In Jendayi E. Frazer’s 4-Point Plan to Plunder and Pillage Africa Sophia Tesfamariam writes a devasting indictment of the AGOA program, the African Growth and Opportunity Act. Tesfamariam has also collected and included some of the most searing criticisms made by a variety of people familiar with the program. She shreds all of Frazer’s points, but AGOA gets the most extensive treatment.
Almost 10 years since the introduction of AGOA by the Clinton Administration, oil imports to the US from Nigeria, Angola and Gabon still make up over 94% of Africa´s export to the US under AGOA. So who benefited? As we shall see later, the much touted “success” in the textile sectors were a gross exaggeration and in some cases actually reversed development of these sectors and destroyed nascent industries. Many African economists and analysts had reservations about AGOA and I, as a longtime Africa observer, had strong reservations about it and said so. I was actually happy when Eritrea was unceremoniously removed from the list…it turned out to be a blessing in disguise.
I was not alone in my suspicions of AGOA; here are some of the voices that were just as skeptical and critical of AGOA from the very beginning, voices that were ignored and gagged by the likes of Frazer:
“…African countries are pressured to adopt WTO-like, and even WTO-plus, provisions relating to intellectual property rights protection, investment and financial liberalisation, and labour – all in exchange for some illusory benefits. The AGOA is a US law enacted by the US for the purpose of securing opportunities for US businesses, to the detriment of African economies. It offers no benefits for African economies. The AGOA is a Trojan horse used to trap African governments into giving up their legitimate rights under the WTO…”-(Dakar Manifesto 2001)
“… we reject on principle the “conditionality” approach, which tramples on the sovereignty of African nations and the democratic rights of its people to shape national policy…”-(Letter signed by 35 Africa based NGOs)
“…This is a matter over which we have serious reservations… To us this is not acceptable…”- (Former South African President Nelson Mandela )
AGOA is the “Africa Recolonization Act”-(Congressman Jesse L. Jackson, Jr.)
“…the only groups targeted for assistance are the multinationals who largely control Africa’s trade and access to rich markets…”-(The Association of Concerned African Scholars)
“…To argue that AGOA will be the means by which we can penetrate the US market is a delusion. The main effect of AGOA is to link aid to economic reform, [such as] the dismantling of a states regulatory environment. There are no benefits, and the costs include clear manifestations of deepening structural adjustment and deregulation. AGOA is simply another way of undermining Africa´s ability to mobilize domestic resources for development…”-(Charles Abugre, director of the Integrated Social Development Center in Ghana)
There are several conditions that have to be met to become eligible for AGOA, including one that says that the country has to have a “market-based economy” and has to “eliminate all barriers to US trade and investment”. There is also a provision of AGOA that is not listed amongst the formal conditions for eligibility and is not often mentioned by Frazer and her cohorts. It is the one that says that unlimited duty-free exports of textiles and apparels are allowed only if they are produced with American raw materials. In addition, the President has the authority to suspend duty free apparel if they “cause serious damage, or threat thereof” to the domestic US industry. So Africa, with its unlimited raw materials had to sell in the world market at lower than cost to others who then turn around and sell finished products to Africans who then make the apparel to send to the US. It is actually mind boggling that African leaders actually agreed to do it, essentially destroying their own farmers.
Since Frazer mentioned Lesotho´s textile sector, let us take a look at Lesotho and three other countries, Madagascar, Namibia, and Uganda to appreciate the effects of AGOA on nascent African textile industries.
Imagine my shock when I found out that there were over 50 Taiwanese-owned clothing factories in Lesotho, a very small country (the size of Maryland) that is completely surrounded by South Africa. The way Frazer talks about Lesotho, you are led to believe that the people of Lesotho owned the factories that were producing these AGOA eligible products. The Taiwanese sought to take advantage of AGOA and Lesotho´s proximity to South Africa´s good roads, highways and ports to ship million of jeans, T-shirts and other apparel to American stores such as the GAP, K-Mart, J.C Penney at low cost. As for the thousands of new jobs for women, Frazer forgets to tell her readers that the job migration to the capital was a result of the collapse in rural farming which used to be entirely run by women. The men in Lesotho used to earn a good living by going to mine in South Africa, but they have lost their mining jobs because South Africa stopped importing foreign workers, and decided to use mechanized mining, leaving the men in Lesotho without any livelihood. That is how the women of Lesotho became the breadwinners.
So there was no real increase in overall employment and because only women were being hired at these plants to sew and thread etc. the men were left unemployed and desperate. The situation did not create wealth for the people of Lesotho. Corporate America benefited from cheap labor and transportation costs. As a matter of fact, despite what Frazer wants us to believe about Lesotho, the textile industry in Lesotho was well underway before AGOA ever came into the picture and AGOA may have actually irreversibly stunted its growth and development. The real and serious challenge to Lesotho is what happens to it in 2015 when the initiative ends and Lesotho made products no longer have privilege to enter the United States market.
AGOA was a nightmare for the people of Namibia, they became victims of the predatory transnational corporations like Ramatex Textile & Garment Factory, a Malaysian company moved to Namibia in 2001 to take advantage of AGOA. The plant turned cotton (imported duty free from West Africa) into textiles for the US market. Herbert Jauch, head of research and education for the Labour Resource and Research Institute (LaRRI) in a 26 March 2008 Report stated that:
“…A study carried out by LaRRI in 2003 found widespread abuses of workers rights, including included forced pregnancy tests for women who applied for jobs; non-payment for workers on sick leave; very low wages and no benefits; insufficient health and safety measures; no compensation in case of accidents; abuse by supervisors; and open hostility towards trade unions etc…Ramatex used a significant number of Asian migrant workers, mostly from China, the Philippines and Bangladesh. Although the company claimed that they were brought in as trainers, most of them were employed as mere production workers with basic salaries of around U$ 300 – 400 per month which were higher than their Namibian counterparts…”
In the end, Ramatex, the only beneficiary under AGOA in Namibia, closed its factory leaving hundreds and thousands of Namibians unemployed. Rauch writes:
“…Ramatex represents a typical example of a transnational corporation playing the globalisation game. Its operations in Namibia have been characterised by controversies, unresolved conflicts and tensions…Worst affected were the thousands of young, mostly female workers who had to endure highly exploitative working conditions for years and in the end were literally dumped in the streets without any significant compensation…Ramatex had shown the same disregard for workers when it closed its subsidiary Rhino Garments in Namibia in 2005…”
On 19 November 2007 the Namibian paper quoted President Pohamba as saying:
“…AGOA has not yielded the desired results as far as American investment is concerned despite the incentives provided by African governments to potential investments…”
The story of Tri-Star in Uganda is basically the same story of exploitation and destruction of nascent indigenous industries, plunder of abundant human and material resources and another example of how African governments have squandered the peoples´ resources in order to curry favor with Washington. Lowery Museveni´s Ugandan government promoted Tri-Star in order to cash in on AGOA. During its operation, Tri Star imported fabric from Asia and then made finished clothing products for US markets, even though there is ample cotton in Uganda. Instead of investing Uganda´s resources on establishing milling factories, the Government of Uganda chose instead to do what was the quickest and best option for US importers. The expectations were high. According to a report published by the BBC in 2004:
“…The Tri-Star apparel factory in the Kampala suburb of Bugolobi is bright and clean. Large motivational signs urge staff to build the nation. Banners on the wall read “Made in Uganda, sold in USA”…Tri-Star supplies clothes to a range of US companies…There are more than 2,000 workers at the site, stitching clothes to sell to American companies such as Wal-Mart, JC Penney and Target…”
Judy Auma, a Uganda based Staff Writer for African Executive wrote the following about Tri Star, in a January 2007 article:
“…The factory, which was launched 5 years ago, received high government support and was viewed as an opportunity for Uganda to exploit USA´s tariff and quota free market. Ugandans were made to believe the establishment would not only nurture a rich and stable market for Uganda´s struggling cotton farmers, but also become a reliable source of employment…Since its inception, the factory has neither bought a single bail of Uganda´s local cotton nor exported a stitch from locally produced fabric. Worse still, it has promoted nearly zero growth in terms of employment and the development of the cotton sector…”
The company left the country without repaying any of its debts, leaving behind a destitute workforce and an industry struggling to remain afloat.
What about Madagascar, the other nation that Frazer and company tell us benefited from AGOA? It too has not fared well. A segment of the population, again, only women, may have benefited from its textile sector, but all that is at risk today, not because of anything of their doing but because of political problems in that country that may disqualify Madagascar from the AGOA list. As for AGOA benefiting the Malagasy people, let us take a look at the statistics. A 29 March 2009 Africa Rising report says:
“…the promised AGOA benefits have not translated to a better life for Madagascar´s people. Madagascar ranks at 143 out of 179 countries measured by the United Nations´ Human Development Index Despite its economic progress on paper, the country ranks 164th in terms of gross domestic product per capital…”
Reports surfaced in June 2009 about Washington threatening to pull the plug on Madagascar´s AGOA certification. These reports said:
“…Madagascar could be removed from eligibility for trade preferences under the African Growth and Opportunity Act due to a recent change in government that the U.S. has determined was “undemocratic and contrary to the rule of law… the State Department has classified the change in government as a coup d´etat and is therefore moving to suspend assistance to the government of Madagascar…”
Madagascar is a good example of the US State Departments hypocrisy and duplicity. Everyone knows that Ethiopia is by no means a democratic country and that the minority regime has:
Violated international law and the Eritrea Ethiopia Boundary Commissions´ final and binding delimitation decisions and numerous Security Council resolutions on Eritrea and Ethiopia, it has also violated both the African Union and the United Nations Charters by invading and occupying sovereign Eritrean and Somali territories
Committed international crimes in Somalia including rape, murder and wanton destruction.
Violated and continues to violate the human rights of the Ethiopian people by detaining thousands across the country for voting against the regime in the 2005 elections. Thousands more are being held on trumped up charges, including Birtukan Medeksa, a prominent Ethiopian opposition leader and a judge. It should be noted here that Ethiopia is one of the countries used by the Bush Administration in its extraordinary rendition program where prisoners are taken to places like Ethiopia where in secret CIA run prisons they are interrogated and tortured.
Committed genocides in the Gambela, Ogaden and Oromia regions of Ethiopia. Genocide Watch and other rights groups are seeking a ICC indictment against the regime.
Yet, the US State Department that is threatening to remove Madagascar from the list for violating one of the AGOA conditions today, has refused to take any punitive actions against Meles Zenawi´s regime that has committed even graver crimes.
I am in no way suggesting that Ethiopian textile workers pay for the crimes committed by Meles Zenawi and his regime by having their AGOA status revoked, I am however suggesting that the US State Department, if it wants to salvage its fledgling credibility, can “look the other way” and don´t punish the Malagasy textile sector workers for the “coup” in Madagascar, for which they had no part. By the way, Madagascar may turn out to be the only “success” story on AGOA.
Today, the US State Department´s own Inspector General in his August 2009 agrees with this author and others who were skeptical of AGOA from the get-go. Here is what he said in his scathing Report about Frazer´s Bureau of African Affairs and AGOA:
“…the economic impact of AGOA has been limited even though most of sub-Saharan Africa is now in AGOA… Many African countries have yet to benefit substantially from AGOA preferences. Poorly developed infrastructure, a lack of affordable credit, weak merchandising, and an inability to meet U.S. phytosanitary regulations are among the many factors that thus far have limited the intended trade promotion and diversification effects of AGOA… The bulk of AGOA exports result from petroleum and other extractive industries. When U.S. imports of African petroleum products are excluded, the sum of trade for which AGOA can make some boast for promoting is relatively small…”
Johnnie Carson, the new US Secretary of State for African Affairs ought to take a closer look at AGOA and make realistic and non-parasitic recommendations to the Obama Administration.
Picture above from the Ruaraka slideshow by Pamoja Tunaweza, scroll down to the bottom of this page to view the pictures, and read what people say about being in or near the EPZ.