USA/Africa: Economic Policy, 1/2, 10/29/01

USA/Africa: Economic Policy, 1/2, 10/29/01

USA/Africa: Economic Policy, 1 Date distributed (ymd): 011029 APIC Document

Africa Policy Electronic Distribution List: an information service provided by AFRICA ACTION (incorporating the Africa Policy Information Center, The Africa Fund, and the American Committee on Africa). Find more information for action for Africa at

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Region: Continent-Wide Issue Areas: +economy/development+ +US policy focus+


This posting contains a statement released today by Africa Action, Oxfam America, and ActionAidUSA, at a briefing for the international and White House press corps on the occasion of the first U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum. The statement highlights four broad policy changes needed for U.S. policy on economic relations with Africa, in the areas of debt, international trade negotiations, development assistance, and U.S./African trade in particular. The groups argue that the present approach, focused on the African Growth and Opportunity Act (AGOA), is too narrowly limited to trade and unhelpful to promotion of sustainable development of African countries.

Another posting distributed today contains selected web links for more information on the issues discussed in the statement, as well as excerpts from a March 2001 U.S.-African Trade Profile with statistics on U.S. trade with sub-Saharan Africa. Despite AGOA, the data make clear, U.S. imports from Africa are still highly concentrated on a narrow range of products (oil and strategic minerals) and a small number of countries.

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Africa Action Contact: Salih Booker or Ann-Louise Colgan, (202) 546-7961; Aisha Satterwhite, (212) 785-1024

Oxfam America Contact: Severina Rivera, (202) 496-1197

ActionAidUSA Contact: Irungu Houghton Tel: (202) 835-1240/1242 E-mail:

Statement to the first U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum

October 29, 2001

We, the undersigned groups, believe that a new approach is required toward US-Africa economic relations.

When representatives of the wealthiest country in the world sit down this week with representatives of countries from the world's poorest region, the new U.S.-Sub-Saharan Africa Economic Cooperation Forum should be used to promote a new form of economic cooperation less narrowly centered on trade and more focused on supporting sustainable development of African societies.

Washington should recognize that its limited efforts to promote trade as the principal arena of economic engagement with Africa have benefitted few African countries. Current U.S.-Africa trade policy is limited to the providing market access for low-wage, low-skill, and raw-material-based production for export which due to inherent volatility and structural declining terms of trade simply sustain poverty as opposed to supporting development. Moreover, the U.S. obsession with trade and free market solutions to development challenges in Africa is dangerously misguided at this critical juncture.

Africa is the region most vulnerable to external shocks and with warnings of an impending global economic crisis in the wake of the Sept 11th terrorist attacks on the U.S. it should be evident that Africa requires extraordinary support beyond the prevailing programs of cooperation.

We believe that a new framework for economic cooperation between the U.S. and the countries of Africa must include the following:

1. Cancellation of Africa's external debts 2. Support for Africa's key positions at the World Trade Organization 3. An increase in U.S. development assistance 4. A shift in U.S. trade policy to simplify expanded market access to the US market for a larger number of African products and to lift economic conditionalities imposed under the U.S. Trade and Development Act of 2000

Finally, we call on the U.S. administration to withdraw its unseemly effort to force "fast track" (renamed the Presidential Trading Authority-PTA) through Congress by wrapping free trade in the flag of patriotic duty. Giving the President executive privilege to negotiate binding trade agreements with other countries without for example requiring environmental protection and labor rights guarantees, or other necessary measures, is a recipe for disaster for U.S. workers and African countries alike.

The inauguration of a new forum to regularly discuss and negotiate U.S.-African economic cooperation at this important moment provides the opportunity to forge a more comprehensive approach that joins the instruments of Aid, Trade, Investment and Debt relief together in pursuit of sustainable development in Africa.

(1) Cancel the Debt

Sub-Saharan Africa's massive external debt is perhaps the single largest obstacle to the continent's development efforts and its economic independence. The more than $300 billion which African countries owe to international financial institutions and foreign creditor governments represents an unsustainable burden that undermines Africa's attempts at economic growth. Any serious effort at promoting Africa's economic development must therefore begin by removing the crippling burden of its foreign debt.

The 48 countries of sub-Saharan Africa spend $13.5 billion each year repaying debts to rich foreign creditors. The debts themselves are largely illegitimate, based on their origins and their effects. Repaying these debts diverts money directly from spending on health care and education, and economic development. Over the past two decades, African countries have paid out more in debt service to foreign creditors than they have received in development assistance or in new loans. As a result, throughout Africa, average incomes have declined and conditions of poverty have worsened. The creditors of Africa's external debt, including the US and other governments and especially international institutions like the World Bank and International Monetary Fund, continue to insist that the debts be repaid, despite the economic and social costs of this massive outflow of resources. Africa's debt crisis traps the continent in a perpetual cycle of underdevelopment.

The current international debt relief framework, the Heavily Indebted Poor Countries Initiative (HIPC), launched by the World Bank and IMF in 1996 and "enhanced" in 1999, has failed to provide a solution to the debt crisis. In the 22 countries that have qualified for HIPC debt relief to date, governments still spend more on debt repayments than on health care. On average, these countries have seen only a 27% reduction in annual debt repayments. In two African countries, Zambia and Niger, debt repayments have actually increased since qualification for HIPC assistance.

Despite the clear flaws in this debt relief framework, the leaders of the world's richest countries, meeting at the G-8 summit in Genoa in July 2001, refused either to further enhance the initiative or to acknowledge that it has failed. The reality is that the HIPC initiative is designed to serve creditors by squeezing the maximum possible in debt payments from the world's poorest economies. It does not benefit debtor countries, and it should therefore be considered obsolete. United Nations Secretary General Kofi Annan has concluded that the HIPC Initiative does not provide an adequate response to the debt crisis and has called for an immediate moratorium on debt repayment.

If the world's richest countries and financial institutions are serious about committing themselves to Africa's development, they must cancel the continent's unsustainable burden of debt. They should also consider who bears the responsibility for failed economic policies imposed on Africa, as well as the longer historical reasons for Africa's impoverishment, and ask the question "who really owes whom?".

The US is a both a bilateral creditor of African countries, and the single largest shareholder in both the World Bank and IMF. As such, it holds major influence over the international response to Africa's debt crisis. As the US holds its first annual economic summit with African Trade and Finance Ministers, it must commit itself to the cancellation of Africa's external debt as a first step to true economic cooperation and as a prerequisite to Africa's economic growth.

(2) Support for Africa at the World Trade Organization (WTO)

Economic conditions in Africa remain highly fragile. Only a few countries have combined high growth rates with rising domestic savings and investment. The deregulation of agricultural markets does not appear to have triggered the acceleration of growth. Trade liberalization may have increased the importance of international trade for Africa, but Africa's share of world trade has declined. Africa entered the new millennium increasingly integrated into the global economy at the bottom.

More horrifying for Africa's millions of people living under the poverty line is the loss through trade of over half of all net resource flows to the region as a result of market barriers, declining terms of trade and other external factors. Added to debt interest payments, profit remittances and other capital outflows, this loss is a direct net transfer of real resources from Africa to the rest of the world.

The UN panel on Financing for Development estimates the total cost of trade barriers in the North to Southern exports at more than $100 billion each year. This figure is many times more than the total development aid provided by the developed countries. Dismantling these trade barriers would significantly increase income and assist poverty alleviation in Africa by providing added impetus to economic growth.

Until this happens, understandably, poor people, the general African public and their Governments are wary of new trade relationships that fail to address economic security and net resource transfers in 2001. We share their concerns.

Last month's OAU meeting of African Governments in Abuja, Nigeria reflected on the relevance of a new WTO round for Africa and on the African Growth and Opportunity Act (AGOA), now enacted under the Trade and Development Act. African Governments stressed the need for a rules-based multi-lateral trading system that promotes economic development, facilitates African regional integration, and contributes to the eradication of poverty.

There is an urgent need to support meaningful and effective Special & Differential Treatment provisions, for developing countries in general, and Africa in particular, given the structural weaknesses in their economies and declining share of world trade. These provisions are included in trade agreements to allow for special difficulties faced by developing countries. But such measures are not now strong enough to spare these countries from being forced to implement policies that are only appropriate for much stronger economies, with often devastating effects.

Seattle collapsed under the weight of a lack of transparency and unfair policy privileges in favor of the developed nations. It collapsed because the US and Europe delegations negotiated in a manner that reduced the WTO to a multilateral vehicle for their domestic interests.

Sadly, recent statements by the US, EU and multilateral institutions such as the World Bank and UNDP champion the need for a new round of trade talks without seriously considering the weight of existing legitimate grievances by African and other developed countries with the current rules. Without changing this context, it will be impossible to find common global ground in a democratically oriented international body in the fourth WTO ministerial conference.

We support the unified position of African Governments that a new round should only take place when there is agreement on a new and specific development and poverty eradication agenda, as well as more equitable, transparent and accountable procedures for negotiating. The following three demands are central to this:

* The next round must enable flexibility in the Agreements on Intellectual Property Rights and Agriculture to support the rights of developing countries to protect farmers' livelihoods, food security, access to labor, and the supply of essential herbs and medicines. Particularly important is the proposed declaration by African and other developing countries affirming that nothing in existing trade agreements "shall prevent members from taking measures to protect public health."

* The United States and other northern countries should eliminate all domestic and export subsidies to agriculture that artificially increase their big agribusiness sectors' competitiveness and crowd out exports from poor farmers in African countries.

* The US should support the adoption of a decision at the WTO meeting that makes respect for Special & Differential Treatment provisions for developing countries legally binding on developed countries.

The Economic Cooperation Forum launched today should produce new U.S. support for these key African positions at the upcoming WTO meeting.

(3) Increase Development Assistance

Foreign aid (Official Development Assistance) from donor governments is a key source of funding for the development efforts of African countries. The immense social and economic challenges faced by these countries since independence require greater resources than African governments themselves command, and the sources of finance available are limited. The importance of this type of support from the US and other wealthy economies to African countries cannot be underestimated, and such assistance has been in decline during the past decade. In an era of ever-increasing economic globalization, those countries that benefit the most from the world economy must share in the necessary public investment for those parts of the world that bear more than their share of the disadvantages.

The US has a special obligation to provide assistance to African countries for several reasons. As the world's richest country, it is in a position to provide strong financial support to promote economic growth and development in African countries. The US also has a special historical relationship with Africa that brings with it a unique responsibility towards the continent and its social and economic circumstances. Yet the US has consistently failed to devote bilateral aid to African countries that is commensurate either with its obligations or with these countries' needs.

During the Cold War, US foreign aid to developing countries was dictated less by the actual needs and capacities of recipient countries than by strategic concerns. For much of this period, development assistance was used for political patronage. When the Cold War ended, over a decade ago, the changed global context meant that aid could be directed towards true development objectives. However, in the post-Cold War era, levels of development assistance have fallen in a consistent downward trend, and US spending on foreign aid has declined, relative both to the size of the US economy and to the federal budget.

While the world's richest countries, represented in the Organization for Economic Cooperation and Development (OECD), have repeatedly promised to devote 0.7% of gross national product (GNP) for official development assistance to poorer countries, only five small European countries now meet that target, and the US ranks at the very bottom. The US provides only 0.1% of GNP for development assistance, and sub-Saharan Africa receives only about one-tenth of this. The total of Official Development Assistance from all sources to Sub-Saharan Africa has fallen by 29% since 1990.

This decline in aid comes at a time when Africa needs financial support more than ever. Throughout the continent, the burden of external debt, the massive health crisis, and the effects of failed economic policies often imposed by foreign creditors have left countries facing overwhelming challenges. Development assistance is critical to enabling African governments to address these difficulties. Further lending to poor countries is inappropriate as a primary method for funding development when it only exacerbates the debt crisis and entrenches economic dependency. Prior to the G8 meeting in Genoa, Italy, President Bush suggested that the World Bank should provide development grants rather than loans to poor countries.

Recent polls in the US have also shown that the American public believes that the US has vital interests in Africa, and that foreign aid forms an important part of how the US promotes mutual interests with Africa. If the US and other wealthy countries are serious about promoting sustainable development in Africa, they must dramatically increase the levels of development assistance they provide. It is in their own interests to do so, because social and economic development in Africa will ultimately promote greater stability at an international level. The U.S.-Africa Economic Cooperation Forum must place increasing development assistance prominently on its agenda.

(4) Reform the African Growth and Opportunity Act

On May 18, 2000 former President Bill Clinton signed into law the Trade and Development Act of 2000, which contained both the African Growth and Opportunity Act (AGOA) and the US-Caribbean Basin Trade Enhancement Act. Many American and African officials said that AGOA symbolized a new American political-economic partnership with Africa.

With the evolution of bilateral, regional and multilateral trade liberalizing initiatives, international trade has become the latest "mainstream" dimension of international development. In the case of Africa, neo-liberal based arguments suggest a causal relationship between Africa's poverty and African societies being marginalized in an increasingly globalized world economy. From the premise that African economies are poor because of they are relatively "closed" to the wonders of free trade and capital flows, trade liberalization and export orientation are offered as viable development policy prescriptions. However, these policies also link national economic growth to increasing volatile global capital expansion and developed nation import growth. Based on this flawed premise and inadequate analysis of the structural causes of Africa's poverty and complexity of development challenges, US economic policy under AGOA concentrates on increasing Africa's integration into the global economy. However, such policies tie national economic growth and development to the inherently volatile boom and bust logic of global capital flows and rich nation import growth.

AGOA is fundamentally a U.S. policy tool for liberalizing the structure and orientation of the "playing fields" governing trade and investment activities between African societies and America. AGOA is not trade and investment agreement per se, it is a framework for negotiating future economic relations. AGOA represents a pro-active, bilateral example (in tandem with other multilateral trade and development approaches in the WTO, IMF and World Bank) of how US Government policy and institutions are utilized as instruments to re-create or perpetuate the economic rules of the game, often at the expense of Africa's development needs.

The failure of AGOA to address the structural sources of Africa's poverty and constraints on development, raise questions about its ability to serve as a source of total net resource transfers for supporting sustainable growth and development in Africa societies. Even with the technical adjustments in the AGOA textile provisions now being considered as "AGOA 2", this approach will have limited positive impact.

An alternative approach to US economic policy would seek to: help Africa reverse its declining terms of trade; remove the burden of foreign indebtedness; support gross domestic capital formation; increase levels of effective demand, domestic consumption and purchasing power; provide technical assistance to address human and productive capacity constraints; provide market access to African agricultural products; and permit African nations greater authority to utilize national and regional trade, investment and industrial policies as strategic tools for governing national resources, markets and factors of production to support internally oriented development processes.

We support the call of African Governments that AGOA provisions be amended to encompass a wider range of African products and the simplification of rules to match the industrial capacity of African countries. We further call for the elimination of eligibility criteria that impose economic policies on African countries and undermine their sovereignty and democratic control of development policies.

************************************************************ Subject: USA/Africa: Economic Policy, 2

USA/Africa: Economic Policy, 2 Date distributed (ymd): 011029 APIC Document

Africa Policy Electronic Distribution List: an information service provided by AFRICA ACTION (incorporating the Africa Policy Information Center, The Africa Fund, and the American Committee on Africa). Find more information for action for Africa at

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Region: Continent-Wide Issue Areas: +economy/development+ +US policy focus+


A statement (distributed in a separate posting) was released today by Africa Action,Oxfam America, and ActionAidUSA, at a briefing for the international and White House press corps on the occasion of the first U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum. The statement highlights four broad policy changes needed for U.S. policy on economic relations with Africa, in the areas of debt, international trade negotiations, development assistance, and U.S./African trade in particular. The groups argue that the present approach, focused on the African Growth and Opportunity Act (AGOA), is too narrowly limited to trade and unhelpful to promotion of sustainable development of African countries.

This posting contains selected web links for more information on the issues discussed in the statement, as well as excerpts from a March 2001 U.S.-African Trade Profile with statistics on U.S. trade with sub-Saharan Africa. Despite AGOA, the data make clear, U.S. imports from Africa are still highly concentrated on a narrow range of products (oil and strategic minerals) and a small number of countries.

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Selected Web Links for Background Information on issues raised in October 29 statement by Africa Action, Oxfam America, and ActionAidUSA

Note: This is not intended to be a comprehensive list, but a short list of what we recommend as good starting points for particular topics.

Debt Cancellation Includes links to other sources, as well as to documents distributed on the topic through the Africa Policy Electronic Distribution List. Also the June 2001 Africa Action position paper on Africa's Debt.

International Trade Negotiations The Third World Network website has the most comprehensive and recent information available on the positions presented by African and other developing countries in World Trade Organization negotiations. BRIDGES Weekly Trade News Digest, from the Internatonal Centre for Sustainable Trade and Development, has regular summaries of the state of trade negotiations. Includes links to other sources, as well as to documents distributed on the topic through the Africa Policy Electronic Distribution List.

Official Development Assistance Includes several recent documents from the May 2001 Brussels conference on Least Developed Countries, and other references. Latest official statistics from the Development Assistance Committee of the OECD Reports from the Reality of Aid project, with critical reviews from Northern and Southern non-governmental organizations. The Africa page of the official site of the U.S. Agency for International Development.

U.S./Africa Trade Information Site dedicated to the African Growth and Opportunity Act. Has detailed information useful to businesses, as well as links to statistics and reports from the US Trade Representative's office and other agencies. In addition to the profile excerpted below, the latest trade statistics (through June 2001) are available at: The Corporate Council on Africa, which is hosting a U.S-Africa Business Summit in Philadephia on October 30 - November 2. Links to most recent statistics, including query for detailed country-level information.



Prepared by: G. Feldman U.S. Department of Commerce, International Trade Administration, Office of Africa March 2001

[brief excerpts only; for full text see]

Two-way trade between the United States and Sub- Saharan Africa recovered strongly in 2000 from a lackluster performance in 1999, propelled by surging prices for imported crude oil and modest increases in U.S. exports to South Africa and Nigeria. Total trade (imports plus exports) soared 50%, to $29.4 billion.

* U.S. exports to Africa grew 6.4% to $5.9 billion, although sales did not recover all the ground lost in 1999 from the record 1998 total. The increase was led by sales of aircraft to South Africa and Kenya, and oil field equipment to Nigeria.

* U.S. imports from Africa surged by two-thirds to nearly $23.5 billion, due to soaring prices for crude oil.

Total trade had decreased narrowly in 1999, as a dramatic fall in U.S. exports was offset by higher U.S. imports caused by rising oil prices. Average crude prices began to climb in March 1999, and escalated nearly 150% by year-end 2000.

The U.S. merchandise trade deficit with Sub-Saharan Africa doubled in 2000, to $17.6 billion.

The cumulative imbalance over the last five years is nearly $52 billion in Africa's favor, but the associated transfer of financial resources benefits only a handful of African countries which supply substantial amounts of crude oil or strategic minerals to the United States.

* Nigeria, Angola, Gabon, and South Africa accounted for nearly 94% of the U.S. trade deficit with Sub-Saharan Africa in 2000. The first three were major oil suppliers, while South Africa provided platinum and diamonds.

* As trade increases between Africa and the United States it also grows more concentrated, with a small number of African countries accounting for a greater share of the total for both imports and exports.

Africa's Global Trade. Sub-Saharan Africa's total imports declined 7.5% in 1999 (the latest year available), to $77.2 billion from $83.5 billion in 1998. The contraction was due in large measure to the delayed impact of the financial crisis which gripped Asia and other emerging markets in 1997-98. The crisis exerted downward pressure on Africa's terms of trade, as world prices fell for most of Africa's export commodities.

Sub-Saharan Africa's share of world trade continues to decline, increasing Africa's marginalization from the global economy and excluding the region from growing world prosperity. In the last two decades, the volume of world trade has tripled while Sub-Saharan Africa's trade has grown less than 10%. As a result, Africa's share of global trade has fallen from just under 4% to less than 1.5%.

The U.S. share of Africa's total import market was 7.3% in 1999, down from 8% in 1998 due to appreciation of the dollar on foreign exchange markets. The dollar appreciated nearly 5% against the euro in 1999, while the United States slipped from second place to third among Africa's industrial country suppliers behind France with a 9.7% share and Germany with 7.6%. EU suppliers combined enjoyed a 38.6% market share in 1999, virtually unchanged from 39% in 1998. The dollar appreciated still faster in 2000, gaining a further 20% in value against the euro. The trend could have negative implications for U.S.-African trade in years to come.

Sub-Saharan Africa accounts for less than 1% of U.S. merchandise exports, and less than 2% of U.S. merchandise imports. In comparison, the region accounts for 3.6% of global exports and 3.7% of total imports for the European Union (EU). However, the United States is Africa's largest single market, purchasing 19% of the region's exports in 1999. The United Kingdom was second at 6.8%, and France third at 6.4%. The EU combined absorbed 40% of Sub- Saharan Africa's exports.

Impact of Asia Crisis. The Asian financial crisis was slower to affect Africa than most other regions, due to the undeveloped state of most African financial markets. However, the crisis eventually took a major toll on Africa's terms of trade due to lower demand in Asia for Africa's principal exports. Crude oil, gold, and copper were particularly hard hit, and only oil has recovered.

* Average world crude oil prices fell from $23 to under $10 per barrel between 1997 and 1999, then climbed to nearly $34 during late 2000 before a small decline.

* Meanwhile, gold prices which fell 24% after the onset of the Asia crisis in 1997, have continued to slide. In 2000 they averaged 27% below their pre-crisis levels, partly in response to large sales by the U.K. and Swiss national banks.

* World copper prices were approximately 38% lower in 2000 than in 1995, although declining stockpiles caused a mild uptrend in prices near the end of the year.

* According to IMF data, in late 2000 the metals commodity index was nearly 17% below the 1995 level, and the index for agricultural raw materials was down 28%.

* The World Bank anticipates a decline in crude oil prices in 2000- 2001, and modest increases in prices for metals and agricultural raw materials. However, African exporters of coffee, tea, and cocoa would still face prices well below the levels of the pre- Asia crisis. ...

U.S. Merchandise Exports in 2000

U.S. merchandise exports to Sub- Saharan Africa were $5.9 billion in 2000, a 6.4% increase from the 1999 total. The expansion was led by sales of oil and gas field equipment to Nigeria, and aircraft to South Africa and Kenya. Exports had contracted sharply in 1999, due to dramatic declines in sales to the three largest U.S. markets in the region: South Africa, Nigeria, and Angola.

* Sales of aircraft and oil field equipment tend to be volatile, suggesting that export growth may not be sustainable in the longer term.

* In 1998, exports of aircraft and parts to South Africa and oil field equipment to Angola pushed U.S. exports to their highest total ever. A dramatic decline in these items in 1999 caused a large fall in total U.S. sales.

The 6.4% increase in 2000 shipments to Sub- Saharan Africa lagged behind gains in most other regions, with the exception of Eastern Europe where exports were flat and the Middle East which fell 9%. U.S. exports increased 21% in East Asia, 9.7% in the former Soviet republics, 7.4% in Central and South America, and 12.6% worldwide.

Despite the relatively slow growth, U.S. exports to Sub-Saharan Africa were 78% greater than those to the Newly Independent States of the former Soviet Union, and 86% greater than to Eastern Europe. U.S. exports to South Africa alone were a third greater than our sales to Russia, whose population is more than 3.5 times as large.

As U.S. exports to Sub-Saharan Africa grow, they become increasingly concentrated among a small number of countries. The top four markets--South Africa, Nigeria, Kenya, and Angola- accounted for 72% of U.S. sales in 2000, with South Africa accounting for 52%, Nigeria for 12%, Kenya for 4%, and Angola for 3.8%. In 1999, the top four markets represented less than two- thirds of total exports. ...

U.S. Merchandise Imports in 2000

U.S. purchases from Sub- Saharan Africa totaled $23.5 billion in 2000, a 67% increase from the 1999 total, due to sharply higher prices for crude oil and a 40% increase in imports of platinum group metals.

Crude oil accounted for $16.3 billion, or 69% of U.S. imports from the region. In 1999, U.S. imports of crude oil from Sub- Saharan Africa were $8.1 billion, or 58% of total imports.

* Although crude oil imports from Sub-Saharan Africa doubled in value terms in 2000, the increase in total barrel volume was only 16%. The average price per barrel escalated more than 73% during the year, to $28.79.

* Sub-Saharan Africa supplied 18% of U.S. crude oil imports by value in 2000, up from 16% in 1999. In comparison, Persian Gulf suppliers provided 25% of U.S. imports, unchanged from 1999.

* Nigeria, the number five U.S. supplier, provided $10 billion of crude oil to the United States, 11% of total imports. Angola was the eighth leading supplier, at $3.4 billion. Gabon ($2.1 billion), Congo-Brazzaville ($ 348 million), Congo-Kinshasa ($168 million), and Equatorial Guinea ($107 million) also ranked among the United States' top 25 suppliers of crude oil.

The second leading U.S. import, platinum group metals, constituted 6.5% of purchases. This category also includes iridium, palladium, and rhodium, among others. Partially refined petroleum products represented 4.1% of U.S. imports from the region.

After crude oil, platinum, and diamonds, imports of woven and knit apparel experienced the strongest expansion in 2000, growing 28%. The upsurge came before the apparel provisions of the African Growth and Opportunity Act (AGOA) were in force. Enacted in May 2000, AGOA provides for duty-free and quota-free importation to the United States of finished apparel from eligible African countries when they have met certain stipulated requirements. As more countries meet the requirements, the apparel sector could become an export growth engine in Africa.

U.S. imports from Africa remained highly concentrated among a small number of suppliers, even more so than U.S. exports. Four countries-- Nigeria, South Africa, Angola, and Gabon- accounted for more than 87% of U.S. purchases. Three were major crude oil suppliers, while South Africa was an important supplier of platinum, diamonds, and steel.

EU imports from Sub-Saharan Africa were only slightly more diversified. The six leading suppliers-- South Africa, Nigeria, Cote d'Ivoire, Cameroon, Angola, and Ghana-- accounted for 70% of EU imports from the region, with crude oil constituting nearly 19% of the total, diamonds 11%, and gold 6%.

Generalized System of Preferences. Duty-free importation of goods from Africa under the U.S. Generalized System of Preferences (GSP) jumped 54% in 2000, to $2.4 billion. However, the increase does not represent wider GSP utilization by African countries. Instead, the increase was dominated by oil shipments from Angola, Congo- Kinshasa, and Equatorial Guinea.

* Angola moved to third place among GSP beneficiary countries worldwide from fifth place in 1999. South Africa was the eighth leading beneficiary due to a 30% jump in shipments of ferro- chromium. For the second straight year, these two countries accounted for 80% of total GSP benefits in the Sub-Saharan region. Five countries accounted for more than 94% of GSP utilization in Africa.

* Angola, Congo-Kinshasa, and Equatorial Guinea benefitted from a measure first implemented in 1997 that made imports of crude oil and partially refined oil products from least developed beneficiary countries GSP-eligible.

* Leading GSP items from Africa in 1998 were: crude oil, partially refined petroleum products, ferro-chromium, and cane sugar.


Message-Id: <> From: "Africa Action" <> Date: Mon, 29 Oct 2001 10:31:07 -0500 Subject: USA/Africa: Economic Policy, 2

Editor: Ali B. Ali-Dinar

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