Agoa opens up opportunities for Africa’s female entrepreneurs

Magatte
“The two most important changes taking place in Africa are that some African nations are reforming their business environments and that some Western investors are beginning to invest in African entrepreneurs and companies,” Magatte Wade-Marchand (Image: Magatte Wade-Marchand)


USAID/South Africa
+27 12 452 2000
pretoriainfo@usaid.gov

Sulaiman Philip

Six of the ten fastest-growing economies are African. For the past decade economic growth in Africa has exceeded 5%. By 2050 one in four of the world’s population will be African. This growth and the newly wealthy and growing middle class means Africa is again caught in a cold war between the West and the East.

China has ramped up its presence in Africa, funding major development programmes and opening its markets to continental businesses. In response, the US government passed the African Growth and Opportunity Act in May 2000.

The legislation has increased African exports to the US, creating jobs on the continent and in America. What it has not done is made that the status quo. Once the legislation lapses in September 2015, the preferential access for African business ends and the continent’s countries will have to compete against suppliers with deeper historical ties to the US.

In 2004 and again in 2006 Agoa terms were extended, and African leaders meeting in Washington this week are hopeful that, once again, those terms will be extended, to beyond 2015. One of the major stated aims of Agoa was to improve the lives of African families by spurring industrial development, giving African businesses preferred access to American markets.

The act has overwhelmingly benefitted the continent’s entrepreneurial women.

African crafts improve Africans’ lives

The Masai call them 1000 milers, South Africans Trailbusters, Kenyans, akalas, but to a US legislator they are African curios and deserving of duty-free importation into the US under the Agoa pact. Curios, handmade or hand-loomed textiles and most agricultural products are included on the list of the more than 6 400 African products that are given preferential access to American markets.

Roselyne Egosangwa is a resident of Korogocho, a slum in Nairobi. She is also an employee and shareholder in Ecosandals, a company that recycles old tyres into sandals. Mother to nine children, she supports her family by selling the sandals she, and her co-owners, produce to American consumers half a world away. Ecosandals, with the help of American partners, has expanded its business online and now has customers on five continents.

As Egosangwana told Kenya’s Standard Media, “Today, in the world of Twitter, Facebook and Blackberry phones, a small group in Korogocho slums can build a global brand.”

Egosangwana’s income has risen from a pitiful Sh. 3 000 ($34) to more than Sh. 14 000 ($159) a month; more than enough to raise a family on. “Our most popular pair of Ecosandals footwear says, ‘Ndio tunaweza’ on the left foot and has the translation, ‘Yes We Can’, on the right one. We see Agoa as change we all can believe in.”

Ecosandals’s first shipment reached US shores in 2001 but was held up at the entry port; US customs officials still needed to be educated about the provisions of the act, a year after it became law. That problem was resolved with a simple phone call from Hillary Clinton, then senator for New York State.

But while Ecosandals’s success has been a boon for women like Egosangwana, it has also narrowed the range of goods that entrepreneurs want to export to the US.

AGOA2
While there are tangible gains, the potential of AGOA remains largely unexploited (Image: Brookings Institute)

With so many entrants looking to follow in Ecosandals footsteps, exports from African women-owned businesses have, to a large extent, been restricted to handicrafts and apparel. These are industries that require very little in terms of start-up investment, but which are pushing the price of goods down. And holding back the growth of other industries.

Fortunately there are women like Senegal’s Magatte Wade-Marchand.

Connecting African businesswomen to the world

In 2010 the US government funded a follow-up programme to further help female entrepreneurs benefit from the preferential access. Help includes three African sites to train female entrepreneurs, and networking through the African Business Women Network, to match African businesswomen with American businesswomen. To foster an entrepreneurial spirit, the US is committed to reserving some government contracts for businesses owned and operated by African women.

Being mentored by an American businesswoman helped Wade-Marchand identify an opportunity in the $280-billion organic food market. Born in Senegal and educated in Germany and France, Wade-Marchand built Adina World Beat Beverages on a nostalgic love of the fresh fruit juices produced in her homeland.

Bissap is oft called the national drink of Senegal. The hibiscus-infused tea is also Wade-Marchand’s biggest seller in the US, where it is considered a healthier alternative to other manufactured drinks. And like the other drinks in her range they are manufactured using traditional recipes from West Africa.

Growth in the organics market has expanded Wade-Marchand’s business as well; she is about to launch Tiossano, an organic luxury skin care range based on indigenous Senegalese recipes.

“My biggest pride was to know that it was possible, that the vision I had was possible and my vision of a world fed with and cared for by an African brand based on African know-how was possible,” Wade-Marchand told the Habari Network.

Lifting tariffs for African goods has spurred a continent of entrepreneurial women; it has given rise to optimism about Africa and has transformed the continent’s economies. Agoa has not had a direct influence, but the opening of the business environment to investment and trade is a result of women taking charge of their own economic wellbeing.

As female entrepreneurs build companies that are trading with the world outside Africa, African governments have been forced to make the business environment more receptive to that trade and the investment that follows.

Wade-Marchand, now resident in California, explained her view on the importance of programmes like Agoa, saying, “Chinese purchases of raw materials may have a larger short-term impact, but those of us who want to see a prosperous Africa led by Africans know that the creation of successful African businesses is the only true path to African prosperity, and we need the West to recognise that fact.”

Again, Agoa never aimed to improve the West’s opinion of Africa, but it has helped change the perception of it as the “D” continent – death, disease, distress – to that of Africa as a safe investment opportunity. “African’s are moulding the world’s perceptions of their home. Something as simple as being online allows Africans to talk to the world and sell them their goods. Outdated views are fading quickly as the world realises Africa is the place to be.”

The 2008 economic crash forced the West to re-how it channelled aid to Africa. The idea that trade is aid took stronger hold and African women can now sell their Ugandan cotton, Mauritian seafood, Ghanaian cocoa and Kenyan sandals to an appreciative international audience.