An Assessment of the Effect of African Growth And Opportunity Act on Ethiopia’s Export Performance to the United States of America
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Date
2014-05
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Addis Ababa University
Abstract
African Growth Opportunity Act (AGOA) is a United States initiative which provides preferential access to selected Sub-Saharan African Countries products in the U.S. market since 2000. Ethiopia is one of the SSA beneficiary countries with low utilization of the AGOA. This study sought to assess the effect of African Growth and Opportunity Act (AGOA) on Ethiopia’s export performance to the United States and identified reasons for low performance. To this effect, the study made use of descriptive and causal research designs and applied a mix of both qualitative and quantitative research methods using panel data of 12 years after and 8 years before the enactment of AGOA. It used in-depth interview to validate findings. The result shows that AGOA has a positive effect on overall export performance of Ethiopia to the U.S. However, the level of utilization against the opportunity and in relation to other beneficiary Sub-Saharan African Countries is low. There are both demand and supply side constraints that contributed to the low utilization. Therefore, this study recommends that addressing the demand side constraints through revision of requirements; emphasis for agricultural sector and extension of the AGOA period by the U.S. In addition, Ethiopia should address the supply side constraints through development & implementation of the National AGOA response strategy to identify real time challenges and solve them to respond to AGOA opportunity better. This would include addressing challenges related to exporters’ capacity, development of infrastructure as well as creation of enabling environment.
Key Words: AGOA, SSA, USA, Ethiopia, Preferential Market, Utilization
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Keywords
AGOA, SSA, USA, Ethiopia, Preferential Market, Utilization