For every country, it is imperative that they develop their economy, and for Uganda, the road continues to be a rough one. As Ugandans, we have most certainly seen a few initiatives to boost the country’s economy; from the vanilla and moringa boom a few years back to the president’s initiative to export value-added products instead of raw material. Even the Buy Uganda Build Uganda (BUBU) initiative came up in a bid for a boosted economy. Amongst all this, however, the AGOA trade deals might have been our path to salvation.
The African Growth and Opportunity Act (AGOA), is a pivotal U.S. trade act enacted in 2000 designed to enhance market access to the United States for qualifying Sub-Saharan countries. It allows these countries to export a wide range of products to the United States Duty-Free, with the primary goal of stimulating economic elevation and development through increased trade and investment with the States.
For Uganda, a landlocked country, AGOA has been very beneficial by allowing the privilege of exporting our products to the U.S. without the burden of tariffs. The arrangement has been particularly beneficial for Uganda’s agricultural sector, which constitutes a significant portion of the country’s economy. Products such as coffee, tea and textiles have found lucrative markets in the States, contributing to the economic growth of many Ugandan farmers and small businesses.
The AGOA program has played a crucial role in diversifying Uganda’s export base, reducing the country’s dependence on traditional markets and integrating into the global economy. Together with the duty-free access, AGOA has made Ugandan products more competitive in the U.S. market, fostering an environment for growth and sustainability for local businesses.
In a significant blow to its economic prospects, however, Uganda was removed from the AGOA program effective January 1, 2024. This decision was part of the broader move by the United States which also removed the Central African Republic, Gabon and Niger from the program citing “gross violations of internationally recognized human rights” as the primary reason for this action. Specifically, they pointed to Uganda’s controversial Anti-Homosexuality Act passed in May 2023.
This Anti-Homosexuality Act has been widely criticized both locally and internationally for its harsh, which is to say, life imprisonment and, in some cases, the death penalty for same-sex conduct. The enactment of this law sparked a significant backlash from the international community, leading to Uganda’s expulsion from AGOA. U.S. President Joe Biden, in a letter to Congress, emphasized that despite intensive engagement, Uganda had failed to address the U.S. concerns about its compliance with AGOA’s eligibility criteria.
That said, the expulsion from AGOA has come with significant ramifications for Uganda’s economy. The loss of duty-free access to the U.S. market means that Ugandan exports will now face tariffs, making them less competitive compared to those from AGOA-eligible countries. This shift is likely to result in a decrease in export volumes, affecting farmers and small businesses that have relied on the program to reach the U.S. market.
The agricultural sector, which employs about 72% of Uganda’s workforce, is particularly vulnerable. Over 80% of Uganda’s exports to the U.S. under AGOA were agricultural products. The imposition of tariffs could lead to job losses, reduced income for farmers and a potential decline in economic growth. The overall impact extends to the broader economy, potentially stalling Uganda’s progress towards economic diversification and poverty reduction.
In response to the suspension, Uganda has embarked on a determined lobbying campaign to regain its AGOA eligibility. Senior Presidential Advisor on AGOA and Trade, Susan Muhwezi and other government officials have been actively engaging with U.S. representatives to address human rights concerns and advocate for Uganda’s reinstatement into the program
Uganda has argued that the suspension is detrimental not just to the economy but also to the livelihoods of many Ugandans who benefit from the trade opportunities provided by AGOA. The government has emphasized its commitment to addressing the U.S. concerns and improving its human rights record. However, the U.S. administration has maintained a firm stance, requiring substantial and verifiable improvements in Uganda’s human rights practices before considering reinstatement.
Despite Uganda’s persistent efforts, the response from the U.S. has remained consistent. The U.S. government has made it clear that reinstatement into AGOA is contingent upon Uganda making significant progress in protecting human rights and adhering to democratic principles. The suspension is seen as a necessary measure to pressure Uganda into addressing the issues highlighted by the international community.
President Biden’s administration has underscored that the decision to suspend Uganda from AGOA is aligned with the U.S. commitment to promoting human rights globally. The administration has also indicated that any future consideration for reinstatement will be based on tangible and sustained improvements in Uganda’s human rights record.
Uganda’s removal from AGOA marks a challenging period for the country as it navigates the economic fallout and works towards addressing the human rights concerns raised by the international community. The AGOA program has been instrumental in supporting Uganda’s economic growth and diversification efforts, and its loss presents significant hurdles.
The Ugandan government remains hopeful and continues to lobby for reinstatement, recognizing the importance of AGOA for its economic strategy. However, the path to rejoining AGOA requires addressing the fundamental issues that led to the suspension. This involves not only legal and policy reforms but also a commitment to upholding human rights and democratic principles.
As Uganda moves forward, the lessons learned from this experience will be crucial in shaping its approach to international relations and trade. The country’s ability to adapt, reform, and engage constructively with the global community will determine its success in overcoming the current challenges and securing a prosperous future.
