Ethiopian Exports to United States Nearly Double in Two Years

Exports have soared the past two years under the African Growth and Opportunity Act (AGOA), which offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.

USAID VEGA Ethiopia AGOA+, the only bilateral AGOA trade program in Africa, announced that Ethiopia has been making steady gains in its efforts to break into the U.S market.  The AGOA+ project has been working directly with local businesses to increase Ethiopia’s exports to the United States through the AGOA and has seen significant progress so far.

Since the project’s inauguration two years ago, Ethiopian exports under AGOA/General System of Preference (GSP) have increase by almost 100% to US $8.9 million in 2007, much higher than the average national exports growth rate over the past five years.  AGOA is a U.S government initiative that allows for a duty free and quota free access to the U.S market for over 6,000 items produced in selected African countries including Ethiopia.  The AGOA+ project is funded by the United States Agency for International Development (USAID)

“The U.S. market, while very competitive and demanding, is also the largest in the world,” explains Mr. Addis Alemayehu, Director of the AGOA+ project.  “We are on the verge of a major breakthrough where companies in the U.S. and elsewhere are starting to recognize Ethiopia as a place to do business and our exporters are starting to open their eyes to the world of opportunities that exist in the export sector.”

As the AGOA+ project starts to address the twin problems of a supply side weakness in Ethiopia and the inability to market Ethiopian products in the U.S., total exports to the U.S. have showed considerable gain.  Total exports have risen from US $61 million in 2005 to US $88 million in 2007, an increase of over 30% over two years. 

The prospects are very promising.  Existing Ethiopian factories are starting to show signs of becoming globally competitive, while fresh new investments with an eye to the U.S. market have also increased in the key sectors of key textile, garments and leather industries.  USAID’s VEGA Ethiopia AGOA+ project in turn has been making progress in building the image of Ethiopia as a location for quality exportable products.

“This project has been unique in that it often comes up with out of the box solutions appropriate for the Ethiopian business realities to help us build our capacity and access the large U.S. market,” said Mohammed Umer of Novastar Garments, an Ethiopian Diaspora owned company currently making headway into the U.S. market with help from the project.  “I believe we have only scratched the surface and we are confident that we will make our presence felt in the U.S. soon.”

Already planning ahead, the AGOA+ project has forged a close partnership with the Ministry of Trade and Industry and the International Labor Organization (ILO) office in Ethiopia to help increase Ethiopia’s share of garment and apparel exports to the U.S.

The program’s focus in the future will be to increase the market linkages between Ethiopian products and the U.S., promote more inward Diaspora and American investment and trade with Ethiopia, help to create new jobs and expand the product categories exported under AGOA to the U.S.  There will be a special emphasis on flower exports as well as other products such as honey and spices. 

USAID VEGA Ethiopia AGOA+ was initiated in January 2005 and has made tremendous progress in contributing to the growth of exports from Ethiopia to the U.S. market.  The project works in close partnership with the Government of Ethiopia, the Ministry of Trade and Industry, the Ministry of Foreign Affairs through the Ethiopian Embassy in the Washington DC, the Ethiopian and Addis Ababa Chambers of Commerce and Sectoral Associations, and other development partners including the World Bank Country Office in Ethiopia and the ECA Trade Hub in Nairobi, Kenya.

USAID VEGA Ethiopia AGOA+ has in the past two years:

• Sponsored and provided support to over 30 Ethiopian firms in various industries to attend trade shows in the United States.
• Organized various training workshops using experts from the United States in the spices, textile/garments, and handicraft sectors.
• Facilitated VIP trips for buyers from the United States to come to Ethiopia and gain first hand knowledge of Ethiopian industries and build business relationships with exporters.
• Facilitated the first ever U.S. Investment in the garment and apparel sector with the potential to increase export revenue and creation of jobs in Ethiopia.
•  Lead a major effort to engage the huge Ethiopian Diaspora in North America in trade and investment with Ethiopia and has played a critical role in communicating the message that “Ethiopia is open for business”.