An Assessment of the Africa Growth and Opportunity Act (AGOA) and its Implications for Namibia
The United States introduced the African Growth and Opportunity Act (AGOA) in 2000 with the intention of maximising trade between the US and sub-Saharan African (SSA) countries. Specifically, AGOA aimed at developing the textile industry in SSA countries as it has the potential to contribute positively to employment creation due to its labour intensiveness nature. Unlike other trade agreements that are bilateral, AGOA is a unilateral trade preference agreement decided upon by the United States and targeting SSA countries. AGOA accords the President of the United States the right to cease the status of a SSA country that does not meet the requirements set out in AGOA. Only eligible sub-Saharan African (SSA) countries that meet certain requirements outlined in the Act can benefit under AGOA. Under AGOA, certain goods from eligible SSA countries can enter the United States duty free and quota free. The introduction of AGOA led to increased trade between the USA and the SSA countries. However, the increase in trade was not experienced at the same level in all SSA countries and did not affect all goods equally. Trade statistics show that countries that experienced substantial growth in trade included Nigeria, Angola and South Africa, Gabon and Chad. Furthermore, products dominating trade between United States and SSA countries are natural resources and primary products. Overall, petroleum products account for more the 90 per cent of all African exports to the United States. In other SSA countries, AGOA led to the development of textile industries. Thus countries like Swaziland, Lesotho and Malawi experienced a substantial growth in their textile industries. Despite the significant growth experienced by the above-mentioned countries, total exports to the US from African countries are still dominated by petroleum products. In Namibia, products that dominate exports to the US are metals, minerals, textiles and apparel. The highest overall exports of US$ 238 219 million were recorded in 2004 and dropped significantly to US $129 557 million in 2005. The reduction in exports was also experienced in the textile industry in Namibia and in many SSA countries. For instance, many textile producing SSA countries experienced a decrease in their textile exports and subsequently company closures, which led to loss of thousands of jobs. In Namibia alone, about 1 600 jobs were lost when one of Ramatex’s subsidiaries (Rhino Garments) closed down in 2005. Namibia became a beneficiary country in 2001 and qualified for the ‘special rule’ provision on apparel articles which allows lesser developed SSA countries to source their raw materials from anywhere in the world. Only countries that had been classified as lesser-developed countries on the basis that their GDP per capita did not exceed $1500 could benefit from this provision. Before, 2001, Namibia did not have a developed textile and apparel industry but this changed with the introduction of AGOA coupled with many government concessions, which largely influenced the Ramatex company decision to invest in Namibia. Ramatex is by far the largest textile factory in Namibia and was expected to create about 8 000 jobs, a reason which was used to justify the concessions offered to Ramatex. Following retrenchments in 2005 and 2006, there are currently only 3 600 Namibian workers employed at Ramatex. Despite having increased workers wages in 2006 following lengthy negotiations and a strike, Ramatex workers are still among the lowest paid industrial workers in Namibia. Furthermore, since its inception, labour relations have been tense at the company with the lack of wage increases as the main source of conflict. This study revealed that there are internal and external challenges that face the success of AGOA in SSA countries. The internal challenges relate to the ability of companies to fully benefit under AGOA due to internal capacity constraints whilst external constraints are the end of the Multi Fibre Agreement (MFA) coupled with the attractions offered by China as an investment location.
Ntwala Mwilima and Herbert Jauch
Labour Resource and Research Institute (LaRRI)
2007
© Labour Resource and Research Institute (LaRRI)
PDF
English
Ramatex: On the other side of the fence
This booklet will not discuss all aspects in detail but will give a brief overview of Namibia's EPZ programme as well as a profile of the Ramatex Company. The main part of this booklet deals with the experiences of Ramatex workers. All too often their views are discarded by policy makers who simply argue that ‘workers should be grateful to have any job at all’. We believe that development must be a people-centred process that cannot ignore the views of those directly affected. We therefore hope that this booklet will contribute towards making the experiences of Ramatex workers known. This booklet will present their stories as they have told them. We also hope that this booklet will contribute to a debate about the costs and benefits of investments like Ramatex in terms of long-term sustainable development.
Herbert Jauch and Hilma Shindondola
Labour Resource and Research Institute (LaRRI)
2003
© Labour Resource and Research Institute (LaRRI)
PDF
English
A Legal overview of Namibia's Mining Industry
Dissertation (LLM) - Namibia has since gaining its independence managed to build a strong mining industry and a solid regulatory framework to govern it. Many foreign investors have looked to Namibia’s mining industry to invest in this growing sector over the years. However, the 2008 global economic recession saw the mining industry of Namibia suffering tremendously from the diminishing ore reserves and low commodity prices. However, in spite of these challenges, the mining industry has continued to attract foreign investments into the industry. This has also come with its share of implications which are felt by the sector as a whole. This research raises the need for the government of Namibia to amend existing legislation on mining and introduce laws and policies that will aid in overcoming these challenges. In the light of the above, this study argues that while there has been a recent decline in the mining sector of Namibia since 2008 as a result of diminishing ore reserves and low commodity prices, which have negatively affected the mining industry in Namibia, the amendment of the laws in extant and enactment of new ones with improved policies could turn the evil tide presently besetting the mining companies and the Namibian mining industry as a whole.
Winfred Siphiwe Lupalezwi
http://repository.up.ac.za/handle/2263/43706
University of Pretoria
2014
PDF
English