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USA/Africa: Trade Profile

AfricaFocus Bulletin
Jul 21, 2009 (090721)
(Reposted from sources cited below)

Editor's Note

"In 2008, U.S. imports under the African Growth and Opportunity Act (AGOA) were $66.3 billion, 29.8 percent more than in 2007. ... Petroleum products continued to account for the largest portion of AGOA imports, with a 92.3 percent share of overall AGOA imports. ... The top five AGOA beneficiary countries in 2008 were Nigeria, Angola, South Africa, Chad and the Republic of Congo." - U.S. International Trade Administration, July 2009.

This AfricaFocus Bulletin contains a press summary and excerpts from the latest report on U.S.-Africa trade published by the U.S. International Trade Commission this month. The prominence of oil in shaping these current economic links is a striking contrast with the aspiration for more diversified development expressed in the sole mention of oil in President Barack Obama's speech in Ghana:

"In Ghana, for instance, oil brings great opportunities, and you have been responsible in preparing for new revenue. But as so many Ghanaians know, oil cannot simply become the new cocoa. From South Korea to Singapore, history shows that countries thrive when they invest in their people and infrastructure; when they promote multiple export industries, develop a skilled workforce, and create space for small and medium-sized businesses that create jobs."

Another AfricaFocus Bulletin sent out today features excerpts from a variety of commentaries following the July 11 speech.

For previous AfricaFocus Bulletins on U.S.-Africa relations, see http://www.africafocus.org/country/usa-africa.php

For previous AfricaFocus Bulletins on trade issues, see http://www.africafocus.org/tradexp.php

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

U.S.-Africa Trade Increased 28 Percent in 2008

Charles W. Corey

14 July 2009

http://www.america.gov/world/africa.html

http://allafrica.com/stories/200907160447.html

U.S. trade with sub-Saharan Africa, exports plus imports, increased 28 percent in 2008 and U.S. imports under the African Growth and Opportunity Act (AGOA) are becoming increasingly diversified, according to a just-released profile of U.S.-Africa trade trends. [Editor's note: but see below, petroleum products, at 92.3%, still overwhelmingly dominate AGOA imports.]

The report, compiled by the International Trade Administration at the U.S. Department of Commerce, was released as a preview of major U.S.-Africa trade trends that will be discussed at the eighth annual United States-Sub-Saharan Africa Trade and Economic Cooperation Forum to be held August 4-6 in Nairobi, Kenya.

U.S. exports, the report explains, increased by 29.3 percent to $18.6 billion, driven by growth in several sectors including machinery, vehicles and parts, wheat, non-crude oil, aircraft and electrical machinery (including telecommunications equipment).

U.S. imports in 2008 increased by 27.8 percent to $86.1 billion, the report states. This growth is due to a significant increase of 31.9 percent in crude oil imports (accounting for 79.5 percent of total imports from sub-Saharan Africa).

Of the top five African destinations for U.S. products, exports to South Africa rose by 17.6 percent, to Nigeria by 47.7 percent, to Angola by 65.4 percent, to Benin by 192.4 percent (due to a large increase in the export of non-crude oil and vehicles and parts), and to Ghana by 46.2 percent.

U.S. imports from the oil-producing countries grew in every case, the report says, with imports from Nigeria growing by 16.2 percent, from Angola by 51.2 percent, from the Republic of Congo by 65.2 percent, from Equatorial Guinea by 89.5 percent, from Chad by 55.4 percent, and from Gabon by 4.4 percent.

U.S. imports from South Africa grew by 10.2 percent. Declines in the import of platinum and diamonds from South Africa were more than balanced by strong growth in the import of ferroalloys and extremely high growth of more than 350 percent in the import of passenger vehicles (caused by a surge in imports from South Africa as new car lines produced in South Africa came on the market at the end of 2007).

In 2008, U.S. imports under the African Growth and Opportunity Act (AGOA) were $66.3 billion, 29.8 percent more than in 2007. This figure includes duty-free imports from AGOA-eligible countries under both the U.S. Generalized System of Preferences (GSP) and the expanded AGOA GSP, plus textile and apparel items imported duty-free and quota-free under AGOA provisions.

Petroleum products continued to account for the largest portion of AGOA imports, with a 92.3 percent share of overall AGOA imports. With these fuel products excluded, AGOA imports were $5.1 billion, increasing by 51.2 percent. Much of this product increase was due to a 224.8 percent increase in imports of transportation equipment, virtually all from South Africa as mentioned above.

AGOA minerals and metals also increased by 58.8 percent and AGOA chemical and related products by 38.7 percent. AGOA textiles and apparel imports declined by 10.4 percent and AGOA agricultural products by 7.9 percent.

U.S. imports under AGOA are becoming increasingly diversified. Some of the more significant products include: jewelry and jewelry parts; fruit and nut products; fruit juices; leather products; plastic products; and cocoa paste.

The top five AGOA beneficiary countries in 2008 were Nigeria, Angola, South Africa, Chad and the Republic of Congo. Other leading AGOA beneficiaries included Gabon, Cameroon, Lesotho, Madagascar, Kenya, Swaziland and Mauritius.

The U.S. merchandise trade deficit with sub-Saharan Africa continued to widen in 2008 to $67.5 billion, from $53.0 billion in 2007. Nigeria, Angola, the Republic of Congo, South Africa, Chad, and Equatorial Guinea accounted for 97.2 percent of the U.S. trade deficit with sub-Saharan Africa in 2008.


U.S.-African Trade Profile, July 2009

Selected Excerpts

Full 17-page report available at http://agoa.gov/resources/US_African_Trade_Profile_2009.pdf

U.S. imports from the oil producing countries grew in every case with imports from Nigeria growing by 16.2 percent, from Angola by 51.2 percent, from the Republic of Congo by 65.2 percent, from Equatorial Guinea by 89.5 percent, from Chad by 55.4 percent, and from Gabon by 4.4 percent. U.S. imports from South Africa grew by 9.9 percent. Declines in the import of platinum and diamonds from South Africa were more than balanced by strong growth in the import of ferroalloys and extremely high growth of over 350 percent in the import of passenger vehicles (caused by a surge in imports from South Africa as new car lines produced in South Africa came on the market at the end of 2007).

...

Petroleum products continued to account for the largest portion of AGOA imports with a 92.3 percent share of overall AGOA imports. With these fuel products excluded, AGOA imports were $5.1 billion, increasing by 51.2 percent. Much of this non-energy product increase was due to a 224.8 percent increase in imports of AGOA transportation equipment, virtually all from South Africa as mentioned above. AGOA minerals and metals also increased by 58.8 percent and AGOA chemical and related products by 38.7 percent. AGOA textiles and apparel imports declined by 10.4 percent and AGOA agricultural products by 7.9 percent.

...

The top five AGOA beneficiary countries included Nigeria, Angola, South Africa, Chad, and the Republic of Congo. Other leading AGOA beneficiaries included Gabon, Cameroon, Lesotho, Madagascar, Kenya, Swaziland, and Mauritius.

...

Africa's Global Trade

[figures in this section refer to 2007, the latest full year available, not to 2008]

Sub-Saharan Africa's total merchandise exports were $244.6 billion in 2007, a 17.2 percent increase, approximately the same increase as in 2006. In 2007, South Africa and Nigeria accounted for 50.2 percent of Sub-Saharan Africa's total exports. South Africa's exports grew by 21.1 percent to $63.5 billion, a positive shift from the virtually zero growth in exports in 2006. Nigeria's exports grew by 12.2 percent to $59.4 billion, somewhat lower than the 21.6 percent growth in exports in 2006.

Sub-Saharan Africa's 17.2 percent increase in exports outpaced total world exports, which grew at 15.6 percent, and grew on par with developing country exports, which grew at 17.3 percent. Sub-Saharan Africa, however, accounted for only 1.83 percent of world trade in 2007, slightly higher than its 1.74 percent share in 2006.

Shares of Africa's Import and Export Markets4

Sub-Saharan Africa accounts for slightly more than one percent of U.S. merchandise exports, and slightly more than three percent of U.S. merchandise imports, of which about 81 percent are petroleum products. Similarly, Sub-Saharan Africa accounts for a little more than one percent of both EU merchandise exports and imports. The United States is Africa's largest single country market, purchasing 28.4 percent of the region's exports in 2007. China came in second at 13.4 percent, and the United Kingdom was third at 5.6 percent. The EU purchased 31.4 percent of Sub-Saharan Africa's exports, down from 32.1 percent in 2006. China, however, increased its share of African exports by almost one percentage point to a 13.4 percent share.

...

In 2007, China continued to be the largest individual country exporter to Sub-Saharan Africa with a growing market share of 9.8 percent and $26.5 billion in exports to the region. China's exports to the region continued to grow rapidly by 39.4 percent from 2006. Increased shipments of electrical and other machinery, vehicles (mainly motorcycles and trucks), woven fabrics, iron and steel products, woven and knit apparel, and low-end footwear comprised the largest share of China's growth in shipments to Sub-Saharan Africa.

...

Africa's Economic Growth

According to the World Bank, the world economy decelerated in 2008 with an estimated 2.5 percent growth, compared to 3.7 percent growth in 2007. Global growth slowed with the onset of the global economic crisis which has intensified since fall 2008. Developing country economies slowed to 6.3 percent growth in 2008, compared to 7.9 percent in 2007. Several factors contributed to a slowdown in growth for developing countries including: slowing growth in developed countries, declining equity markets and capital flows, and a sharp rise in inflation due to an increase in commodity prices which helped lower consumer spending. Leading this decline were China with a sharp falloff in industrial production growth and India with a reduction in output growth. The increasingly severe global recession will push developing country growth down even more in 2009.

In 2008, Sub-Saharan African economies followed the global trend with growth slowing to an estimated growth of 5.4 percent, compared to 6.3 percent in 2007. Economic growth in Sub-Saharan Africa in 2008 was lower than average developing country growth, but above average world growth. With South Africa being a notable exception, the effect of the global crisis will likely be transmitted to African economies more indirectly through a decline in external demand and lower commodity prices. ...

Even with the worsening of the global economic crisis, Sub-Saharan Africa's growth in 2008 represents the first time in more than 45 years that Africa’s growth exceeded five percent for five years straight. The World Bank notes that economic growth in 2008 has been broad-based and less volatile than in past years across regions and includes both oil- importing and oil-exporting countries. The IMF emphasizes that many of the Sub- Saharan African countries that have sustained economic growth have followed consistently strong macroeconomic policies with a proactive role by the government.

Growth in oil-exporting countries remained strong, growing by more than 7.5 percent for a second year in a row. Of note, is the strong growth in the non-oil sectors in some of the major oil exporting countries. Despite continued unrest in the Niger Delta causing a drop in Nigeria's oil output, Nigeria experienced strong growth in agriculture, trade, and telecommunications helping Nigeria to maintain a positive growth of 6.3 percent in 2008. Non-oil sector growth in Angola was even higher at nearly 20 percent in 2008 driven by growth in construction, agriculture and communication sectors.

As Sub-Saharan Africa's largest economy, South Africa drives much of the growth among the oil-importing countries. As the most integrated African economy into the global financial system, South Africa has felt the effects of the global economic crisis more severely than other African countries. In the fall of 2008, economic growth forecasts for South Africa predicted growth of as high as three percent in 2009. As the global crisis worsened and the effects on South Africa became more apparent with a weakening Rand, falling demand for South Africa's exports, slowing domestic demand, and a steep drop in commodity prices, forecasts by January 2009 predicted a growth of one percent or less for South Africa in 2009. By April 2009, the IMF was predicting a 0.3 percent contraction in South Africa for 2009.14 A steeper decline in South Africa will likely have negative repercussions for overall growth in Sub-Saharan Africa.

Excluding South Africa, growth among oil-importers in Sub-Saharan Africa remained positive at 5.2 percent in 2008, down slightly from 5.8 percent in 2007. Political instability, however, caused a sharp decline in Kenya's growth in 2008 with growth falling from 7.1 percent in 2007 to an estimated 3.3 percent in 2008. Renewed conflict in the Democratic Republic of Congo could also dampen growth prospects into 2009. Even with many African countries experiencing continued economic growth, the World Bank notes that many African countries are coming up against "capacity constraints stemming from inadequate investment in energy, roads, railways, and ports over the past decades." This capacity constraint coupled with high global food and fuel prices (at least in the first half of 2008) contributed to a rise in inflation in Sub-Saharan Africa in 2008.16 In fact, almost half of Sub-Saharan African countries experienced double-digit consumer price inflation with median inflation rising to 13 percent through September 2008. The IMF predicts that inflation will begin to fall in 2009 as commodity prices and global demand both decline.

...

The IMF has continued to revise downward its predictions for global growth in 2009. In a World Economic Outlook Update in late January 2009, the IMF predicted a global growth of 0.5 percent for 2009.21 By April 2009, the IMF had an even more dire prediction of a global economic contraction of 1.5 percent in 2009.22 The IMF predicted that Sub-Saharan Africa would be more negatively affected than originally predicted, though not as severely as in other regions with the IMF still predicting low positive growth for Sub-Saharan Africa. The IMF expressed concern that Africa's economic gains described above could "slip away" as a result of the global economic crisis. ...

Leading U.S. Export Markets in Sub-Saharan Africa

U.S. exports to Sub-Saharan Africa remained highly concentrated among a small number of countries. The top three markets – South Africa, Nigeria, and Angola - remained the same from 2007 and accounted for 68.3 percent of U.S. sales in 2008, with South Africa claiming 35.1 percent, Nigeria 22.2 percent, and Angola 10.9 percent. ...

Leading U.S. Exports to Sub-Saharan Africa

U.S. exports to Sub-Saharan Africa in 2008 were concentrated in motor vehicles, agricultural commodities, petroleum and coal products, and aircraft. The top three U.S. exports in 2008 were motor vehicles accounting for 11.9 percent of exports, oilseeds and grains (mostly wheat) 8.7 percent, and petroleum and coal products 7.6 percent. Other leading export categories included: aircraft; oil and gas field machinery and equipment; construction and general purpose machinery; industrial chemicals; navigational, measuring, electromedical and control instruments; grain and oilseed milling products; and communications equipment.

...

Leading Sub-Saharan African Suppliers to the United States

U.S. imports from Africa remained highly concentrated among a small number of suppliers. Four countries - Nigeria, Angola, South Africa, and Republic of Congo - accounted for 83.7 percent of U.S. purchases in 2008. ...

U.S. Imports from Major Sub-Saharan Africa Trading Partners, 2008

Nigeria             44.2%  
Angola              22.0%  
South Africa        11.6%  
Congo                5.9%  
Equatorial Guinea    3.9%  
Chad                 3.9%  
Gabon                2.6%  
Other                5.9%  

Source: U.S. Dept. of Commerce, Bureau of Census

Oil imports (crude and non-crude) continued to dominate imports from Sub-Saharan Africa with $71.2 billion in oil imports in 2008, accounting for 82.8 percent of all U.S. purchases. Platinum remained the second leading U.S. import with a 3.5 percent share. Motor vehicles and parts replaced diamonds as the third leading U.S. import, accounting for 2.3 percent of purchases. Other leading imports included: diamonds; iron and steel; woven and knit apparel; ores, slag and ash; cocoa; organic chemicals; and petroleum gases and other gases.


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

AfricaFocus Bulletin can be reached at africafocus@igc.org. Please write to this address to subscribe or unsubscribe to the bulletin, or to suggest material for inclusion. For more information about reposted material, please contact directly the original source mentioned. For a full archive and other resources, see http://www.africafocus.org


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