It is an honor to be here today to discuss AGOA and the tremendous opportunity it presents to Botswana. On June 29 of 2015 President Obama enacted legislation reauthorizing AGOA, providing unilateral duty-free access on approximately 6,500 product tariff lines to the U.S. market.
AGOA is the cornerstone trade initiative with sub-Saharan Africa. It is an important symbol of the United States’ larger partnership with sub-Saharan Africa and of our commitment to supporting the region’s long-term economic growth. Through the program’s eligibility criteria, AGOA has helped encourage the governance and economic reforms needed to support economic growth and facilitate investment.
Looking at the last 15 years since AGOA was introduced, we can see many concrete economic benefits. Highlights include the creation of over 300,000 jobs across AGOA countries, the fourfold growth of non-oil exports, and the establishment of new value-added export-oriented industries, including apparel, food processing, and the automotive sector.
AGOA is particularly important for Botswana’s companies because it provides an opportunity to take your business to the next level. It takes a globally-competitive company to meet the timeline, quality, and price demands of the U.S. market. AGOA provides a head start over competitors from Asia and other regions, but the competition remains fierce. And that is a good thing because we need globally-competitive companies to lead Botswana to diversification through exports.
While the decision to extend AGOA was under consideration, we held bilateral consultations and Batswana stakeholders asked us for an AGOA time horizon longer than the five year window under the previous legislation. We provided this input to Washington and they acted on this request and extended AGOA for 10 years. This is important because it provides enough of a time window for investors to set up export operations and take advantage of the unilateral tariff-free market access. No previous AGOA legislation has offered such a long time horizon, and I urge the private sector to take advantage of this rare and exciting opportunity.
Under the new legislation, the U.S. Congress called on eligible AGOA countries to develop biennial utilization strategies to more effectively and strategically take advantage of benefits under AGOA. Later this morning, George Makore of the Southern African Trade Hub will present on export strategy best practices to ensure your hard work in developing a strategy translates into increased exports. To launch this discussion, I would like to emphasize three hallmarks of an effective strategy. First, it is grounded in comparative advantages; second, it is derived from robust public-private dialogue; and third, an empowered champion delineates roles and responsibilities and implements needed strategy policy reforms.
Now we cannot talk about AGOA as a standalone program, because it fits into the U.S. Government’s broader engagement and technical assistance designed to spur economic growth, trade, and investment in the region. I will touch on key programs to explain the breadth of our technical assistance designed to complement the AGOA program.
Within this framework, the USAID Southern Africa Trade Hub has increased international competitiveness, intra-regional trade and food security in Southern Africa. The Trade Hub is supported by USAID and works closely with SADC. Through various regional, national and cross-cutting initiatives, the Trade Hub is working with Botswana to reduce the cost of doing business, improve the investment climate and facilitate the adoption of modern trade facilitation tools.
Since 2011, the Southern African Trade Hub has been working with Botswana stakeholders on the development of a National Single Window (NSW). An NSW, connecting all stakeholders in a single electronic data information exchange platform, will substantially reduce the time and cost of doing business and promote increased trade. In January of 2015 the Cabinet approved the establishment of an NSW for Botswana through a Presidential Decree, and identified BURS as the lead agency with authority to coordinate all activities related to the development and implementation of NSW.
Recognizing the need to modernize and simplify its customs procedures, BURS has also begun the process of drafting a new Customs Act. To assist in the drafting process, the Trade Hub provided a legal review advisor to work through proposed legislation with business analysts and legal advisors from BURS to ensure that modern trade facilitation tools such as e-certificate of origin, valuation, and National Single Window are incorporated into the legislative draft.
Initiatives like the National Single Window and customs modernization are designed to assist Botswana and indirectly the region with increasing intra-regional trade and global export competitiveness, while improving trade and transportation facilitation measures and advancing overall trade and investment.
The cornerstone of U.S. government economic growth and development support to Botswana has been the Trade Hub. This program will conclude at the end of the month but will be continued under the USAID Southern Africa Trade and Investment Hub (SATIH), which will begin implementation soon. SATIH is a five-year, $80-86 million program to increase the region’s trade and improve food security in Southern Africa and will continue much of the impactful work done under the old Trade Hub.
Through the U.S. Trade and Development agency, we are providing assistance to the government on procurement best practices, including life cycle cost analysis, to help officials ensure the best value for every pula spent and strengthen infrastructure, which is key to private sector growth. Botswana was selected as USTDA’s first partner country under the Global Procurement Initiative and assistance to date has included in-country and U.S.-based training and procurement advisory services supporting the Ministry of Minerals, Energy and Water Resources.
We are strengthening air travel linkages in the region through our Safe Skies Africa program with capacity building. Under this program, last week the U.S. Department of Transportation and the Federal Aviation Administration, in support of the International Civil Aviation Organization (ICAO) Comprehensive Regional Implementation Plan for Aviation Safety in Africa, conducted a workshop on effective safety oversight of safety management Systems. The workshop, graciously hosted by the Civil Aviation Authority of Botswana, covered strategies for resolving civil aviation safety concerns, assessments of an Air Navigation Service Provider’s Safety Management System, and application of ICAO’s Eight Critical Elements of State Safety Oversight. 64 delegates from 22 African States participated in the workshop.
In addition, the U.S. Embassy through USAID supports a five-year $15 million development credit authority (DCA) with Barclays Bank Botswana to provide access to credit for small and medium enterprises and entrepreneurs. The DCA improves access to financing for SMEs in order to diversify Botswana’s economy and create jobs.
The U.S. Government’s Overseas Private Investment Corporation, known as OPIC, can also offer financing for projects that are connected to the U.S. private sector. In the last year, OPIC entered into a $250 million partnership with Bayport and approved $45 million in financing to the African Banking Corporation of Botswana.
We have worked to build entrepreneurial capacity in Botswana. In 2014 we hosted a series of seminars to provide practical advice and training for entrepreneurs in the tech field. Building on this, in 2015 we hosted roundtable discussions with entrepreneurs, business associations, and government officials to clarify challenges facing Batswana entrepreneurs. One issue raised was business mentorship gaps, and we are privileged to be part of ongoing consultations with MITI on how to best address this. Intellectual property right protections were another issue entrepreneurs have raised, and we are working with CIPA to cohost a workshop on enforcement best practices with a visiting U.S. expert later this year.
I am pleased to note growing engagement between our nations, with the 2015 establishment of a Botswana Chapter under the African Women’s Entrepreneurship Program, a U.S. Government program to assist and empower women entrepreneurs. The long-standing American Business Council in Botswana, known as ABC, has also increased activities over the year. ABC has hosted workshops for the business community on how to leverage the U.S. Government resources to grow their companies, and we were honored to see there is a strong appetite for commercial engagement based on the high attendance rates. This trend parallels our bilateral trade ties, which have also grown over the last 10 years.
We gear these efforts to support private sector-led, export driven growth that will pave the way to a diversified economy in Botswana. We are committed to building U.S.-Botswana commercial ties for the betterment of American and Batswana lives. We are grateful for the close collaboration we enjoy with our partners in this endeavor with BITC and MITI, and look forward to fruitful discussion during today’s program.