US has removed Uganda from AGOA Trade Deal

The United States, through a decree from President Joe Biden on December 29, has removed Uganda and three other African nations from the African Growth and Opportunity Act (AGOA).

This move eliminates the privilege of duty-free exports to the US for these countries, as President Biden determined that they no longer meet the necessary requirements for the trade deal.

“Accordingly, I have decided to terminate the designations of the Central African Republic, Gabon, Niger, and Uganda as beneficiary sub-Saharan African countries for purposes of section 506A of the Trade Act, effective January 1, 2024,” read the statement by the US President.

In an October 2023 letter to the US Congress speaker, President Biden announced the removal of four countries, citing Uganda’s “gross violations of internationally recognized human rights.”

The decision followed President Museveni’s approval of an anti-gay law imposing severe penalties, including life imprisonment or death, for same-sex relations.

The expulsion of Uganda from Agoa may result in significant economic consequences, including the loss of thousands of jobs, a decline in foreign-exchange earnings, and reduced local raw material utilization, caution experts.

Since Agoa legislation’s inception in 2000, Uganda has been a major beneficiary, with exports to the US totaling $8.2 million in the 12 months to June 2023, constituting 11.5% of its US exports.

The majority (80%) of Uganda’s Agoa exports are from the agricultural sector, posing a threat to jobs as the country faces expulsion.

Uganda’s trade with the US, however, lags behind Kenya and Tanzania. Agoa is set to expire in December 2025, with the possibility of extension.

Uganda may rejoin by meeting criteria, potentially involving changes to its anti-gay law. Currently, Uganda joins South Sudan, Somalia, and Burundi on the list of countries excluded from the US preferential trade agreement.

Other sub-Saharan African countries removed from the list include Ethiopia, Guinea, Mali, Gabon, Cameroon, Burkina Faso, The Gambia, Central African Republic, Zimbabwe, and Sudan.