Order Code RL31772
CRS Report for Congress
Received through the CRS Web
U.S. Trade and Investment Relationship with Sub-
Saharan Africa: The African Growth and
Opportunity Act and Beyond
Updated October 19, 2005
Ian F. Fergusson
Analyst in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Danielle Langton
Analyst in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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U.S. Trade and Investment Relationship with Sub-
Saharan Africa: The African Growth and Opportunity
Act and Beyond
Summary
Following the end of the apartheid era in South Africa in the early 1990s, the
United States sought to increase economic relations with sub-Saharan Africa.
President Clinton instituted several measures that dealt with investment, debt relief,
and trade. Congress required the President to develop a trade and development
policy for Africa.
The economic challenges facing Africa today are serious. Unlike the period
from 1960 to 1973, when economic growth in sub-Saharan Africa was strong, since
1973 the countries of sub-Saharan Africa have grown at rates well below other
developing countries. There are some signs of improvement, but problems such as
HIV/AIDS and the debt burden are constraining African economic growth.
In May 2000, Congress approved a new U.S. trade and investment policy for
sub-Saharan Africa in the African Growth and Opportunity Act (AGOA; Title I, P.L.
106-200). U.S. trade with and investment in sub-Saharan Africa have comprised
only 1-2% of U.S. totals for the world. AGOA extends preferential treatment to
imports from eligible countries that are pursuing market reform measures. Data show
that U.S. imports under AGOA are mostly energy products, but imports to date of
other products are growing. AGOA mandated that U.S. officials meet regularly with
their counterparts in sub-Saharan Africa, and three of these meetings have been held.
AGOA also directed the President to provide U.S. government technical
assistance and trade capacity support to AGOA beneficiary countries. Government
agencies that have had roles in this effort include the U.S. Agency for International
Development, the Assistant U.S. Trade Representative for Africa (established by
statute under AGOA), the Overseas Private Investment Corporation, the Export-
Import Bank, the U.S. and Foreign Commercial Service, and the Trade and
Development Agency. In addition to bilateral programs, the United States is a
member of several multilateral institutions that also provide technical capacity
building.
In AGOA, Congress declared that free-trade agreements should be negotiated,
where feasible, with interested sub-Saharan African countries. Related to this
provision, negotiations on a free-trade agreement with the Southern African Customs
Union, which includes South Africa and four other countries, began in June 2003.
Several topics may be important to Congress in the oversight of AGOA and in
potential legislation amending the act. These issues concern the expiration of the act,
rules of origin provisions concerning textiles and apparel, the use of AGOA’s
benefits by more countries, and the HIV/AIDS epidemic. This product will be
updated periodically.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Perspectives on the Sub-Saharan African Economy . . . . . . . . . . . . . . . . . . . . . . . 3
Historical Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Current Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Growth Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
HIV/AIDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
U.S.-Africa Trade and Investment Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Trade with Sub-Saharan Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Investment in Sub-Saharan Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
AGOA: An Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Beneficiary Countries and Trade Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Developments Following Enactment of AGOA . . . . . . . . . . . . . . . . . 12
Amendments to AGOA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Current Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
AGOA Trade Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
United States-Sub-Saharan Africa Trade and Economic Cooperation Forum
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Technical Assistance and Capacity-Building . . . . . . . . . . . . . . . . . . . . . . . . 16
U.S. Agency for International Development (USAID) . . . . . . . . . . . . 17
Assistant U.S. Trade Representative for Africa (AUSTRA) . . . . . . . . 18
Overseas Private Investment Corporation (OPIC) . . . . . . . . . . . . . . . . 18
Export-Import Bank (Ex-Im) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
U.S. and Foreign Commercial Service (USFCS) . . . . . . . . . . . . . . . . . 20
Trade and Development Agency (TDA) . . . . . . . . . . . . . . . . . . . . . . . 21
Multilateral Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Integrated Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Joint Integrated Technical Assistance Program (JITAP) . . . . . . . . . . . 22
Regional Cooperation and Free Trade Agreements . . . . . . . . . . . . . . . . . . . 22
Southern African Customs Union FTA (SACU) . . . . . . . . . . . . . . . . . 23
U.S. Trade and Investment Framework Agreements (TIFA) . . . . . . . . 23
U.S. Bilateral Investment Treaties (BIT) . . . . . . . . . . . . . . . . . . . . . . . 24
New Partnership for Africa’s Development (NEPAD) . . . . . . . . . . . . 24
European Union Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Cotonou Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
AGOA: Future Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Appendix:
Regional Economic Integration Among Sub-Saharan Africa Nations . . . . . 27
Southern African Development Community (SADC) . . . . . . . . . . . . . 27
Common Market for Eastern and Southern Africa (COMESA) . . . . . 27
East African Community (EAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

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West African Economic and Monetary Union (WAEMU) . . . . . . . . . 28
List of Figures
Figure 1. Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Figure 2. U.S. Imports from Sub-Saharan Africa, 2004 . . . . . . . . . . . . . . . . . . . . 7
Figure 3. U.S. Exports to Sub-Saharan Africa, 2004 . . . . . . . . . . . . . . . . . . . . . . 7
Figure 4. U.S. Imports from Sub-Saharan Africa by Product Category, 2004 . . . 8
Figure 5. U.S. Exports to Sub-Saharan Africa by Product Category, 2004 . . . . . 8
List of Tables
Table 1. Country Status under AGOA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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U.S. Trade and Investment Relationship
with Sub-Saharan Africa: The African
Growth and Opportunity Act and Beyond
Introduction
All of us share a common vision for the future of Africa. We look to the day
when prosperity for Africa is built through trade and markets.
— President George W. Bush to delegates at the African
Growth and Opportunity Forum in Mauritius,
January 15, 2003
As reflected in the above statement by President Bush, a key element in U.S.
policy toward Africa is the potential benefit from improved commerce between the
two regions. This interest in increasing bilateral commerce began after the end of the
apartheid era in South Africa in the early 1990s. In 1993, Congress approved the end
of anti-apartheid restrictions, and later that year Commerce Secretary Ron Brown led
a business delegation to South Africa.
With the end of apartheid, President Clinton instituted numerous measures to
help the region and increase U.S. trade and investment there. In 1994, he announced
a $600 million aid and investment package for South Africa. In 1997, he proposed
the Partnership for Economic Growth and Opportunity in Africa, which offered
different levels of economic benefits to countries in sub-Saharan Africa (SSA),
depending on their economic reform measures.
At the same time, Congress was developing legislation that sought to improve
U.S.- Africa trade relations. In the 1994 legislation to implement the Uruguay Round
multilateral trade agreements (P.L. 103-465), Congress directed the Administration
to develop and implement a comprehensive trade and development policy for the
countries of Africa. Disappointed with the Administration’s first report under this
provision, some Members developed legislation to authorize a new trade and
investment policy for sub-Saharan Africa. In May 2000, Congress approved such
legislation in the African Growth and Opportunity Act (AGOA; Title I, P.L. 106-
200). AGOA offers trade preferences and other economic benefits to countries in
SSA that are pursuing market reform policies.

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CRS-2
Figure 1. Africa
TUNISIA
MOROCCO
Canary Islands
ALGERIA
LIBYA
WESTERN
EGYPT
SAHARA
MAURITANIA
CAPE VERDE
MALI
NIGER
ERITREA
CHAD
SUDAN
DJIBOUTI
NIGERIA
ETHIOPIA
CENTRAL
AFRICAN REPUBLIC
CAMEROON
SOMALIA
EQUATORIAL GUINEA
UGANDA KENYA
SAO TOME & PRINCIPE
REPUBLIC
GABON
DEMOCRATIC
OF
REPUBLIC
CONGO
RWANDA
OF THE
BURUNDI
ANGOLA
CONGO
TANZANIA
COMOROS
ANGOLA
ZAMBIA
MOZAMBIQUE
ZIMBABWE
MADAGASCAR
NAMIBIA
BOTSWANA
SOUTH AFRICA
Source: Map Resources. Adapted by CRS. (K.Yancey 6/21/04)
Both the executive and legislative branches continue to consider ways in which
to improve trade relations between the United States and SSA. In mid-year 2002, the
Congress amended AGOA to further increase market access for products from SSA.1
The Administration began free-trade negotiations with the South African Customs
Union (Botswana, Namibia, Lesotho, South Africa, and Swaziland) in June 2003.
Furthermore, in 2004 Congress passed legislation further amending AGOA, to extend
its benefits beyond the original deadline and clarify certain provisions. This
legislation also included directives to the President on investment initiatives and
technical assistance, and it was signed by President Bush in July 2004.
This report presents perspectives on African economic trends and provides an
overview of U.S. trade and investment flows with SSA. It discusses the provisions
of AGOA and the changes that have occurred since its enactment. It concludes with
a brief discussion of issues of congressional interest.
Perspectives on the Sub-Saharan African Economy
1 Section 3108 of the Trade Act of 2002, P.L. 107-210.

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CRS-3
Historical Perspectives
The pattern of Africa’s economic growth in recent history provides useful
insights in understanding Africa’s current economic situation and policy options.
Between 1960 and 1973 economic growth was reasonably strong in much of sub-
Saharan Africa (SSA). The subsequent two decades were, however, a period of
stagnation or decline for most countries.2 The causes of Africa’s slow and stagnant
economic growth have been a source of debate among development economists.
Analysts have cited poor governance, geographic features, and historical conditions
such as colonialism as different reasons for Africa’s economic challenges. Whatever
the underlying cause, Africa’s slow growth and stagnation have been attributed to
slow accumulation of both human and physical capital, dependence on single
commodity exports, low productivity growth and pressures from high population
growth rates.3
Most African countries experienced a single main break in their growth trends
at some point between 1973 and 1980, followed by persistent stagnation until 1992.
Recent data demonstrate that many countries have made a modest recovery since
about 1994, but the levels of growth have tended to remain far below the first post-
colonial phase.4 For the four decades as a whole, SSA’s average per capita income
growth of 0.9 percent lagged behind that of other developing countries by 1.5% and
approximately 3% below that of the high performing African (Botswana and
Mauritius) economies.5
The economies of Africa are often lumped together as one entity for analysis.
However, there is a wide variation in the growth performance of individual African
countries. A recent study found that in a group of 36 African countries, 22 countries
exhibited reasonably robust growth before the long period of stagnation. The
remaining 14 either experienced deep growth fluctuations or showed persistent
stagnation at growth rates below 1.5 percent throughout the last three decades. In this
study, the growth rates achieved by Botswana and Mauritius stand out.6
The consequence of the long period of stagnation in growth for a large number
of African economies, combined with high population growth rates, is that little or
no progress has been made in raising the standards of living in these countries. Many
2 A Hoeffler, “The Augmented Solow Model and the African Growth Debate”, CSAE,
University of Oxford, March 2000.
3 For a further discussion of African economic development, see CRS Report RL32489,
Africa: Development Issues and Policy Options, by Raymond Copson.
4 The Economist, May 13-19, 2000.
5 L. Pritchett (1998), “Patterns of Economic Growth: Hills, Plateaus, Mountains, and
Plains”, World Bank Paper, July 1998, (hereafter, Pritchett)
[http://www.worldbank.org/wbi/attackingpoverty/ events/Turkey_0199/pritch.pdf].
6 Pritchett, p.18.

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CRS-4
African countries have experienced a decrease in the standard of living.7 Between
1960 and 1994, out of 35 SSA countries for which comparable data exist, 16 suffered
at least 20% loss in income per capita measured in 1985 constant US dollars. Most
of the losses were registered after 1975.8 In contrast to SSA, developed countries
have sustained a remarkably steady per capita growth of approximately 2% for about
100 years, and some newly industrializing countries have maintained income growth
rates above 3% for nearly three decades, thus enabling them to gain significant
ground on the industrialized countries.9
Current Perspectives
The International Monetary Fund (IMF) forecasts that sub-Saharan Africa will
achieve a real GDP growth rate of 4.6% in 2005. This is a weaker growth rate than
the 5.3% achieved in 2004, and it is reportedly due to slower growth in the oil
exporting countries, as compared to the unusually robust growth in 2004. Non-oil
producing countries in Africa have an expected real GDP growth rate of 4.5%, which
is similar to that of 2004.10 The growth rate for the entire world is forecasted to be
4.3%, and 6.4% for all developing countries, with the fastest growth in Asia. Growth
rate forecasts for 2005 vary among the subregions of Africa, with a high of 7.7% in
the Horn of Africa, and 5.7% in the Great Lakes region. At 3.9%, West Africa has
the slowest forecasted growth rate in the region, partly due to a slowdown in Nigerian
oil production, and partly due to decreased world cotton prices — cotton is the main
export product for Mali, Burkina Faso, Benin, and Togo.11 High oil prices may have
also dampened growth in Sub-Saharan Africa, which is composed of mainly oil-
importing countries. Considering current growth trends, it seems unlikely that Sub-
Saharan Africa will meet the poverty target of the Millennium Development Goals
(MDGs).12
Growth Challenges. Despite the region’s improved economic performance,
the economic challenges facing Africa remain enormous. African countries remain
vulnerable to weather conditions, changing commodity prices, and political events
in parts of the continent. Many economies in Africa depend on one or two
commodity exports, and need to diversify their exports in order to decrease their
vulnerability to exogenous factors such as weather conditions and commodity prices.
They are also said to generate too little savings and attract too little investment.
7 W. Easterly (1996) “Why Is Africa Marginal in the World Economy? In: G Maasdrop, ed,
Can South and Southern Africa Become Globally Competitive Economies? (New York: St
Martin’s Press, 1996), pp. 19-30.
8 D. Rodrik, “Where Did All the Growth Go? External Shocks, Social Conflict and Growth
Collapses” mimeo, London School of Economic and Political Science, August 1998.
9 Pritchett, p. 12.
10 International Monetary Fund, Regional Economic Outlook, Sub-Saharan Africa
Supplement. October 2005.
11 International Monetary Fund, World Economic Outlook - Building Institutions. September
2005.
12 World Bank, Global Economic Prospects 2005, pp. 1-8.

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CRS-5
According to the UN Economic Commission for Africa, Africa must devote at least
25% of its GDP to investment to achieve sustainable growth.13 Yet, World Bank
figures indicate that gross domestic investment (public and private) in Africa only
accounted for 18% of GDP in 2003. Net foreign direct investment (FDI) at $10.1
billion was the equivalent of 2% of GDP. While FDI worldwide remains stable, FDI
flows to Africa as a percentage of flows to developing countries as a whole have
fallen from approximately 25% in 1970 to 6% in 2003. While GDP growth is
positive for Africa as a whole, average population increases of 2.7% in the 1990s
have caused per capita GDP to fall during much of the period. The average African’s
income was $490 in 2003 compared with $660 in 1980 (in current U.S. dollars).14
HIV/AIDS. The HIV/AIDS pandemic is also straining African economies and
threatens to curtail future economic growth. SSA’s incidence of HIV/AIDS is the
highest in the world at 7.4%, and ten countries in southern Africa have infection rates
over 10%. Botswana, long considered one of the region’s most successful economies,
had an infection rate of 37.3% in 2003. Life expectancy in Botswana has fallen to 38
years, and for the region as a whole, it has fallen to 46 years. The pandemic not only
diverts resources from investments in productive resources and social services to care
for the sick and dying, but it also disproportionately strikes some of the most
productive members of society: skilled workers, teachers, and professionals.15
Debt. The debt burden carried by SSA countries has been identified as a drag
on the economies of the region. At the end of 2002, the states of SSA owed foreign
creditors $208.9 billion. While SSA’s debt is comparable to other regions in terms
of absolute amount, per capita share ($251 per head), or debt service as percentage
of export earnings (12%), its debt burden is considered onerous because of its high
ratio of debt to income. Africa’s total debt was equal to 71% of its income in 2002.
Some have called the present levels of debt in Africa unsustainable and have
campaigned for its cancellation. Others maintain that outright cancellation of the debt
would create a moral hazard by, in effect, condoning bad economic and governance
policies. In 1997, the G-7 nations adopted a plan to reduce debt to sustainable levels
for highly indebted poor countries (HIPC). To date, several African countries have
taken advantage of the HIPC program, although some observers have criticized the
scope and pace of the program. In Sec. 121 of AGOA, Congress recognized the debt
forgiveness effort, but also called for additional bilateral and multilateral debt relief
programs to encourage trade and investment, support the development of free
markets and the private sector, and promote broad-based economic growth in order
to assist beneficiary countries in reducing their debt.16 In June 2005, the G-8 nations
agreed to further deepen debt relief and proposed 100% cancellation of all
multilateral debt for countries that have completed the HIPC program.17
13 United Nations, Economic Report on Africa 2002, pp. 37.
14 World Bank, World Development Indicators Online, accessed September 27, 2005.
15 See CRS Issue Brief IB10050, AIDS in Africa, by Raymond W. Copson.
16 See CRS Report RS21329, African Debt to the United States and Multilateral Agencies,
by Jonathan Sanford.
17 See CRS Report RL33073, Debt Relief for Heavily Indebted poor Countries: Issues for
(continued...)

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CRS-6
U.S.-Africa Trade and Investment Trends
U.S. Trade with Sub-Saharan Africa
The United States conducts a small share of its total trade with sub-Saharan
Africa. In 2004, the United States exported $8.2 billion to sub-Saharan Africa, or
1.1% of total U.S. global exports of $727.2 billion. The United States imported
$35.8 billion from the region, or 2.5% of its total imports of $1,460.2 billion. Total
trade (exports plus imports) between the United States and sub-Saharan Africa more
than doubled between 1990 and 2004, from $17 billion to $44 billion. However,
U.S. trade with sub-Saharan Africa barely changed its share of total U.S. trade from
1990 to 2004, from 1.9% in 1990 to 2.0% in 2004. Total trade between the United
States and Africa continued to rise in 2005. In the first half of 2005, the United
States exported $6.0 billion to sub-Saharan Africa, which is 1.3% of total U.S.
exports of $458 billion during the same period. Imports from SSA in the first half
of 2004 also increased, at $25.8 billion, or 2.8% of total U.S. imports of $923.9
billion.
Although U.S. trade with sub-Saharan Africa is small compared with major
trading partners, it is comparable to U.S. trade with several other developing regions.
For example in 2004, the United States traded $52 billion (exports plus imports) with
the Andean Pact countries (Bolivia, Colombia, Ecuador, Peru, and Venezuela), $41.8
billion with the Mercosur countries (Brazil, Argentina, Uruguay and Paraguay), $44
billion with the countries of sub-Saharan Africa, $30.3 billion with the countries of
South Asia (Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka), and $32
billion with the countries of the U.S. - Central American and Dominican Republic
Free Trade Agreement (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua,
and the Dominican Republic).18
Most U.S. trade with the region is with a small number of countries. Eighty-six
percent of U.S. imports from the region were from five countries in 2004: Nigeria
(46%), South Africa (17%), Angola (13%), Gabon (7%), and Equatorial Guinea
(3%). Exports were similarly concentrated, with 67% of U.S. exports to four
countries: South Africa (36%), Nigeria (18%), Angola (7%), and Ethiopia (6%).
The remaining countries each accounted for less than 6% of U.S. exports to the
region. (See figures 1 and 2.)
17 (...continued)
Congress, by Martin Weiss.
18 Regional trade figures compiled by CRS from data on the U.S. International Trade
Commission data website at [http://dataweb.usitc.gov]. Although the other regions include
fewer countries than sub-Saharan Africa, most U.S. trade with sub-Saharan Africa is
concentrated in a small number of countries.

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CRS-7
Figure 2. U.S. Imports from
Figure 3. U.S. Exports to
Sub-Saharan Africa, 2004
Sub-Saharan Africa, 2004
Source: U.S. International Trade Commission data website at [http://dataweb.usitc.gov].
Natural resources dominate U.S. imports from sub-Saharan Africa. Nearly
three-quarters of all U.S. imports from the region in 2004 were either energy products
(73%), which were almost exclusively petroleum, or minerals and metals (12%) (see
figure 4). Nigeria supplied 62% of U.S. petroleum imports from the region, which
accounted for 8% of total global U.S. oil imports. Angola supplied another 17% of
U.S. petroleum from the region, and Gabon supplied 9%. The most important
mineral/metal imports were platinum, followed by diamonds. Other notable U.S.
imports, much less in total value, were apparel articles, automobiles, and cocoa.
Despite the continued dominance of natural resource products in U.S. imports
from sub-Saharan Africa, there has been slow growth in the diversity of products
imported. Transportation equipment imports from Africa, mainly automobiles from
South Africa, have increased in value from $8 million in 1990 to $804 million in
2003. This value decreased to $592 million in 2004. The value of imported textiles
and apparel has also increased greatly, from $186 million in 1990 to $1,757 million
in 2004. These trends are obscured in an overview of African trade by the $26 billion
in 2004 U.S. energy imports from Africa, but they may represent tangible changes
occurring in small segments of the continent’s trade and production trends.
U.S. exports to sub-Saharan Africa were more diverse. Machinery and
mechanical appliances was the leading export sector in 2004 (26% of U.S. exports
to the region), followed by transportation equipment (20%), agricultural products
(15%), and chemical products (5%). Mining equipment was the leading export item,
followed by aircraft and aircraft parts, wheat, automobiles and telecommunications
equipment (see figure 5).

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CRS-8
Figure 4. U.S. Imports from Sub-Saharan Africa by
Product Category, 2004
Figure 5. U.S. Exports to Sub-Saharan Africa by
Product Category, 2004
Source: U.S. International Trade Commission data website at [http://dataweb.usitc.gov/]
The United States is among sub-Saharan Africa’s major trading partners. In
2003, the market share of all major industrial countries declined from 2002. France
was the leading industrial supplier to SSA with 8.4% of the market, followed by

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CRS-9
Germany (7.8%), the United States (6.1%), and the United Kingdom (5.7%).19 The
United States was decidedly the most important single country destination for exports
from SSA, purchasing 24.3% of the region’s exports, followed by the United
Kingdom (8.2%), France (6.1%), and Japan (5.5%).20 The entire European Union
accounted for 36.2% of SSA’s imports and 39.3% of its exports, a decline from
2002.21
U.S. Investment in Sub-Saharan Africa
Similar to trade, U.S. investment in Sub-Saharan Africa is a very small percent
of the worldwide U.S. total. At year-end 2004, the stock of U.S. direct investment
in sub-Saharan Africa was $13.51 billion, or less than 1% of the $2,063.9 billion in
total U.S. direct investment abroad.22 U.S. investment in Africa is heavily toward
natural resources: 12% of total U.S. investment in the mining sector (including
petroleum) worldwide is in Africa (including northern Africa), compared to 0.5% of
total U.S. investment in manufacturing worldwide, and only 0.04% of total
worldwide U.S. investment in finance. More than half of all U.S. direct investment
in Africa is in the petroleum industry.
Six countries accounted for 85% of the stock of U.S. direct investment in sub-
Saharan Africa at the end of 2004. South Africa was the leading location for U.S.
direct investment in sub-Saharan Africa, representing 37% of the total for the region.
About one-third of U.S. investment in South Africa is in manufacturing, and little is
in petroleum. South Africa was followed by Equatorial Guinea, Angola, Nigeria,
Chad, and Gabon, which represented 23%, 8%, 7%, 7%, and 4%, respectively, of the
stock of U.S. direct investment in the region.23 These latter five countries are
petroleum exporters.
In recent years, the United States has been the leading source of foreign direct
investment in sub-Saharan Africa. According to the United Nations Conference on
Trade and Development, the United States accounted for more than 37% of total
flows to sub-Saharan Africa from developed countries during the period 1996-2000,
followed by France (18%) and the United Kingdom (13%).24
19 Office of the U.S. Trade Representative, 2005 Comprehensive Report on U.S. Trade and
Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth
and Opportunity Act, May 2005. p. 24. Data were derived from the International Monetary
Fund, Direction of Trade Statistics 2004.
20 Ibid.
21 Ibid.
22 U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business, September 2005, pgs. 136, 153.
23 Ibid.
24 United Nations Conference on Trade and Development. World Investment Report 2002:
Transnational Corporations and Export Competitiveness, p. 51.

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CRS-10
AGOA: An Update
In May 2000, Congress approved legislation, the African Growth and
Opportunity Act (AGOA; Title I, Trade and Development Act of 2000; P.L.
106-200), to assist the economies of sub-Saharan Africa and to improve economic
relations between the United States and the region. This section examines the major
provisions of AGOA and what has happened since enactment.
Beneficiary Countries and Trade Benefits
Subtitle A of AGOA authorized the President to designate sub-Saharan African
countries as beneficiary countries eligible to receive duty-free treatment for certain
articles that are the growth, product, or manufacture of that country. It directed that
in designating a beneficiary country, the President must determine that the country
(1) has established, or is making continual progress toward establishing a market-
based economy and is taking other designated actions; (2) does not engage in
activities that undermine U.S. national security and foreign policy interests; and (3)
does not engage in gross violations of internationally recognized human rights or
provide support for international terrorism.
Subtitle B of AGOA describes trade-related benefits that are available to
AGOA-eligible countries. Among these benefits is preferential duty-free treatment
for certain articles under the U.S. Generalized System of Preferences (GSP). The
GSP program is a unilateral trade preference regime that allows certain products from
designated developing countries to enter the United States duty-free. Certain
categories of articles (see box) are identified in statute as ineligible for this duty-free
treatment, because they are “import sensitive.” AGOA provides that the President
can grant GSP duty-free treatment to all of these articles except one category (see
box, textiles and apparel). First, however, after receiving advice from the
International Trade Commission, the President must determine that an article is not
import-sensitive in the context of imports from AGOA beneficiaries. These
additional articles qualifying for GSP duty-free treatment have to be the growth,
product, or manufacture of an AGOA beneficiary country, and they must meet the
GSP rules of origin as amended under AGOA. AGOA beneficiaries are exempt from
certain limits under the GSP program on allowable duty-free imports (“competitive
need limitation”).

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“Import-sensitive” articles that are ineligible for preferences under GSP:
1. Textile and apparel articles which were not eligible articles for purposes of this
subchapter on January 1, 1994, as this subchapter was in effect on such date.
2. Watches, except those watches entered after June 30, 1989, that the President
specifically determines, after public notice and comment, will not cause material injury
to watch or watch band, strap, or bracelet manufacturing and assembly operations in the
United States or the United States insular possessions.
3. Import-sensitive electronic articles.
4. Footwear, handbags, luggage, flat goods, work gloves, and leather wearing apparel
which were not eligible articles for purposes of this subchapter on January 1, 1995, as this
subchapter was in effect on such date.
5. Import-sensitive semi-manufactured and manufactured glass products.
6. Any other articles which the President determines to be import-sensitive in the context
of the Generalized System of Preferences.
Textiles and Apparel. AGOA also allows duty-free and quota-free treatment
for textiles and apparel under any of the following conditions:
! Apparel must be assembled in one or more AGOA beneficiary
countries from U.S. fabric that was made from U.S. yarns and cut in
the United States;
! Apparel must be assembled in one or more AGOA beneficiary
countries from U.S. fabric that was made from U.S. yarns. The
apparel must be cut in an AGOA country and assembled using U.S.
thread; or
! Apparel must be assembled in one or more AGOA beneficiary
countries from fabric made in one or more AGOA beneficiary
countries from yarn made in the United States or an AGOA
beneficiary country. These imports were limited under AGOA to
1.5% of all U.S. imports (in aggregate square meter equivalents) in
FY2001, increasing to 3.5% over eight years. (This limit was later
amended; see below.) If a product is assembled in a less-developed
AGOA beneficiary country (defined as having a per capita gross
national product less than $1,500 in 1998 as measured by the World
Bank), that product qualifies for duty-free and quota-free treatment
through September 30, 2004 (this deadline was extended to 2007,
see below), regardless of the country of origin of the fabric.
To receive the duty-free and quota-free treatment for textile and apparel
products as described above, beneficiary countries must adopt an efficient visa
system to prevent unlawful transshipment. They also must work with the U.S.
Customs Service to report exports and prevent illegal trade. AGOA provided that the
Secretary of Commerce must monitor for surges in imports, with the possible
withdrawal of duty-free treatment if imports surge beyond a certain level.

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Developments Following Enactment of AGOA. AGOA was enacted on
May 18, 2000. On October 2, 2000, President Clinton recognized the first AGOA
beneficiary countries. He identified 34 out of the 48 sub-Saharan African countries
as eligible for AGOA benefits. On December 21, 2000, he granted GSP duty-free
treatment to more than 1,800 items from AGOA-eligible countries. These items were
selected after public review, advice from the International Trade Commission, and
interagency review and recommendation. (These 1,800 items are in addition to about
4,600 items already duty-free under GSP.)
During 2001, the Administration declared that 12 AGOA countries had met the
additional requirements for duty-free and quota-free treatment for apparel and
textiles. Ten of the 12 countries qualified for the provisions for less-developed
countries (LDCs) (see the third bullet on the preceding page). Early in 2001, in
response to interim regulations that the U.S. Customs Service had issued in October
2000 (65 Fed. Reg. 59,668), some legislators protested that the interim regulations
denied duty-free benefits for knit-to-shape articles, contrary to what they said was the
intent of the act.25
AGOA requires that the President monitor and report annually on the progress
of each country in meeting the terms for AGOA-eligibility. Under this requirement,
President Bush has made, at the end of each year, annual designations of the
countries eligible for AGOA benefits for the following year.
Amendments to AGOA. In 2002, AGOA was amended in the Trade Act of
2002 (P.L. 107-210). An important change pertained to the cap that AGOA had set
on apparel assembled in an AGOA country from fabric made in an AGOA country
(see the third bullet above). The Trade Act of 2002 doubled this cap, increasing it
to 7% in FY2008. The act, however, left the cap unchanged under the special rule
for lesser-developed countries. The act also allowed Namibia and Botswana to
qualify for the special rule for lesser-developed countries, even though their per
capita incomes exceed the limit set under AGOA.
The Trade Act of 2002 specifically extended AGOA benefits to knit-to-shape
articles and to garments cut in both the United States and an AGOA beneficiary
country (“hybrid cutting”). It also made a correction to extend AGOA benefits to
merino wool sweaters knit in AGOA beneficiary countries.
The Trade Act included other related provisions. It stated that U.S. workers
could be found eligible for trade adjustment assistance, if U.S. production shifted to
an AGOA beneficiary country and other conditions were met. It authorized $9.5
million to the Customs Service for textile transshipment enforcement, and specified
that two permanent positions be assigned to South Africa for AGOA enforcement
and additional travel funds be allocated for verification in sub-Saharan Africa. It also
25 On March 6, 2001, the Chairman and Ranking Member of the House Ways and Means
Committee and 8 other Members from both parties wrote to the Secretary of the Treasury
saying that the U.S. Customs Service interpretation of benefits for knit-to-shape articles was
“wrong.” See, Text: Ways and Means AGOA Letter to O’Neill, Inside U.S. Trade, March
9, 2001.

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CRS-13
required that $1.317 million of the Customs Service budget be spent on programs to
help sub-Saharan African countries develop visa and anti-transshipment systems.
In July 2004, AGOA was amended further by the AGOA Acceleration Act of
2004 (P.L. 108-274). This legislation extended the deadline for AGOA benefits to
2015, and it also extended the special rule for LDCs from September 2004 to
September 2007. It further stipulated that the cap on the volume of allowable U.S.
apparel imports under this rule would be decreased starting in the year beginning
September 2004. For apparel imports meeting the yarn forward rules of origin, the
cap is to remain at 7% until the expiration of the benefits in 2015. The legislation
also clarified certain apparel rules of origin to reflect the intent of Congress. Apparel
articles containing fabric from both the United States and AGOA beneficiary
countries were specifically allowed, as were otherwise eligible apparel articles
containing cuffs, collars, and other similar components that did not meet the strict
rules of origin. There was also clarification that ethnic printed fabric would qualify
for duty free treatment, as long as the fabric met certain standards regarding its size,
form, and design characteristics. Also, apparel articles containing fabrics and yarns
recognized in the North American Free Trade Agreement (NAFTA) as being in short
supply in the United States were declared as eligible for duty free treatment,
regardless of the source of such fabric and yarns. The legislation also increased the
maximum allowable content of non-regional or non-U.S. fibers or yarns in AGOA
eligible apparel imports, otherwise known as the de minimis rule, from 7% to 10%.
The AGOA Acceleration Act included a number of directives for the President.
One such directive was to provide agricultural technical assistance by assigning U.S.
personnel to at least 10 AGOA beneficiary countries, to help exporters meet U.S.
technical standards for agricultural imports. Another directed the President to
develop policies to encourage investment in agriculture and agricultural processing,
as well as investment in infrastructure projects aimed at improving transportation and
communication links both within Africa and between Africa and the United States.
There was also a directive to foster improved relationships between African and U.S.
customs and transportation authorities. An additional directive was to encourage
technical assistance and infrastructure projects to assist in the development of the
ecotourism industry in sub-Saharan Africa. Finally, another directed the President
to conduct a study on each beneficiary country, identifying potential sectors for
growth, barriers to such growth, and how U.S. technical assistance can assist each
country in overcoming these barriers.
In December 2004, the Miscellaneous Trade and Technical Corrections Act of
2003 (P.L. 108-429) was passed, which contained a technical correction to the
AGOA Acceleration Act. The legislation also allowed Mauritius to qualify for the
special rule for LDCs for the one year beginning October 1, 2004, with a cap of 5%
on eligible imports under this rule.
Current Beneficiaries. At present, 37 sub-Saharan African countries are
designated as AGOA-eligible. Of the 37 countries that may receive trade benefits,
24 have met the additional requirements to receive duty-free treatment for their
textile and apparel products, and of those, 23 qualify for the special rule for lesser-
developed countries (all but South Africa). See Table 1 for a list of sub-Saharan
African countries and their status under AGOA.

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Table 1. Country Status under AGOA
(as of January 1, 2005)
Status
Countries
Not Designated as Eligible
Burundi; Comoros; Central African Republic; Côte
(11)
d’Ivoire; Equatorial Guinea; Eritrea; Liberia; Somalia;
Sudan; Togo; Zimbabwe.
AGOA Eligible Only; Not
Angola; Burkina Faso; Chad; Republic of the Congo;
Eligible under Apparel
Democratic Republic of Congo; Djibouti; Gabon; The
Provision (13)
Gambia; Guinea; Guinea-Bissau; Mauritania; Sao Tome
and Principe; Seychelles.
AGOA Eligible, Eligible
South Africa
for Apparel Provision,
Special Rule Does Not
Apply (1)
AGOA Eligible, Eligible
Botswana; Benin; Cameroon; Cape Verde; Ethiopia;
under Apparel Provision,
Ghana; Kenya; Lesotho; Madagascar; Malawi; Mali;
and Special Rule Applies
Mauritius; Mozambique; Namibia; Niger; Nigeria;
(23)
Rwanda; Senegal; Sierra Leone; Swaziland; Tanzania;
Uganda; Zambia
Source: AGOA website maintained by the U.S. Department of Commerce at [http://www.agoa.gov].
AGOA Trade Trends. Imports under AGOA have comprised a significant
share of all U.S. imports from sub-Saharan Africa, and are growing. In 2004, AGOA
imports (including imports allowed under GSP) were $26.5 billion, or 74% of total
U.S. imports from sub-Saharan Africa of $35.8 billion. In the first seven months of
2005, AGOA imports rose to $23 billion, or 76% of total U.S. imports of $30.2
billion from the region. Considering the AGOA-eligible countries only, rather than
the entire region, U.S. imports under AGOA are an even higher 82% of all U.S.
imports from those countries. From 2003 to 2004, total AGOA imports (including
GSP) grew by 48%.26
Imports under AGOA have been predominately energy-related products. This
sector accounted for 89% of AGOA imports in 2004, which is a slight increase from
the 84% share in 2003. In the first seven months of 2005, energy-related products
comprised 94% of total AGOA imports. There are several possible reasons why the
share of energy products in AGOA imports has been increasing. First, the price of
energy products has been increasing at a faster rate relative to other products
imported under AGOA. The volume of AGOA energy imports has also increased,
from a total of approximately 343 million barrels of crude petroleum in 2003 to 474
million barrels in 2004.27 Also, 328 million barrels of energy products have been
imported in the first seven months of 2005, as compared to 308 million barrels during
26 Data from the International Trade Commission data website at [http://dataweb.usitc.gov].
27 Approximately 90% of sub-Saharan African energy exports under AGOA are crude
petroleum exports.

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the same period of 2004.28 Part of this increase in volume may be due to U.S. energy
importers diversifying their sources of petroleum imports. Also, AGOA itself may
be an incentive to import more energy from Africa, since it can enter the United
States duty free. Finally, Angola and Chad have only started exporting oil under
AGOA in 2004 — Angola first became eligible for AGOA in January 2004, and
Chad only began exporting oil in large quantities in 2004. Furthermore, it should be
noted that despite the energy sector’s increasing share of AGOA imports, other
sectors have seen increased values in AGOA exports. In 2004, the United States
imported $1,614.97 million in textiles and apparel under AGOA, as compared with
$1,196.5 million in 2003. There was also a more modest gain in agriculture imports
under AGOA, from $93.15 million in 2003 to $95.33 million in 2004.
Not surprisingly, since petroleum is by far the major product imported under
AGOA, Nigeria, a leading oil producer, is the major import supplier under AGOA.
Nigeria supplied 70% of AGOA imports in 2004, and together with Gabon (9%) and
South Africa (6%) accounted for 85% of all AGOA imports last year. In comparison,
15 AGOA-eligible countries accounted for less than 1% of AGOA imports, and of
those, two did not ship anything.
United States-Sub-Saharan Africa Trade and Economic
Cooperation Forum
Under AGOA, the President was required to establish within a year of
enactment, after consultation with Congress and the other governments concerned,
a United States-sub-Saharan Africa Trade and Economic Cooperation Forum
(hereafter called the Forum). The act stated that the President was to direct certain
top officials to host the first Forum meeting with their counterparts from AGOA-
eligible countries and countries attempting to meet AGOA eligibility requirements.29
The purpose of the Forum meeting is to “discuss expanding trade and investment
relations between the United States and sub-Saharan Africa and the implementation
of [AGOA] including encouraging joint ventures between small and large
businesses.”
AGOA also required the President to encourage non-governmental
organizations and the private sector to hold similar annual meetings, and it required
the President to instruct U.S. delegates to the Forum to promote a review of
HIV/AIDS in each sub-Saharan African country and the effect on economic
development. It required the President to meet, to the extent practicable, with heads
of governments of sub-Saharan African countries at least every two years to discuss
expanding trade and investment relations, and the first such meeting should be within
one year of enactment.
28 Ibid.
29 Representatives from appropriate sub-Saharan African regional organizations and
government officials from other appropriate countries in sub-Saharan Africa also could be
invited.

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CRS-16
AGOA was enacted May 18, 2000, and almost a year later, on May 16, 2001,
President Bush established the Forum and announced plans for its first meeting in
Washington in October 2001. The first Forum was held October 29-30, 2001, in
Washington, D.C. President Bush addressed the Forum and announced several
initiatives: (1) a $200 million Overseas Private Investment Corporation (OPIC)
support facility to give U.S. firms access to loans, guarantees, and political risk
insurance for investment projects; (2) a regional office of the Trade and Development
Agency (TDA) in Johannesburg to help attract new investment; and (3) the Trade for
African Development and Enterprise Program, initially funded at $15 million, to
establish regional hubs to help African businesses in the global market. (These
initiatives were established; see later sections.) Also at the first Forum, U.S. Trade
Representative Zoellick signed two agreements: (1) the U.S.-Nigeria Joint
Declaration on Electronic Commerce; and (2) a Trade and Investment Framework
Agreement with the Common Market for Eastern and Southern Africa.
The second Forum was held January 13-17, 2003, in Port Louis, Mauritius. In
a videotaped message, President Bush announced that he would ask Congress to
extend AGOA beyond its 2008 deadline. He also outlined other U.S. support for
Africa, including assignment of U.S. agricultural officials to the regional business
hubs established after the first Forum; a FY2004 budget request for a 50% increase
in development assistance; and an additional $200 million over five years for
education and teacher training to the region.
The second Forum had three segments. The segment for civil society was
attended by representatives from non-governmental organizations. The segment for
businesses included a trade exhibition. The segment for government officials was
attended by representatives from all 38 AGOA-eligible countries. U.S. Trade
Representative Zoellick led the 25-member U.S. delegation. Representative Thomas,
Chairman of the House Ways and Means Committee, led a separate congressional
delegation.
The third Forum was held December 9-10, 2003, in Washington, DC. Secretary
of State Colin Powell gave the opening address, in which he reiterated President
Bush’s support for extending AGOA beyond 2008. The third Forum also had three
segments, including a segment for government representatives, private sector
representatives, and civil society representatives.
The fourth Forum took place in Dakar, Senegal, on July 18-20. President Bush
addressed the Forum through videotaped remarks, and he announced the African
Global Competitiveness Initiative, which is to provide $200 million over the next
five years to improve the competitiveness of African countries and build their
capacity to trade. Secretary of State Condaleeza Rice attended the Forum, and she
announced the AGOA Diversification Fund, which is intended to provide U.S.
government agency resources to help African countries diversify their economies and
take advantage of a wider range of opportunities under AGOA. The theme of the
Forum was “Expanding and Diversifying Trade to Promote Growth and
Competitiveness.”

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CRS-17
Technical Assistance and Capacity-Building
AGOA legislation directed the President to target U.S. government technical
assistance and trade capacity building in AGOA beneficiary countries (Sec. 122).
This mandate includes assistance to both government and non-governmental actors.
The act directs the President to target technical assistance to governments- (1) to
liberalize trade and exports; (2) to harmonize laws and regulations with WTO
membership; (3) to engage in financial and fiscal restructuring, and (4) to promote
greater agribusiness linkages. The act also includes assistance for developing private
sector business associations and networks among U.S. and sub-Saharan African
enterprises. Technical assistance is also to be targeted to increasing the number of
reverse trade missions, increasing trade in services, addressing critical agricultural
policy issues, and building capabilities of African states to participate in the World
Trade Organization, generally, and particularly in services. In FY2004, the United
States spent approximately $293 million on trade capacity building assistance to sub-
Saharan Africa, 11% more than in FY2003.30
U.S. Agency for International Development (USAID). AGOA’s mandate
to encourage trade related technical assistance primarily is being implemented by
USAID’s Trade for African Development and Enterprise (TRADE) program. The
Agency’s TRADE initiative is designed to provide technical assistance to help
African countries reform their trade and investment policies, promote U.S.-African
business linkages, support African regional trade integration, and to take full
advantage of the provisions of AGOA. Three “Regional Hubs for Global
Competitiveness” have been established in Botswana, Ghana, and Kenya to further
technical assistance objectives.31 The TRADE initiative supplants USAID’s Africa
Trade and Investment Policy Program (ATRIP) which operated from 1998-2003.
Several AGOA-related initiatives originate from AID field offices. Capacity
building programs involving the Southern Africa Development Community (SADC)
have provided assistance to increase the level of SADC duty-free exports to the
United States under AGOA. USAID has also developed programs to assist in
customs reform, to promote local entrepreneurs, and to work for the establishment
of regional free-trade areas.
As mentioned above, AGOA encourages the establishment of private sector
linkages between U.S. and SSA businesses. To this end, two International Business
Linkage programs have been established by the Corporate Council on Africa with
funding provided by USAID. The linkage programs assist African companies to
prepare business plans, achieve International Standards Organization (ISO)
certification, participate in U.S.-led trade delegations, attend trade shows in the
United States, and identify public and private sector export financing. The linkage
programs also assist U.S. firms by identifying trade and investment opportunities in
30 USAID Trade Capacity Building Database, [http://www.qesdb.cdie.org/tcb/index.html];
accessed October 18, 2005.
31 The website for the hub in Gabarone, Botswana, is [http://www.satradehub.org/]; the
website for the hub in Accra, Ghana, is [http://www.watradehub.com/]; and the website for
the hub in Nairobi, Kenya, is [http://www.ecatradehub.com/].

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Africa, by steering U.S. firms to appropriate government and private sector contacts,
and by identifying sources of financing.
Assistant U.S. Trade Representative for Africa (AUSTRA). Sec. 117
of AGOA supported the creation of this position to serve as the “primary point of
contact in the executive branch for those persons engaged in trade between the
United States and sub-Saharan Africa,” and the chief adviser to the U.S. Trade
Representative (USTR) on trade and investment issues pertaining to Africa. This
position previously had been established by President Clinton in 1998. One primary
function of AUSTRA is to make the yearly determinations as to which countries are
eligible for AGOA benefits generally, and also its special textile and apparel benefits.
The AUSTRA also coordinates regional technical assistance seminars in Africa
composed of interagency delegations from the United States and their African
counterparts and funded by AID. Two of these forums held in Cameroon and
Uganda in March 2002 were attended by over 1000 delegates from countries in
central, eastern, and southern Africa. The AUSTRA also sponsors projects for WTO
training for SSA trade negotiators, provides support for the Trade Advisory
Committee on Africa, and maintains the [http://www.agoa.gov] website. The
AUSTRA coordinated the AGOA Competitiveness Report, which was submitted to
Congress on July 13, 2005. Mandated by the AGOA Acceleration Act of 2004, this
report provides an analysis of potential economic growth sectors in Africa, barriers
to growth in those sectors, and recommendations for U.S. technical assistance to
assist in overcoming those barriers.
Overseas Private Investment Corporation (OPIC). In 2001, OPIC
initiated the Africa Millennium Fund in response to Sec. 123 of AGOA. It committed
$227.5 million to the fund and seeks to leverage that amount with $122.5 million
from private investors for a total capitalization of $350 million. This initiative will
fund telecommunications, transport, electricity, water, and sanitation. The legislation
also calls for the fund to invest in projects from women entrepreneurs and to
“innovative investments that expand opportunities for women and maximize
employment opportunities for poor individuals.” At this point, the fund has not been
fully subscribed, and hence, its funds including the matching funds from OPIC have
not begun to be disbursed.
On October 29, 2001, President Bush announced the creation of a $200 million
OPIC support facility for additional projects. This facility is seen as a soft earmark
to distribute existing funds and does not require the creation of additional OPIC
instruments.32 In FY2003, OPIC invested in eleven new finance or insurance projects
with a value of approximately $635 million in Angola, Ghana, Kenya, Mozambique,
Nigeria, Sierra Leone, and South Africa, and one regional project.33 This is in
contrast to five new projects in FY2001 with a value of approximately $32 million.
The total stock of OPIC commitments in Africa reached $1.2 billion in 2003. Several
projects announced in FY2004 include a $250 million loan to provide medical
treatment and mortgage guarantees for HIV-positive homeowners in South Africa,
a $1.7 million loan for the production and processing of organically-grown cashews
32 Conversations with OPIC official, October 31, 2002; February 5, 2003.
33 2001 OPIC Annual Report, p.25, 40.

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in Guinea-Bissau, and a $1 million loan to expand a rawhide leather processing
operation in Mali.34
Export-Import Bank (Ex-Im). AGOA expressed the sense of Congress to
continue to expand the bank’s financial commitments to its loan, guarantee and
insurance programs to African countries. The legislation also commended the Bank’s
sub-Saharan Africa Advisory Committee for its work in fostering economic
cooperation between the United States and SSA. This committee was recently
reauthorized to September 30, 2005.35 The recently passed legislation reauthorizing
the Bank also created an Office of Africa that was charged with “increasing Bank
activities in Africa and increasing visibility among United States companies of
African markets for exports.”36
The Ex-Im Bank does not finance imports into the United States. However, it
does provide loans and guarantees for U.S. exports to the region, some of which can
be used to manufacture goods eligible for import to the United States under AGOA.
This financing can cover manufacturing equipment, the purchase of U.S. fabric, yarn,
and thread necessary for eligibility under AGOA textile provisions, or other raw
materials or components used for manufacturing. Ex-Im operates in 47 SSA
countries, although Bank activity and eligibility for specific programs vary according
to risk factors. In FY2003, Africa accounted for about 9% of the loans, 7% of the
loan guarantees, and 5% of the medium-term insurance instruments funded by the
Bank with a total exposure of $3.8 billion.37 By contrast in FY2002, Ex-Im made no
long-term loans to Africa, and Africa accounted for 2.3% of the loan guarantees and
5% of the medium-term insurance instruments funded by the Bank with a total
exposure of $3.2 billion.38 The largest Ex-Im transaction involving Africa in FY2003
was a long-term guarantee for a South African purchase of a commercial aircraft for
$173 million.39
In order to increase its lending activities in Africa, the Bank began its Africa
Pilot Program (STIPP) in 1999 to provide short-term export credit to sub-Saharan
African countries, many of whom are not eligible for other Ex-Im financial
instruments. This program was initially funded at $100 million. Ex-Im also
announced in 2000 a pilot program to provide export credits to African countries to
purchase U.S. HIV/AIDS medicines.40 This program allows countries to extend
payment of these pharmaceutical purchases to five years from standard repayment
terms of six months. These export credits have covered two contracts valued at $15
34 OPIC Press Release, December 8, 2004, May 20, 2004, November 16, 2004.
35 Export-Import Bank Reauthorization Act, 12 U.S.C. 635(b)(9)(B)(iii).
36 12 U.S.C. 635a.
37 Ex-Im Bank, 2003 Annual Report, pp. 18-22.
38 Ex-Im Bank, 2002 Annual Report, pp. 22-25.
39 2003 Annual Report, p. 29.
40 See “Short-Term Africa Pilot Program,” [http://www.exim.gov/africa-i/afr02fac.html].

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CRS-20
million for medicines and HIV detection equipment to Nigeria and Togo.41 In
addition, the Bank reported that as a result of Paris Club sovereign debt restructuring
negotiations, it had entered into agreements to restructure or to forgive public sector
debt obligations totaling $92 million with eight sub-Saharan African nations in
FY2002. These agreements wrote-off all of the Bank’s public sector debt exposure
in Mozambique, Tanzania, and Uganda.42
U.S. and Foreign Commercial Service (USFCS). In Sec. 125 of AGOA,
Congress found that USFCS presence in SSA had been reduced since the 1980s and
that the level of staffing in 1997 (seven officers in four countries) did not “adequately
service the needs of U.S. businesses attempting to do business in sub-Saharan
Africa.”43 Accordingly, the legislation required the posting of at least 20 USFCS
officers in not less than 10 SSA by December 31, 2001 “subject to the availability of
appropriations.”44 Presently, USFCS has officers in Côte d’Ivoire, Ghana, Kenya,
Nigeria, and three offices in South Africa with a total of 32 Commercial Officers,
Specialists, and Assistants. USFCS seeks to comply with AGOA by opening
additional offices in Botswana, Cameroon, Senegal, and Tanzania. In FY2003, the
agency received budget authority to hire eight additional USFCS officers to staff
these country offices.45
Commercial Service officers seek to facilitate the development of markets for
U.S. exporters in the countries where they are stationed. Officers assisting U.S.
exporters provide evaluations of potential business partners in the country, facilitate
U.S. business contacts with local firms, identify potential local distributors or agents
of U.S. exports, provide local financing options, and arrange partner background
checks. Commercial Service officers also prepare the Country Commercial Guides
which chronicle the business environment of the country.
Sec. 125(c) of the legislation directs the International Trade Administration
(ITA) to develop an initiative (a) to identify the best U.S. export prospects to the
region; (b) to identify tariff and non-tariff barriers that impede U.S. exports to Africa;
(c) undertake discussions with African states to increase market access for these
goods and services. This activity is being carried out by the ITA in its Market Access
and Compliance Unit (MAC). The Unit states that U.S. firms face entrenched tariff
and other trade barriers in many African countries, and that its current staff of nine
staffers is not adequate to cover the SSA region. In FY2003, MAC was given budget
authority to add four analysts and negotiators to address these issues.46
41 Conversation with Export-Import Bank Official, February 6, 2003.
42 Ex-Im, 2002 Annual Report, p. 39.
43 AGOA, Sec. 125(a)(4).
44 AGOA, Sec. 125(b).
45 International Trade Administration, “Budget Estimates FY2003,” Exhibit 13, p.99;
Conversation with ITA official, March 6, 2003.
46 International Trade Administration, “Budget Estimates FY2003,” Exhibit 13, p. 65;
Conversation with ITA official, March 6, 2003.

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CRS-21
Trade and Development Agency (TDA). Although not tasked with
specific directives in AGOA, the TDA contributes to trade capacity building in
Africa by funding project planning studies, including feasibility studies, training
programs and orientation visits (reverse trade missions in which foreign government
officials visit U.S. manufacturers). TDA targets activities that could generate
significant U.S. export potential, that could facilitate access to natural resources
important to the United States, and that are a priority for host nations and
international development efforts. In FY2002, TDA contracted 71 projects in SSA
for a total of $9.7 million, or approximately 13% of its program expenditures.47 At
the first AGOA Forum in October 2001, the President promised a regional TDA
office in Johannesburg, South Africa. TDA subsequently established an office there.
Multilateral Initiatives
In addition to domestic agency programs, the United States participates in
several multilateral institutions that provide trade capacity building in Africa and
other developing country regions. Two that operate in Africa are the Integrated
Framework and the Joint Integrated Technical Assistance Program.
Integrated Framework. The Integrated Framework (IF) was created by six
multilateral institutions [the International Monetary Fund (IMF), the International
Trade Center (ITC), the United Nations Commission on Trade and Development
(UNCTAD), the United Nations Development Program (UNDP), the World Bank
and the World Trade Organization (WTO)] to coordinate their development
activities to bolster the developing countries’ performance in the multilateral trading
system. Its activities are designed to encourage developing countries to integrate
trade development into their development assistance programs, known as Poverty
Reduction Strategy Papers (PRSP). After the completion of a three-nation pilot
program that included the African countries of Madagascar and Mauritania and a
third, non-African country, the IF is being expanded to 11 other nations including
Malawi, Senegal, Lesotho, Ethiopia, Eritrea, Djibouti, Burundi, Guinea, and Mali.
As of December 2003, total contributions to the IF trust fund amounted to $19.4
million, with contributions of $200,000 from the United States.48
The nations involved with the IF implement this process with the World Bank.
First, the Bank prepares a diagnostic trade integration study that assesses the
obstacles to a country’s full integration to the multilateral trading system and its
economic competitiveness. From this survey, an action plan is developed by the
Bank, in consultation with the local governments and businesses, detailing technical
assistance that can overcome these obstacles. Then a country’s PRSP is amended to
47 U.S. Trade and Development Agency, 2002 Annual Report,
[http://www.tda.gov/abouttda/report2002/pabr_africa-me.html]), accessed January 22, 2003.
48 Integrated Framework website, [http://www.integratedframework.org/status.htm].
Accessed December 30, 2004.

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reflect these technical assistance priorities in order to be considered for funding by
donor organizations.49
Several issues have been raised with regard to the IF. First, coordination of
resources to avoid duplication of effort has been cited as a concern, both within the
IF partner organizations and between the IF and bilateral donor organizations. In
many countries, coordination is an ad hoc activity, achieved as a result of personal
relationships rather through any institutional coordination. A second concern is that
heightened expectations among the recipient nations may not be fulfilled by the IF
process. Thus far, IF work has centered on preparing strategies for implementation.
Yet the details of the implementation strategy for these proposals have not been
worked out, thus raising questions as to whether they will be executed by the IF
organizations or by bilateral donors.50
Joint Integrated Technical Assistance Program (JITAP). An initiative
of the WTO, ITC, and UNCTAD, this program works to strengthen human and
institutional capacity specifically in the African states of Benin, Burkina Faso, Côte
d’Ivoire, Ghana, Kenya, Tanzania, Tunisia, and Uganda. New states included in the
launch of JITAP II in January 2003 include Botswana, Cameroon, Malawi, Mali,
Mauritania, Mozambique, Senegal, and Zambia.51 This program assists participating
countries with negotiations in the Doha round; and advises on implementation of the
existing Uruguay Round agreements, including assistance with the adjustment of
national legislation and regulation; the development of effective customs programs;
and the provision of effective export promotion and financing strategies.52 Ten donor
nations (Canada, Denmark, Finland, France, Germany, Japan, the Netherlands,
Norway, Sweden, and the United Kingdom) have contributed approximately $6
million to this fund as of April 2004.53
Regional Cooperation and Free Trade Agreements
AGOA declares the policy that free trade agreements (FTAs) should be
negotiated, where feasible, between interested countries in SSA and the United States
in order to serve as a catalyst for increasing trade and investment. In addition,
regional economic agreements have also been encouraged. Attention in this regard
has focused on South Africa and regional economic organizations to which it
belongs. On November 4, 2002, USTR Robert B. Zoellick notified Congress that
negotiations would be initiated with the members of the Southern African Customs
Union (SACU). These negotiations began in June 2003.
49 Ibid.
50 Discussion among participants of the Washington International Trade Association
program on Trade Capacity Building Initiatives, Washington D.C., November 6, 2002.
51 WTO News: “Donors pledge substantial support to JITAP II,” December 20, 2002,
[http://www.wto.org/english/news_e/pres02_e/pr328_e.htm].
52 “Joint Integrated Technical Assistance Program” [http://www.jitap.org/]
53 “JITAP Progress Report,” May 17, 2004.

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Southern African Customs Union FTA (SACU).54 SACU is a customs
union composed of South Africa, Botswana, Lesotho, Namibia, and Swaziland. The
original SACU agreement dates from 1910 and was revised in 1969. A new
agreement to more fully integrate the smaller states into decision-making for the
area, which was previously dominated by South Africa, was signed on October 21,
2002. The agreement is characterized by free movement of goods within SACU, a
common external tariff, and the common revenue pool which is apportioned among
the member states.
A large degree of economic integration exists among the SACU states because
of the agreement, perhaps contributing to the U.S. decision to negotiate an FTA with
SACU, rather than just South Africa. However, South Africa is the dominant
economy of the region, accounting for 87% of the population, and 92 % of the gross
domestic product of the customs area. U.S. exports to SACU totaled $2.8 billion in
2003, led by aircraft, vehicles, construction and agricultural equipment, and
computers. U.S. imports from SACU totaled $5.6 billion, composed of minerals
such as platinum, diamonds, and titanium, textiles and apparel, vehicles, and
automotive parts.55
Potential issues in negotiating an FTA with SACU concern the openness of the
South African telecommunications industry; services trade; intellectual property
rights, especially with regard to the sensitive issue access to HIV/AIDS medicines;
and the existence of certain import, export, and exchange controls in the SACU
countries. The ability to negotiate and to implement an FTA with the United States
may also become an issue to resolve, especially among the smaller states of SACU.
South Africa currently has a free trade agreement with the European Union that,
while not including the other members of SACU, is considered by some observers
to put U.S. firms at a competitive disadvantage compared to their European
counterparts.
Although discussion of potential partners for free-trade agreements revolves
around South Africa and SACU, several other regional groupings may prove to be
partners for future trade agreements with the United States. The Southern African
Development Community (SADC), the Common Market for Eastern and Southern
Africa (COMESA), the East African Community (EAC), and the West African
Economic and Monetary Union (WAEMU) have all taken steps to begin the process
of economic integration, either through trade liberalization or through steps to
promote monetary union. While these groups are being encouraged in their attempts
at regional integration, they are not immediate prospects for FTAs with the United
States. Background on these groups appears in an Appendix.
U.S. Trade and Investment Framework Agreements (TIFA). The
United States has negotiated TIFAs with Ghana, Nigeria, and South Africa, and with
the COMESA and WAEMU regional arrangements. Generally, TIFAs commit the
54 For more information, see CRS Report RS21387, United States - Southern African
Customs Union (SACU) Free Trade Agreement: Background and Potential Issues, by
Danielle Langton.
55 U.S. International Trade Commission data website at [http://dataweb.usitc.gov]

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CRS-24
signatories to expand trade of goods and services, to encourage private sector
investment, and to resolve problems and disputes through consultation and dialogue.
To facilitate these objectives, the signatories of each agreement have established a
Council on Trade and Investment to provide a venue for consultation on trade issues
of interest or concern to the parties, and to work toward the removal of impediments
to trade and investment flows. TIFAs are often considered to be first steps to the
negotiation of free trade agreements.
U.S. Bilateral Investment Treaties (BIT). The United States has signed
BITs with Cameroon, Republic of the Congo (Brazzaville), Democratic Republic of
Congo (Kinshasa), Mozambique, and Senegal. The goals of the BIT are to protect
U.S. investments abroad, and to encourage market oriented domestic policy in host
countries. Generally, BITs ensure national treatment for U.S. investments, limits on
expropriations, free repatriation of funds, limitations on the imposition of trade
distorting or inefficient practices on U.S. investments-including requirements in
hiring, and the right of submission of investment disputes to international arbitration.
These treaties are promoted by the U.S. government as a method of encouraging the
development of international law and trade standards within the partner country.
New Partnership for Africa’s Development (NEPAD). NEPAD is a key
policy vehicle of the African Union (AU), whose leaders formulated and adopted the
initiative in July 2001. Described by its proponents as a multi-sector, sustainable
development policy framework, NEPAD seeks to reduce poverty, increase economic
growth, and improve socio-economic development prospects across Africa. Major
NEPAD aims are to attract greater investment and development aid to Africa, reduce
the continent’s debt levels, and broaden global market access for African exports.
NEPAD emphasizes increased democratization, political accountability, and
transparency in governance in African states as primary means of achieving its
goals.56
European Union Activity. By way of comparison, the European Union (EU)
has also been active in promoting trade between itself and the countries of sub-
Saharan Africa. The EU-South Africa Agreement on Trade, Development, and
Cooperation entered into force on January 1, 2000. This agreement creates a free-
trade area between the participants during a 12-year asymmetric transition period.
The EU pledges to remove tariffs on 95% of imports from South Africa during a 10-
year period with most products granted duty-free status in 2002. South Africa will
remove duties on 86% of its tariff lines during a 12-year period with most
eliminations occurring between 2006-2012. Notably, the agreement does not provide
tariff relief to several important South African agricultural exports, nor to aluminum.
Cotonou Agreement. This agreement, signed in Cotonou, Benin between
the European Union and 71 African, Caribbean, and Pacific nations (ACP) in
February 2000, extends non-reciprocal, duty-free access for industrial and processed
agricultural goods to the EU market granted by the 4th Lomé Convention to the end
56 This paragraph was prepared by Nicolas Cook, Analyst in African Affairs. For more
information, see CRS Report RS21353, New Partnership for Africa’s Development
(NEPAD) and CRS Report RS21332, The African Union.

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of 2007. The extent of the duty-free access conferred by Cotonou was subsequently
enhanced in March 2001 by the “Everything but Arms” initiative, which granted
developing countries tariff-free access to all goods, except for sugar, rice, and
bananas, for which products a tariff-rate quota system will be maintained during a
phase-out period ending in 2009. Provisions of the Cotonou Agreement call for the
negotiation of trade liberalization agreements with regional economic partnerships
that could include the regional African groupings discussed below. Preliminary
negotiations on the Regional Economic Partnership Agreements began on September
27, 2002.
AGOA: Future Challenges
Several issues may be important to Congress in the oversight of AGOA. These
issues concern the termination of the WTO Multi Fibre Agreement, the
diversification of beneficiary country and industry participants, the continued
eligibility of certain countries for AGOA benefits, and the HIV/AIDS epidemic.
! Termination of the Multi Fibre Agreement. Article 2 of the
WTO’s Agreement on Textiles and Clothing (ATC) terminates the
worldwide system of quotas for textile and apparel trade as of
January 1, 2005. Some observers are concerned that this agreement
will cause investors in apparel production to leave Africa for lower-
cost apparel producers such as China. Although the quota advantage
under AGOA no longer exists, AGOA beneficiaries still have the
advantage of duty free entry into the U.S. market. MFN duties on
textiles and apparel articles average around 18%, which may provide
enough advantage to help Africa maintain its export volume. There
is evidence that the ATC has caused a reduction in Africa’s apparel
trade with the United States. Many foreign-owned apparel factories
have closed, and AGOA imports from the first seven months of
2005 declined by 11% compared to the same time period in 2004.
This is not encouraging news for the apparel industry in Africa, but
there are anecdotes of some factories continuing operations and
becoming more competitive. Some observers have commented that
the end of the apparel quota will likely result in a less robust African
apparel industry, but not cause the industry’s end.
! Diversification of AGOA Exports. While textile and
manufacturing industries make up a growing part of U.S. imports
under AGOA, these imports are dwarfed by AGOA imports from the
petroleum and mining sectors. These industries are highly
capitalized and do not provide extensive employment opportunities
for African workers. AGOA benefits are also concentrated in few
countries with 85% of AGOA imports originating in Nigeria,
Angola, and Gabon. Moreover, several AGOA-eligible countries
export very little under the program. If a goal of the program is to
increase African country participation, it may be achieved through
targeted trade capacity building and technical assistance.
Agriculture is an important source of income for African workers,

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CRS-26
and increasing agriculture exports under AGOA may help raise
incomes and spur economic growth. African countries may also
begin to export light manufactures, with improved capacity,
infrastructure, and policies to encourage investment.
! Eligibility Standards. A country’s eligibility for AGOA benefits
may become the subject of controversy. Some observers feel that the
President must strictly enforce eligibility requirements to ensure
continued adherence to reforms. However, others have cited the
unpredictability of a country’s AGOA benefits from year to year as
a source of investment risk, and have suggested minimum eligibility
terms of greater than the current one year. Several countries have
been considered candidates for losing AGOA eligibility. In
December 2003, the President declared Eritrea and the Central
African Republic to be ineligible for AGOA. In December 2004,
Cote d’Ivoire was declared ineligible as well. Lesotho, which is
considered an AGOA success story, has been the subject of
persistent complaints from indigenous labor groups regarding
working conditions in newly developed textile plants. Swaziland has
received warnings from the State Department that its human rights
record does not meet AGOA eligibility requirements. Other
countries, such as Gabon and Madagascar, recently have conducted
disputed elections. Several countries have questionable commitment
to privatization and tariff reform.
! HIV/AIDS. The HIV/AIDS pandemic is destabilizing the
economies of Africa and threatens any progress achieved by AGOA
as additional income is spent, not to raising living standards, but to
treat a population afflicted with the disease. Due to the disease, life
expectancy is falling in several AGOA eligible countries and in the
region as a whole. HIV/AIDS disproportionally strikes some of the
most productive members of society such as skilled workers,
professionals and teachers. Even with the advantages that AGOA
preferences confer, investors may be deterred from the region by
high medical costs, by constant replacement of workers stricken with
the disease and the attendant training costs, and by the destabilizing
risks associated with a society containing a large, dying population.
! Small Business Participation. Small business accounts for about
55% of the U.S. GDP, and employs a large portion of American
workers. U.S. small businesses, however, only participate in limited
trade with Africa, and reportedly very few in the small business
community know about AGOA. Some observers have noted that
U.S. small businesses may benefit from AGOA, and in the process
help provide avenues for diversifying African exports. Small
business is also important in Africa, and increased partnership may
result in better participation on both continents. The U.S.
government may become involved in increasing awareness of
AGOA among the small business community, and providing
opportunities for partnership.

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CRS-27
Appendix:
Regional Economic Integration Among Sub-
Saharan Africa Nations
Southern African Development Community (SADC). This group is
composed of the nations of Angola, Botswana, Democratic Republic of Congo,
Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa,
Swaziland, Tanzania, Zambia, and Zimbabwe. Originally formed by front-line states
to lessen economic dependence on the apartheid regime in South Africa, the group
expanded to include South Africa in 1994. The 1996 Protocol on Trade committed
each signatory to remove duties and non-tariff barriers to SADC members within 12
years, to provide national treatment for each other’s goods, to bind existing tariffs at
current levels.
The economic dominance of South Africa makes economic integration of the
SADC region more problematic. South Africa accounts for 82% of the GDP of the
region, and it comprises 62% of the region’s intra-SADC imports and 70% of the
SADC region’s exports.57 With per-capita income at approximately $3,000, it dwarfs
the average per-capita income of many of the other states. In addition, smaller states
within SADC are concerned about their lack of economic competitiveness as their
home markets are opened up to goods from South Africa. The reliance of many
governments on duty revenue has also become a source of concern in implementing
reductions of tariff barriers. The relationship between SADC and the Southern
African Customs Union (SACU), especially concerning SACU’s greater access to the
South African market, has become a concern for SACU countries because they fear
the loss of market share to SADC countries.
Common Market for Eastern and Southern Africa (COMESA).
Founded in 1982 as the Preferential Trade Area of Eastern and Southern Africa,
current member states of the COMESA include Angola, Burundi, Comoros, Djibouti,
Ethiopia, Kenya, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Somalia, Sudan,
Swaziland, Uganda, Zaire, Zambia and Zimbabwe. On October 31, 2000, nine states
of COMESA (Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan,
Zambia and Zimbabwe) launched a free trade area that eliminated tariffs on goods
originating in the member states. These states have also worked towards establishing
coordinated policies in other areas such as rules-of-origin, dispute settlement,
applications of safeguard measures, and uniform customs procedures. The group
aims for a customs union with a common external tariff by 2004. The goal of
monetary union by 2025 is expected to be advanced by the introduction of limited
currency convertibility and improved coordination of fiscal and monetary policy
during this time period.
Political and economic difficulties are facing several countries within the
COMESA community. Civil war continues in the Democratic Republic of Congo;
57 Beverly M. Carl, Trade and the Developing World in the 21st Century, (Ardsley, NY:
Transnational Publishers, 2001) p. 205.

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Angola recently emerged from civil strife; and Zimbabwe is facing economic
collapse. Drought and famine are also plaguing countries in the region. In addition,
several countries have withdrawn from COMESA: Tanzania in 2000, and
Mozambique and Lesotho in 1997.
East African Community (EAC). Comprised of Kenya, Uganda, and
Tanzania, this organization seeks to revive historic tariff-free trade that had been
established among the three British colonies in 1923. However, this cooperation
broke down in the 1970s due to widespread transhipments and the varied economic
paths of its participants. The three countries re-established the community in 1999
and have made plans for an asymmetric tariff schedule, in which Kenya will
immediately reduce its tariff to zero, while Uganda and Tanzania will have four years
in which to reciprocate. The outlook for this grouping is also complicated by a
dominant country presence. Most industrial trade in the bloc originates from Kenya,
and there is little bilateral trade between Tanzania and Uganda. Nonetheless, two
neighboring countries, Rwanda and Burundi, have been invited to join.
West African Economic and Monetary Union (WAEMU). This grouping
was originally created to administer the CFA franc (Communauté financière
africaine), a currency formerly tied to the French franc prior to its disappearance in
2000 (It is still backed by the French treasury). Its members are Benin, Burkina Faso,
Côte d’Ivoire, Mali, Niger, Senegal, Togo, and Guinea-Bissau, the sole non-
francophone member. The member states have espoused the long-term goal of a full
economic union with a common market, macroeconomic convergence, regulatory
harmonization, and a common investment policy. A preferential tariff arrangement
was concluded for member states in 1995, and a customs union with a common
external tariff of 22% became operational in 2000. While the WAEMU countries
have achieved a relatively high degree of integration, it has been reported that intra-
member trade has not greatly expanded. As in other areas, regional conflicts have
interrupted the consolidation of economic gains.

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