19 July 2007

Africa Trade Act Seen as Important Tool in Poverty Fight

Coca-Cola’s Africa president says U.S. law serves as “a vital bridge”

By Jim Fisher-Thompson
USINFO Staff Writer

Accra, Ghana – The African Growth and Opportunity Act (AGOA), with its goal of alleviating poverty through export-led growth, never has been more important to the continent’s well-being, says the head of the largest consumer-product company in Africa.

Africa is “better positioned than it has ever been to break the bonds of poverty and take its place as a fit member of the community of nations,” Alex Cummings, the Coca-Cola Company’s president for Africa, told the Sixth Annual AGOA Forum July 18.

This largely is due to AGOA, Cummings said, the landmark trade legislation that extends duty-free access into U.S. markets for approximately 6,400 products from the 39 sub-Saharan nations that have carried out the economic and political reforms that qualify them for the benefits of the trade act.

“I think we can all be proud of the progress Africa has made since the passage of AGOA,” he told the more than 1,000 officials, businessmen and nongovernmental organization (NGOs) representatives meeting to discuss how best to optimize the trade act’s benefits.

“As Africa moves away from reliance on raw commodity exports to vertical integration [value-added production], AGOA remains a vital bridge to trade, investment and opportunity,” Cummings, who heads the work force of 60,000 that make Coca-Cola the largest private employer in Africa, said July 18.

By boosting African exports through its favorable trade provisions, Cummings said, AGOA is “creating a level playing field” in global markets, providing Africa an opportunity to build its manufacturing sector and thereby “increasing the value of its commodities that has for so long been ceded to non-African manufacturers.”

The Africans are also doing their part to support AGOA, Cummings said, adding, “real progress can be seen across the board.”

African governments are making it easier for business enterprise to succeed, he said, as “vital supply links are being forged and infrastructure developed and the work force is learning new skills while a larger entrepreneurial class is being fostered and encouraged.”

U.S. Trade Representative Susan Schwab, who led a U.S. delegation of 139 officials and trade experts to the forum, said AGOA was helping to bring Africa into the global web of trading nations.  Although oil and gas currently account for more than 80 percent of AGOA exports, she said that product diversification is increasing.

In 2006 African nonenergy exports under AGOA increased markedly in many sectors, including:

• Minerals and metals, up 21 percent;

• Cut flowers, 22 percent;

• Footwear, 30 percent;

• Cashews, 73 percent; and

• Transportation equipment, 81 percent.

Ghana’s president, John Kufuor, also touched on the need for product diversification in his remarks to the forum. He appealed to U.S. investors to increase their investments in Africa and embrace industries beyond the typical extractive ones such as oil and precious metals.

“Venturing into agriculture, processing, manufacturing and tourism,” Kufuor said, “are some of the ways in which technology transfer and Africa’s capacity building must be given a boost.  Relocation of factories [from outside the continent] and outsourcing ICT (information communications technology) contracts to Africa also could add to capacity building to make sub-Saharan Africans effective partners in trade.”

The Coca-Cola Company, founded in Atlanta in the 1890s, entered African markets in 1957 when it established a bottling plant in Sierra Leone. The company now offers a comprehensive HIV/AIDS health care program for all its employees in Africa and has partnered with the U.S. Agency for International Development (USAID) in AIDS education outreach as well as clean water and sanitation projects.

In addition to providing thousands of scholarships to students worldwide, the Coca-Cola Foundation has funded the construction of schools throughout Africa, including Ghana.

For more information, see African Growth and Opportunity Act.

(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)