Agoa And African Underdevelopment, A Critical Analysis of A Major Contradictions

ABSTRACT

The study examines the African Growth and Opportunity Act and African underdevelopment, a critical analysis of major contradictions. The thrust of the research work is to find out if AGOA has spurred the level of investment needed to expand economic activity in the rural agricultural sector. The research work also seeks to examine if AGOA has promoted export diversification with particular reference to the clothing and textile industry and the degree the US trade with SSA countries had gone in reducing poverty in the SSA countries since the AGOA’s drafter’s objectives were for AGOA to serve as a catalyst for African economic development. Utilizing dependency theoretical frame work of analysis, which focus on the socio-economic dynamics of metropolitan and peripheral countries and proponents of the theory argues that the trade relations between the United states and countries in sub-Saharan African is skewed in favor of the former because the developing countries such as sub – Saharan African countries are still dependent on the western imperial western capitalist country though in a subtle way than was in the era of the outright domination of the former. As much as we deemed this theory fit for analyzing the trade relations between the United States and African countries, we did not subscribe to the idea of delinking as a viable option for the economic development of the former because in the world of complex interdependency, delinking is never a viable option for the countries of the SSA and delinking contradicts with the principle of globalism and will amount to autarky. Owing to that, we finished our analysis with the complex inter dependency explanatory tool of analysis which recognizes the possibility of imperialism and unequal rewards in trade and globalization. The study contends that AGOA has not spurred the level of investment needed to expand economic activity in the rural agricultural sector, and that AGOA has not promoted export diversification in the area of clothing and textile industry and that the United States trade relations with sub – Saharan African countries have not led to poverty reduction in the later. Relaying on the secondary source and descriptive analysis for the purpose of data collection and analysis, the study therefore, probe beneath the orbit and bringing to fore, the provisions of the legislation that led to AGOA and the legal framework that resulted and the ensuing economic consequences this portends for African countries. The study contends that AGOA has not achieved its drafter’s original objectives in bringing about economic development in sub-Saharan African due to a number of factors such as: the constraints imposed by the legislative process, dependence on one – dimensional strategy of tariff reduction and the inherent limitation of “Special and Differential Trade Treatment”. The Study also revealed that AGOA restrictive rules of origin for textile and apparel imports, constrained the growth and development of African’s apparel industry. Complex rules of origin create the potential for hidden protectionism because they accompany legitimate trade policy instrument – preferential trading arrangement. Again, it was revealed in the study that the trade relations between the United States and countries in the AGOA have not significantly impacted on the production and export of agricultural products to the production and export of agricultural products to the United States and this is where majority of African countries rely for survival instead the SSA export to the United States is dominated by energy-related products such as petroleum and this sector also account for the United states investment in the region. The study revealed that the introduction of AGOA brought about an increase in the volume of trades between the United States and sub-Saharan Africa. An increase in African countries’ exports to United States was observed following AGOA’s initial passage. However, the increase in trade was not experienced at the same level in all SSA countries and did not affect all goods equally. Trade statistic shows that countries that experienced substantial growth in trade includes Nigeria, Angola, South Africa, and Chad which are oil producing states apart from South Africa. Majority of African countries depend whole lot on Agricultural export but, AGOA as our research work revealed had not significantly impacted on the production and export of agricultural products to the United States market, where these African countries have comparative advantage and thus AGOA has not reduced the poverty in the SSA countries. Again by US investing and facilitating the export of agricultural product, their national interest will not be enhanced, that explains the reason why the trade relations between the US and SSA countries under AGOA have not significantly impacted on the production and export of agricultural products from SSA countries nor has AGOA brought about a reduction of poverty in SSA. The study contends that though globalization and interdependence are inevitable imperatives of the contemporary global political economy, developing countries such as SSA countries should not always expect bilateral or unilateral trade relations with the advanced capitalist states to be a panacea to the economic dilemma confronting them as this does not squared up with the truth most of the times and countries in SSA region should be able to define their own development agenda and not relying on the western capitalist states or institutions to define or spell out economic measures for them because times and experience have shown that most of the western capitalist states have expired in paradigm and must not be seen as bench mark for economic development.