The effects of the African Growth and Opportunity Act (AGOA): Evidence from Nigeria and South Africa exports
The African Growth and Opportunity Act was signed into law on May 18, 2000, as a Title One of the Trade and Development Act of 2000. Among other things, it was supposed to provide reforming African countries with the most liberal access to the U.S market that is available to any country or region with which the United States does not have a previous free market agreement. The following research work analyzes the trade data between two Sub-Saharan African countries (Nigeria and South Africa) and the United States. Twenty years’ trade data between the two African countries and the United States were obtained from the U.S International Trade Data. The data were divided into Pre- AGOA (1990-1999), ten years’ trade before the trade act, and Post-AGOA (2001-2010), ten years after the trade act. The division of the data was done in order to ascertain the direction of trade before and after the act to determine if the trade Act had any significant effect on either country’s export. The analysis of the data shows that export from both countries to the United States rose substantially with a rise of 312% in mean difference between pre-AGOA and post-AGOA Nigeria and 193.66% between pre-AGOA and post-AGOA South Africa. Furthermore, South Africa recorded a continuous, positive trade balance over the ten years after AGOA, unlike the nine years’ trade deficit it recorded in pre-AGOA. Based on the results of the analysis, it was concluded that it was imperative to extend the trade act beyond its expiration of 2015 in order to support and encourage more trade openings between the two countries and the United States.