In Angola — the second biggest exporter under AGOA — 85 percent of GDP comes from oil production and related industries, fueling a growth rate above 8 percent. Meanwhile, 67 percent of Angolans live on less than $2 a day, a figure that has remained virtually unchanged since AGOA benefits were extended there in 2003.
The trend here is clear: trade in sectors like oil, which are capital-intensive rather than job-creating, do much to benefit Gross Domestic Product (GDP) and little to create shared prosperity. Consider, then, that crude petroleum comprised almost 90 percent of the value of all AGOA exports from 2001-2013. The question of what expanded trade under AGOA is actually offering everyday Africans looms large.
And yet, when the United States International Trade Commission — the federal agency responsible for guiding U.S. trade policy — released an almost 400-page reportin April assessing the impact of AGOA, it neglected to touch this question.
The first step to ensuring that the benefits of AGOA reach more African people is greater transparency and honesty about what AGOA has achieved and what it hasn’t. Given the evidence to the contrary, it is deceitful to use GDP as a proxy for broad-based economic opportunity in sub-Saharan Africa.
Second, the United States can step up efforts to provide technical assistance to African institutions that reinvest the profits from expanded trade in social goods such as education, health care and infrastructure.
Finally, those negotiating the renewal of AGOA must use the agreement as a vehicle for promoting growth in labor-intensive, high-productivity export industries that can create just jobs for African people — jobs with appropriate remuneration, rights at work, and economic mobility.
Promoting just jobs and economic mobility in Africa helps President Obama fulfill the promise he made last year. It also creates new opportunities for investment and new markets for American products and services in a region of almost a billion people.
