In a letter dated October 30, 2023, addressed to the Speaker of the House and the President of the Senate, U.S. President Joe Biden conveyed his decision to exclude the Central African Republic (CAR), the Gabonese Republic (Gabon), Niger, and the Republic of Uganda from the African Growth and Opportunity Act (AGOA) scheme. This exclusion, effective January 1, 2024, was based on their severe breaches of internationally recognized human rights, disregard for the rule of law, and lack of commitment to political pluralism, among other matters crucial to U.S. interests.
The article argues that the suspension of the four African countries from AGOA by the United States is influenced not only by domestic socio-economic and political “issues” within the countries but also by broader geopolitical factors, particularly the desire to counter Chinese and Russian influence on the African continent.
While the impacts of the suspension are expected to affect economic ties between the countries and the U.S., the article suggests that the degree of impact may vary from country to country. It emphasizes that the U.S., which is renewing ties with Africa, is likely to, sooner or later, readmit the suspended countries back into AGOA. In the interim, these countries are expected to continue trading with the U.S. under normal conditions and still enjoy the benefits of the Generalized System of Preferences (GSP) scheme.
AGOA
Established during the Clinton administration in 2000, the African Growth and Opportunity Act (AGOA) was designed primarily to create fresh market opportunities, particularly in the textile sector. Its overarching objectives include supporting economic growth in Sub-Saharan African countries, fostering economic and political reforms, and enhancing U.S. economic relations within the region. As of 2024, the United States Trade Representative (USTR) recognizes 32 African nations as eligible for AGOA benefits. Within the framework of AGOA, American importers can enjoy duty-free purchases from benefiting Sub-Saharan African countries across approximately 6,800 tariff lines in the U.S. tariff schedule. Originally slated for an eight-year term, the AGOA was extended from 2008 until 2015. Subsequently, President Obama granted a 10-year extension until 2025. Since the pact is expiring soon, the Biden administration is currently contemplating extending AGOA.
AGOA stands as a cornerstone of U.S. economic policy, expanding upon the Generalized System of Preferences (GSP) instituted in 1974. The GSP aims to stimulate economic development in impoverished nations and territories by waiving duties on a variety of products from eligible countries. Presently, the GSP encompasses 119 designated beneficiary countries and territories. Formulated with three primary objectives, the GSP seeks to foster economic prosperity in developing nations, bolster U.S. employment, maintain the competitiveness of American companies, and propagate American values in the countries and territories that benefit from the program.
On October 2, 2000, President Clinton officially identified 34 countries in Sub-Saharan Africa as recipients of the trade benefits provided by AGOA. Subsequently, additional nations in the region were included in the beneficiary list, with Swaziland joining in January 2001, Cote d'Ivoire in May 2002, and the Gambia and the Democratic Republic of Congo in January 2003, among others. This expansion underscored the evolving nature of AGOA and its commitment to fostering economic opportunities across a growing spectrum of African nations.
It's crucial to recognize that AGOA membership is not a permanent status, and it is at the discretion of the sitting U.S. president to determine which countries remain eligible and which ones are removed from the list. Since its inception, the roster of countries participating in AGOA has seen fluctuations, with nations entering and exiting the program. An illustrative example is the declaration of Eritrea and the Central African Republic as ineligible on January 1, 2004, while Angola gained AGOA eligibility during the same period. Just as adherence to the terms and conditions of the scheme is pivotal for maintaining AGOA membership, countries that have been suspended or removed could potentially be reinstated if they demonstrate progress in areas identified as inconsistent with the AGOA Act.
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Uganda
On January 1, 2024, Uganda was removed from the AGOA list due to "gross violations of internationally recognized human rights." While President Biden's letter does not explicitly outline the nature of these human rights violations, many attribute Uganda's suspension to the enactment of the Anti-Homosexuality Law in May of 2023. This legislation imposes severe penalties on the LGBTQ+ community, including the death penalty for "aggravated homosexuality" and life imprisonment for same-sex marriage. President Biden had previously addressed the issue in a statement issued in May, asserting that the impacts of the law would be considered in the review of Uganda's eligibility for AGOA.
Five months later, the administration concluded its review and decided to suspend Uganda from AGOA, aligning with the commitment made earlier. Additionally, the World Bank also suspended lending to Uganda in response to the same human rights concerns. This collective action demonstrates America’s and the international community's stance on human rights issues and reflects the broader implications such violations can have on economic partnerships and collaborations between the West and those countries. In October 2021, the United States assumed the role of chair of the Human Rights Council (HRC) at the United Nations (U.N.) for a three-year term. President Biden expressed the commitment of the U.S. to serve as "a constructive voice that works to help push the Human Rights Council to live up to its mandate and to protect the values we hold dear for all people." Uganda's violation of human rights is thus not only inconsistent with the core values upheld by the United States but also contradicts America's custodianship of the HRC.
It is noteworthy that Uganda has been under the leadership of President Yoweri Kaguta Museveni since 1986 and has been subject to both domestic and international criticisms. The U.S. government, in particular, has expressed concern about Uganda's human rights record, noting a concerning downward trajectory. In the aftermath of the general elections on January 14, 2021, the U.S. Government took action by imposing visa restrictions on numerous Ugandans. These individuals were identified as having been involved in human rights abuses before, during, and after the elections. The reported abuses included harassment, torture, and detention without trial of opposition leaders and their supporters, ordinary Ugandans, journalists, as well as leaders and activists from civil society organizations. During the 2021 presidential elections in Uganda, Robert Kyagulanyi, widely known as Bobi Wine and the main challenger to President Museveni, was placed under house arrest. The situation escalated to the point where the U.S. Ambassador to Uganda, Natalie Brown, was denied access to the detained opposition leader. This raised concerns about the restriction of political freedoms and the treatment of opposition figures during a critical electoral period. Such actions were criticized both domestically and internationally.
In October 2023, the U.S. Government issued a business advisory for Uganda, cautioning that the investment climate in the country had significantly deteriorated. The advisory cited concerns about endemic corruption and widespread violations of human rights, particularly targeting activists, members of the media, health workers, individuals from minority groups, LGBTQI+ persons, and political opponents.
Uganda is a member of the East African Community (EAC) regional bloc, which, in 2016, collectively encouraged its six member countries (Uganda, Kenya, Tanzania, Rwanda, Burundi, and South Sudan) to prohibit the importation of used apparel, with an aim of safeguarding local textile industries. Among these nations, only Rwanda has fully implemented the ban on secondhand clothing imports, a decision that resulted in its removal from AGOA in 2018 due to pressures from Washington. President Yoweri Museveni of Uganda has consistently expressed the intention to follow suit and potentially ban the importation of used apparel in the country. In the EAC, there is a renewed regional effort to bolster local textile industries and manufacturing.
Indeed, the decision to remove Uganda from AGOA was influenced by various factors, with the Anti-Gay law playing an important role. The legislation, along with other underlying issues, contributed to the determination that Uganda's actions were inconsistent with the values and criteria set forth by AGOA.
Gabon
Gabon is often used as an example of a stable and prosperous country in central Africa due to its vast natural resources, including petroleum, natural gas, diamonds, gold, and timber. Although sparsely populated (2.3 million people as of 2021), Gabon’s GDP per capita is some of the highest in Sub-Saharan Africa (estimated at nearly $9,000 in 2024). In fact, in 2022, the Gabonese national budget registered a 3% surplus.
But then, why is America kicking Gabon out of the AGOA scheme? Is it because Gabon doesn’t deserve the AGOA benefits anymore due to its wealth? Seychelles and Equatorial Guinea graduated from the GSP and so are no longer eligible for AGOA due to their “developed nature,” but not Gabon.
The prolonged dominance of the Bongo family in Gabonese politics, spanning over five decades, is a significant historical context. El Hadj Omar Bongo Ondimba's presidency from 1967 until his death in 2009, followed by his son Ali Bongo Ondimba's tenure until his overthrow in a military coup led by Gen. Brice Oligui Nguema on August 30, 2023, marks a pivotal shift in the country's political landscape.
Since Gen. Oligui was sworn in as the transitional president of Gabon on September 4, 2023, the U.S. Department of State has taken a firm stance against the military takeover. The suspension of most assistance to Gabon by the U.S., as of September 26, underscores the commitment to democratic principles and civilian rule. The United States, in its foreign policy approach, emphasizes that power should reside with the people rather than the military. The failure of the military to return to democratic civilian rule in Gabon led to the expulsion of Gabon from AGOA.
CAR
The Central African Republic has indeed faced significant challenges, marked by instability that can be traced back to its pre-independence era. The power struggles in the CAR have deep historical roots, with the death of independence leader Barthelemy Boganda six months before the country gained independence in 1960 creating conditions for ongoing political strife.
The CAR has witnessed several coups and changes in leadership since its independence. The first coup in 1966 brought Jean-Bedel Bokassa to power, who was later deposed in 1979 through a French-backed coup that installed Francis Bozize as the leader. In 2013, a Seleka Muslim coalition orchestrated a coup that removed Bozize from power, leading to the formation of a predominantly Christian self-defense group known as the anti-Balaka in opposition to the Seleka administration. These events have contributed to the ethnoreligious conflicts and the proliferation of armed rebel groups, resulting in widespread insecurity across the country.
In 2016, Faustin-Archange Touadera, an independent candidate, was elected president, and he secured re-election in 2020. The ongoing challenges in the CAR highlight the complex interplay of historical, political, and ethnic factors that continue to shape the country's trajectory. The presence of armed rebel groups and the persistence of conflicts led to instability and suffering of the ordinary people of CAR, especially women and children. According to Freedom House, CAR was rated as “Not Free” in 2023. This persistent situation, the article argues, has led to the suspension of CAR from AGOA.
Niger
Niger was first thrown out of the AGOA in December 2009, but on October 28, 2011, President Obama determined that Niger, along with Guinea, and Coˆte d’Ivoire, were eligible sub-Saharan African countries for the AGOA and added them to the scheme.
Niger, formerly a French colony, gained independence in 1960. However, the country has faced prolonged political instability characterized by a series of coups. In the aftermath of independence, Niger experienced military rule until the ousting of dictator General Ali Saibou through a coup in 1999, paving the way for President Tandja.
Yet again, political instability resurfaced in February 2010 when military officers staged another coup, leading to the installment of President Issoufou Mahamadou. Issoufou was elected in April 2011 and re-elected in early 2016. However, in February 2021, Mohamed Bazoum became the second democratically elected president of the country. Unfortunately, this democratic period was cut short when, on July 26, 2023, Bazoum was ousted in a military coup, adding to Niger's historical struggles with political transitions and governance.
The political situation in Niger has led to strong reactions from various quarters. The United States expressed “unwavering support” for the ousted leader, Mohamed Bazoum, calling for his immediate release. Similarly, the Economic Community of West African States (ECOWAS) issued a threat to invade Niger if it failed to reinstate Bazoum. However, there were divisions within ECOWAS regarding the use of force against Niger.
The coup leaders remained undeterred by external threats and continued to detain Bazoum. Interestingly, Burkina Faso, Mali, and Guinea—countries ruled by military coup leaders—declared their support for Niger and issued warnings that they would join a war against any external forces intervening in Niger. This paradoxical situation underscores the complexities and divisions within the region, where countries with recent experiences of military coups express solidarity with each other while the broader regional bloc seeks to restore democratic governance in Niger.
Niger's demographic profile, economic challenges, and recent political developments paint a complex picture. The country boasts the world's youngest population, with a median age of 14.8, closely followed by Uganda at 15.7, according to the CIA World Factbook. Despite being endowed with significant natural resources like uranium, coal, cement, and gold, Niger faces substantial poverty, with over 41.8% of the population living in extreme poverty as of 2021, as reported by the World Bank. In 2023, Niger found itself among the top 10 poorest countries globally.
The suspension from AGOA is attributed to the failure to reinstate Mohamed Bazoum to power and the military ruler General Abdourahamane Tchiani's declaration that a return to civilian rule would take three years, with Bazoum remaining in captivity.
Beyond domestic grievances: the geopolitics of AGOA
The other complex reason for the suspension of the three countries is geopolitical. CAR, for instance, has strong military ties with Russia, with the Wagner group deploying at least 1,000 troops in CAR since 2018. At a time when the U.S. rivals Russia and China, and the Wagner group now closely associated with the Kremlin, presents a great risk to America’s influence in CAR. In January 2023, the U.S. Department of the Treasury designated the Waagner group as a “significant transnational criminal organisation” following its “serious criminal activity”, including mass executions, rape, child abductions, and physical abuse in the CAR and Mali.
The activities of the Wagner group extend beyond the CAR to other regions, including Libya, Mali, and Burkina Faso. The group's involvement in various conflict zones has drawn international attention, and its operations have become a subject of geopolitical significance. Following the killing of Wagner Chief Yevgeny Prigozhin and his close aides in August 2023, the Kremlin has taken steps to integrate the paramilitary group into the Russian army.
In August 2023, a Russian delegation led by Deputy Defense Minister Yunus-bek Yevkurov visited Benghazi, Libya, at the invitation of Field Marshal Khalifa Haftar, the leader of the Libyan Arab Armed Forces (LAAF). This visit suggested a potential deepening of security cooperation between Russia and Libya. Furthermore, in September 2023, a Russian military plane visited Burkina Faso and landed in Bangui, CAR, with Russian officials. Analysts speculate that this may have been an official visit by the Kremlin to enhance security cooperation with CAR and other African countries.
The Wagner group's actions have not been without controversy, and the United States attributes the group to the Russian invasion of Ukraine. The group's presence and activities contribute to complex geopolitical dynamics, impacting not only the regions where they operate but also broader international relations. The U.S. is especially working to counter the group’s expansion around the world.
In late 2023, it surfaced that CAR was in talks with a U.S. private security company, Bancroft Global Development, to deploy and fend the rebels off. Although many analysts called it an act of the U.S. government to deploy a “Wagner-like” paramilitary group to counter Russia, the U.S. embassy in CAR, on January 11, 2024, came out to clarify that the State Department was not involved with the private security company nor intended to involve with one. Indeed, in recent years, CAR has equally deepened its security cooperation with African countries. Rwanda, especially, has established a stronger military partnership with Bangui. President Paul Kagame deployed Rwandan forces in the CAR to help "build institutions" in the war-ravaged country. This engagement signifies Rwanda's longstanding commitment to contributing to the “African solutions to African problems” mantra that Paul Kagame preaches.
Finally, these suspended countries, just like any other Sub-Saharan African countries, have built strong ties with China through Beijing’s Belt and Road Initiative (BRI) infrastructure financing project. Uganda, for example, has borrowed heavily from Beijing in recent years, including for the construction of the $567.9 million Isimba Dam project, the US$1.4 billion 600 MW Karuma hydropower station project, $476 million Kampala-Entebbe expressway, among others. At least 15% of Uganda’s external debts in 2020 were owed to China, a surge from only 8% in 2015. According to the Chinese embassy in Uganda, China's direct foreign investment in Uganda reached $131 million in 2022, while bilateral trade amounted to $1.13 billion that same year. In contrast, the U.S. exported and imported $167 million and $174 million worth of goods in the same year, respectively. According to the OECD, between 2000 and 2017, Niger borrowed $703 million from China, and the Chinese oil and gas giant PetroChina owns two-thirds of the Agadem oil fields in Niger. In CAR, the public debt has equally swollen. By the end of 2019, the public debt-to-GDP ratio of the CAR stood at 47.2 percent. For various reasons, CAR was among the six African countries that never borrowed from China between 2000 and 2022. However, CAR has witnessed a surge in investments from Chinese privately owned companies (POEs). According to 2017 research by McKinsey, 90 percent of the estimated 10,000 Chinese-owned companies that operated on the African continent were privately owned anyway. Tien-Pao and HW-Lepo are the two Chinese companies that are largely involved with gold and diamond mining in the CAR. China and Gabon have strong economic relations. Similarly, Gabon has maintained strong economic relations with China. The late Gabonese President Omar Bongo Ondimba visited Beijing multiple times during his tenure, and his successor, Ali Bongo, continued to strengthen ties with China. In 2022, Gabon exported close to $4 billion worth of commodities to China, with crude oil, manganese ores, and sawn wood being the primary exports.
These examples illustrate the growing economic influence of China on the continent through investments, infrastructure projects, and trade partnerships. The BRI has provided a framework for such collaborations, contributing to the evolving economic landscape in Sub-Saharan Africa.
The debate around the real benefits of AGOA has indeed touched on concerns related to China's involvement. Research, such as that conducted by the U.S.-China Economic and Security Review Commission, has raised issues such as the transshipment of goods from China to Africa and, eventually, to the U.S. This phenomenon implies that Chinese firms could potentially be benefiting unfairly from AGOA, taking advantage of preferential trade agreements between the U.S. and African countries.
If such findings hold true, it raises concerns about the intended beneficiaries of AGOA and the potential for unintended consequences. Trade tensions between the U.S. and China could further complicate matters, as AGOA, designed to boost economic development in Africa, might inadvertently provide a route for Chinese manufacturers to access the U.S. market through preferential trade arrangements.
The other argument this article presents suggests that Washington's decision to remove certain countries from AGOA policy, particularly in the context of the Biden Administration's actions, may have been influenced by political motives, specifically in the context of the upcoming re-election bid for President Joe Biden. The article posits that as the U.S. heads to the polls in November, President Biden, facing a low approval rating of just under 40%, may be seeking to assert American superiority on the global stage to win favor with the American public.
The challenges faced by the Biden Administration, including the handling of the COVID-19 pandemic, the withdrawal from Afghanistan, and various conflicts worldwide, have contributed to criticism and backlash. In light of these issues, the argument suggests that the administration is aiming to regain public trust by avoiding potential embarrassments or controversies, such as perceived violations of human rights by countries benefiting from AGOA.
While political considerations are often part of policy decisions, it's important to note that foreign policy and trade decisions typically involve a complex interplay of economic, geopolitical, and diplomatic factors. The re-election bid for any leader, including President Biden, is indeed a significant political context, but a comprehensive analysis would also consider the broader strategic and policy objectives of the administration in the global context.
Uneven benefits
The effectiveness of AGOA has been a subject of debate among scholars and practitioners over the past two decades. While defenders of the AGOA pact point to its role in creating several hundreds of thousands of direct jobs, critics have raised questions about its overall impact. Analyzing AGOA trade data provides insights into the economic relationships between the United States and participating African countries.
In 2022, Uganda's AGOA exports were relatively modest at $12.3 million, with only $1,000 worth of AGOA imports from the Central African Republic and all from Niger. In contrast, Gabon's AGOA exports in the same year reached $126 million, with approximately 90% ($113 million) attributed to energy products.
According to the U.S. Trade Representative (USTR), in 2022, the U.S. exported $96 million worth of goods to Niger and imported about $73 million worth of goods from Niger. For the Central African Republic, the USTR reported $23 million worth of American exports to CAR in 2022, compared to just $881 thousand from CAR in the same year. In the case of Gabon, U.S. goods exports in 2022 amounted to $133 million, while imports from Gabon totaled $220 million in the same period.
A comparison of AGOA trade data between 2022 and 2023 reveals that only Uganda and Gabon appeared on the list of top 20 AGOA exports. This snapshot suggests variations in the economic engagement and trade dynamics between the U.S. and different African countries participating in AGOA, highlighting the diverse outcomes and impacts across the continent.
Source: USTR
According to scholars, the success of certain countries in benefiting the most from AGOA is often attributed to the establishment and effective implementation of an AGOA strategy.
Implications of the suspensions
The suspension of these African countries from AGOA will indeed have implications for broader bilateral trade between these countries and the United States. The event could lead to increased tariffs on exports from these countries to the U.S., resulting in reduced profit margins and making their goods less competitive in the U.S. market.
Taking Uganda as an example, which exports more to the U.S. than to China, the suspension may disrupt the existing trade dynamics. In 2021, Chinese exports to Uganda totaled $1.02 billion worth of goods, while Uganda's exports to China were only $41.2 million. On the other hand, the U.S. exported $148 million to Uganda and imported $89.6 million worth of goods from Uganda in the same year. The suspension could impact Uganda's exports to the U.S., affecting the trade balance and potentially leading to economic challenges.
Beyond the economic impact, the suspension may also affect American consumers, as they may need to find alternative sources of supplies if the supply chain is disrupted.
Additionally, the situation could lead to job losses in the affected sectors. It is not surprising that Uganda's president dispatched a delegation to negotiate with the U.S. Government, highlighting the importance of finding a resolution to mitigate the potential negative consequences on both sides.
The removal of these four African countries from AGOA is argued to benefit America's rivals, especially China and Russia, potentially. The article suggests that this move may create an opportunity for these countries to strengthen their ties with the affected African nations, leading them to drift further eastwards in their geopolitical alignments.
China and Russia have been actively engaging with African countries through initiatives such as the Forum on China-Africa Cooperation (FOCAC) and the Russia-Africa summit. The attendance of African leaders, including those from Uganda and the Central African Republic, at these summits underscores the growing influence of China and Russia on the continent. In the U.N. vote to condemn the Russian invasion of Ukraine in February 2022, except for Niger, all the other three suspended countries abstained.
In response to the challenges posed by China and Russia, the U.S. convened the U.S.-Africa Leaders' Summit in December 2022. During the summit, President Biden emphasized the importance of the success of Africa for the world. The argument presented suggests that instead of decoupling, the Biden Administration should focus on strengthening ties with the African continent to ensure a positive and mutually beneficial relationship.
The United States and Uganda have maintained a strategic relationship over the years, marked by Uganda's significant role in supporting American objectives in the region. One key aspect of this partnership is Uganda's crucial role in the joint effort to combat the al-Shabab militia in Somalia, contributing substantially to regional peace and stability, particularly in the Great Lakes area.
Uganda has been a vital ally and the largest troop contributor to the African Union Mission to Somalia (AMISOM), which was later reconfigured into the African Union Transition Mission in Somalia (ATMIS). In 2022, AMISOM reported a substantial presence of over 5,000 Ugandan troops actively engaged in Somalia. However, recent developments indicate a shift in dynamics, as the U.N. Security Council Resolution 2687 now mandates the withdrawal of all troops from Somalia by the end of the current year.
Conclusion
The suspension from AGOA does not necessarily mean that the affected countries will cease trading with the United States. As highlighted earlier, the trade between the U.S. and the four suspended countries did not heavily rely on AGOA, indicating that companies are willing to continue trading despite potential tariffs.
Moreover, an alternative avenue for trade remains accessible to numerous developing countries, including Uganda, Niger, CAR, and Gabon – the GSP. The GSP provides a framework for eligible countries to export certain products to the U.S. with reduced or eliminated tariffs. While the President has the authority to add or remove countries from both AGOA and GSP, it remains to be seen whether the Biden Administration will remove the four countries from GSP.
There is speculation that the Biden Administration might consider readmitting the suspended countries, at least some of them, back into AGOA in the coming years, possibly after elections. With AGOA set to expire in 2025, there have been recommendations for a 10-year extension by the African Union and ministers from the continent. Senator Chris Coons has even introduced a bill in Congress to extend the pact through 2041.
The periodic review of countries' eligibility for AGOA participation based on criteria such as human rights, rule of law, and economic policies suggests that the outcomes have varied over AGOA's two decades in Africa. The politicization of the AGOA agreement adds another layer of complexity. Whether or not the U.S. reinstates the four countries will have economic and diplomatic implications for both the countries involved and their bilateral relations with the United States.
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