US officially removes Uganda from Agoa trade deal

Summary:

• Uganda faces a nearly Shs40 billion export revenue gap after being removed from the African Growth and Opportunity Act (Agoa) by US President Joe Biden, with the termination effective January 1, 2024, due to human rights violations, prompting the need for alternative markets.

Uganda is currently grappling with the challenge of replacing nearly Shs40 billion in lost export revenue following the removal of the country from the African Growth and Opportunity Act (Agoa) by US President Joe Biden. The decision, communicated in December 2023 by the office of the trade representative, was based on Biden’s earlier notice of intention in October, citing human rights violations.

The termination means that Ugandan products no longer enjoy preferential treatment in the US market under Agoa. The statement from the trade representative specified that Uganda, along with Central African Republic, Gabon, and Niger, did not meet the requirements outlined in the Trade Act, leading to the termination effective January 1, 2024.

Agoa, enacted on May 18, 2000, allowed duty-free access to over 6,000 products from beneficiary countries to the US market. Uganda’s exports to the US, which saw substantial growth from Shs4 billion in 2019 to Shs39 billion in 2022, now face a setback. Textiles and agricultural products were among the major exports affected.

In response to potential negative consequences, such as job losses in labor-intensive sectors like textiles, the trade ministry’s permanent secretary, Geraldine Ssali, expressed confidence in Uganda’s ability to compensate for the loss by exploring alternative markets.

The termination from Agoa adds to a series of sanctions imposed on Uganda, including travel restrictions on top officials and threats of aid cuts, triggered by the adoption of the Anti-Homosexuality Act in 2023. Despite growing tensions with western allies, President Museveni, in his Christmas message, remained optimistic about Uganda’s ability to stand independently. He emphasized the country’s long history, economic growth, and resilience, urging those applying pressure to reconsider, asserting that African countries can assert themselves economically.