AGOA: What’s All The Excitement About?
So, I guess everyone’s getting excited about this AGOA conference and I’m just trying to figure out why. In preparation for this post, I went to the AGOA site and tried to read what it was all about, but was forced to stop mid-stream when I realized that my eyes were about to pop out of their sockets. 
Like seriously, who’s going to read that shit? Is that what you have to do (i.e. read piles of bureaucratic mish-mash) if all you want to do is sell your string beans from Karatina in Iowa? It’s not even worth it.
Then of course, I started wondering why Africa even needs AGOA. In this global economy where everything is inter-connected and readily available, if you have a product that is in demand and if you can produce or sell that product for the right price, you should be able to find buyers for it, AGOA or no AGOA. This is what has happened to African countries that produce oil. Since there is demand for that commodity they are able to sell it to whoever wants it (The Indians, the Chinese, the Europeans, etc, etc) — they don’t need AGOA.
Then I started thinking about the freelancers I’ve hired over the years. When I go to look for a freelancer, I honestly could care less what part of the world they live in. The only thing I’m interested in is whether or not they can do the work and whether they can do it at the right price. If the answer is yes, then the work is theirs. Whether there is AGOA, POMOA, LAHOYA….I really don’t care. Their ability to get work & make money is not determined or altered by government middle-men. It is pure capitalism, left alone to operate as it does.
So, maybe Africans should stop waiting for treaties like AGOA (which have not and will not do much for them) and maybe they should learn from the Chinese. i.e. figure out where the demand for goods or products is, learn how to make them more cheaply than anyone else and if you can do that, the forces of capitalism will take over from there.
I must say, dealing with freelancers has really brought home to me just what is fueling this global economy and it’s not governments and all of their bureaucratic mish-mash rules.
You have to provide goods or services that people want and you have to do it at the right price and if you do that, people will find you and they will buy from you. End of story.
Ke,
America Growth and Opportunity Act is a very important piece of legislation for sub saharan countries since they face unfair platform with many countries in many parts of the world e.g prior free trade agreements with other western countries, lack of knowledge base to pursue and sustain certain industries.
I believe the idea is to be able make these countries preferred destinations for FDI and also to spur export led growth which is vital for any country job creation pursuits i.e The United States will buy from these countries first to promote a particular sector in these countries. By doing this they promote the relations with these countries as well and inject the much needed policy and ethics that are required in pursuing such industry in the developed world.
If you think, something like the textile industry at some point in Kenya almost all international textile contracts closed because of lack of penetration in international market and south american and asian contries bidding lower for the same contracts. This happened over and over again and ended affecting the whole industry.
I’m surprised you say that such initiatives are not important with the number of jobs its created and the exports increase it has spurred. The sweat shops in China cannot be compared to the ones in Kenya since they people there make quality products for way much cheaper, the Chinese have also secured their own forms of agreements with the United States. Africans are not waiting for trade agreements, Africans just need a fair platform that’s all.
Many countries in the west have signed free trade agreements with the United States and this in itself made sub saharan countries left out.
For those in the dark about this issue, please read this…
http://www.america.gov/st/wash.....79138.html
Interesting comment I saw that someone called “siasabora” left on a video about the AGOA forum.
Comment follows:
“actually Chinese and Indians merchants in conjunction with local business mafias have set biz camps in Kenya- exporting thru AGOA to USA as locals. Small indigenous Biz owners don’t stand a snowball chance in hell”.
Link to video comment below:
http://www.youtube.com/watch?v.....annel_page
Human beings are the essential element in any business success. I agree with you, all these bureaucratic layers AGOA, WTO, EA Federation are political gimmicks that will not help the small time or new entrant in entrepreneurship. The Joes, Wangaris and Murius of Karatina have to take a leap of faith.
You got to make real and live connections with other people. They don’t have to be the merchants of Venice either. Just your ordinary next door neighbour. Once you start climbing the ladder of business success bring in the professionals- tax accountants and product quality control and only one at a time. Bottom line: you have to be in control of the end product and listen to the customer. Problem is we want to sell what we think customers want, you dead wrong.
I have seen an Avocado go for $2 , a cacti go for 50 cents apiece and handmade necklaces fetching $45. These stuffs don’t need a rain forest to grow neither a Wall Street economist to sell them in Bronx, NY! Knock the doors and if they don’t open keep knocking.
Why ask AGOA to do that for you?
From: Siasabora
Siasa:
Why would the Indian and Chinese firms even bother manufacturing in Kenya? Even wit AGOA, aren’t the costs of doing business in Kenya still too high, so that, any benefit they may have gotten from AGOA will be wiped out by their much higher costs.
KE,
If higher cost is the issue PLEASE lets address the issues rather than place blanket condemnation on a good piece of legislation.
Having prefferential treatment in terms of trade by the Americans is not something new. They have been doing this with many other countries as well.
You can’t just be against the whole legislation, the spirit of the Act is good and it has helped people get jobs and increase exports for the country.
If higher cost is the issue then that needs to be addressed but not some rhetoric over whether Kenyans can really provide goods and services. We all know Kenyans are capable and they country just needs the adequate knowledge base and dependable institutions to follow this through.
Kenya is facing tough times to overcome many of these challenges. When i see people like you and siasa carelessly condemning a good legislation i get very disappointed because you miss the spirit of the legislation. There is a lot more to be said on this topic. The FACT remains that Sub saharan countries need market to be able sell their products. The biggest economy right now is the United States. I can see you comparing Kenya and India and China. Do you know Kenya does not even have a direct flight to the United States. The only talks on the flight from Atlanta to Kenya collapsed.
The odds are very much against the Sub saharan countries and they can use a little help which this piece of legislation tries to capture. Please lets pay attention to what helps the Kenyans overcome these challenges not smear politics which is same as taking backward steps.
Didier:
Kenya and the rest of sub-saharan Africa need to stop depending on mercy from the west.
At the end of the day, you have to be able to compete, with or without preferential treatment.
The Chinese competed with Americans when it came to factory manufacturing and they succeeded. Americans complained about losing their jobs, but in the end, capitalism won out: i.e. it went to where they could do business for the lowest price and it was China. The U.S. government could not even protect it’s own companies against this competition and they were forced to adjust.
India did the same thing with outsourcing. They showed American companies that they could do the same jobs, but at 50% less of the cost and guess what happened? capitalism again won out and companies flocked there.
This is where the world is moving. It’s no longer about trade agreements or governments. It’s about private businesses finding the most efficient markets and cost effective mechanisms for themselves, wherever in the world they exist.
I actually got nervous when I realized just how much the world had changed. It’s all about price & efficiency, not geographic location or nationality.
Kenyanetrepreneur you have to be optismic or positive bana. AGOA has been put there for a reason. Hillary didnt travel all the way from U.S.A for nothing, african entrepreneurs didnt travel all the way from their countries for nothing. If AGOA was useless, hakuna mtu ange bother ku attend that forum & Am sure you must have been one of the attendees.
As for Chineese products, they could be cheap but most are substandard & counterfeit. You purchase a shoe or a belt which is definately from China thinking its pure leather only to find out later after a short while ni plastic. You are the people who are supporting foreign substandard products into the Country at the expense of our local industries. You saw the chinese substandard batteries that were seized the other day by KEBS? The owners of those Companies distributing the fake batteries (Chinese) had even managed to forge the KEBS standardisation mark of quality. This people are being encouraged to sell those fake dry cells in Kenya while our own dry sell manufacturer EVEREADY goes under imagine mpaka they didnt pay us the shareholders dividends. KWANI WEWE HUJIVUNII KUWA MKENYA? Mimi najivunia kiasi
Chegepreneur:
Who wouldn’t want to go for a conference? It’s an all expense paid for trip/vacation! You stay in a nice hotel, you eat good food….very few people turn down those trips. So, focusing on the number of people who attended the forum won’t tell you much about the agreements effectiveness.
The drafters of the agreement have said that it hasn’t worked as well as they thought. The question then becomes, why? And there needs to be a much more honest discussion about Africa, trade & this changing global economy.
European & American farmers are heavily subsidized by their taxpayers and politicians are not going to get rid of those subsidies because they’ll be voted out of office if they do that.
So, if your an African farmer, instead of waiting for the rules of the game to change, you’d be better of adjusting to the reality. i.e. don’t grow maize & try to compete with a heavily subsidized U.S. or British farmer because you won’t win. However, if you grow something else that Americans want and that isn’t grown by a farmer who is subsidized, you may have a slightly better chance of selling your product.
Africans need to stop waiting for the west to give them things and they need to stop whining about how unfair the world is to Africa — just copy the Chinese & Indians & learn how to compete.