countries in the region 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 include Ethiopia, Guinea, Mali, Gabon, Cameroon, Burkina Faso, The Gambia, Central African Republic, Zimbabwe and Sudan.
Although AGOA is slated to expire in December 2025, discussions about its extension are underway, providing a window of opportunity for Uganda’s potential reintegration if the necessary policy adjustments are made.
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