Renaissance Capital: Why the AfCFTA, AGOA won't work without manufacturing on the continent

The African Growth and Opportunity Act (AGOA) is set to expire in 2025, prompting discussions on the future of trade relations between the United States and African countries. Charles Robertson, Global Chief Economist at Renaissance Capital, highlighted the significant changes in the trade landscape since AGOA's inception in 2000, particularly with China's rise as a key trade partner for African nations. Robertson emphasized the need for a shift towards promoting manufacturing and infrastructure development to support trade growth. He noted that AGOA has primarily focused on raw material exports, rather than value-added manufacturing, posing challenges for sustained economic development. Reflecting on past efforts to boost manufacturing through initiatives like Power Africa, Robertson acknowledged the limited impact on overall industrial growth. Thus, he underscored the importance of enhancing electricity access and investing in infrastructure to drive manufacturing competitiveness. Robertson also discussed the African Continental Free Trade Area (AfCFTA) as an opportunity to strengthen trade partnerships, emphasizing the critical role of manufacturing in driving intra-African trade. However, he cautioned that free trade agreements alone are insufficient without robust manufacturing capabilities. Drawing parallels to successful models in Asia, Robertson advocated for long-term strategies, including investment in education, family planning, and infrastructure to foster economic growth. Regarding Africa's negotiation power in international trade, Robertson highlighted the need for self-reliance and domestic economic development to enhance the continent's bargaining position. He emphasized the importance of building a strong domestic manufacturing base to drive export competitiveness and attract foreign investment. In conclusion, Robertson emphasized the significance of prioritizing long-term economic strategies over short-term gains to unlock Africa's trade potential and strengthen its position in the global marketplace.