In a recent announcement, Joe Biden stated that Uganda, along with three other countries, would be removed from the African Growth and Opportunity Act (Agoa). This decision came after Uganda passed a new anti-homosexuality law, which drew criticism globally. However, President Yoweri Museveni has downplayed the expulsion, urging Ugandans not to be overly concerned. He believes that the Western world underestimates the freedom fighters of Africa, emphasizing that Uganda can achieve its growth and transformation targets despite the lack of support from some actors.
Agoa, introduced in 2000, provides duty-free access to the US for more than 1,800 products from eligible sub-Saharan African countries. Uganda has been exporting goods like coffee and textiles to the United States for years under this deal, without having to pay any import tax. Nevertheless, the expulsion from Agoa is unlikely to cause significant economic distress, as the US is not one of Uganda’s main export markets.
The decision to remove Uganda and the Central African Republic (CAR) from the programme is primarily due to the gross violations of internationally recognized human rights committed by their respective governments. The CAR has been cooperating closely with the Russian Wagner group, accused of engaging in killings and other abuses against civilians. Additionally, Niger and Gabon, currently under military rule following coups, are ineligible for Agoa due to their failure to establish or make progress towards political pluralism and the rule of law.
Since May, there have been warnings that Uganda might be removed from Agoa after passing the anti-homosexuality law, which imposes severe penalties, including the death penalty, for engaging in certain same-sex acts. Global criticism has surrounded this law, leading to tensions with international partners. Nevertheless, President Yoweri Museveni remains confident, stating that Uganda has the capacity to achieve its growth and transformation targets, regardless of the lack of external support.
While there are concerns about the potential impact on Ugandan farmers and small business owners, the expulsion from Agoa is set to take effect from the start of next year. It is worth noting that in August, the World Bank suspended new loans to Uganda due to the anti-homosexuality bill, and last month, the US State Department warned about the risks of doing business in Uganda. President Museveni has accused the World Bank of attempting to coerce the government into dropping the controversial legislation.
Overall, the expulsion from Agoa may have minimal economic consequences for Uganda due to the country’s limited reliance on the US as an export market. However, the decision highlights the importance of upholding human rights and the rule of law for participating in major trade agreements. It also adds pressure on Uganda’s relationship with international partners and raises questions about the potential impact on the country’s business environment. Uganda’s leaders remain optimistic, emphasizing their determination to pursue growth and transformation goals despite external challenges.
