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Import trends by the United States (US) from sub-Saharan African countries largely mirror changes in total US imports despite the fact that growth rates may vary.
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The general slowdown in US imports in the second half of 2000 and the subsequent acceleration in the aftermath of the September 2001 terror attacks translated into lower imports from sub-Saharan countries, as was the case with imports from other regions of the world.
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The recovery in US imports since the beginning of 2002 resulted in growing imports from sub-Saharan Africa. However, recovery in imports from sub-Saharan Africa lagged those of the rest of the world and it was not until 2003 that growth in imports from this region outpaced those from the rest of the world thus compensating for the slow recovery in 2002.
US imports continued to remain strong despite the gradual weakening of the dollar on global currency markets giving rise to concerns about the expanding US current account deficit. However, trade data released for November 2003 showed a decline in imports which many commentators believe might be a sign that the weaker dollar is finally curbing import demand, which bodes well for a shrinking US current account deficit.
While no meaningful conclusion can and should be drawn from a single month's data it does, however, raise doubts about the sustainability of the strong import growth recorded in trade with sub-Saharan Africa in 2003. Should the dollar weakens further against major currencies in 2004 (which some believe is a prerequisite for the US economy to address its budget and current account deficits) it may affect imports from sub-Sahara Africa (including AGOA imports) negatively.
The impact might be twofold. Lower demand from the US brought about by the weaker dollar may result in a slowdown in imports from sub-Saharan Africa. A weaker dollar may also see further appreciation in the currencies of some of the main AGOA beneficiary countries, which could render the products from these countries less competitive globally. This may again cause a slowdown in imports from these countries.
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Among the main AGOA beneficiaries the most at risk, as far as the exchange affect is concerned, are Gabon whose currency has strengthened significantly in recent years. However, Gabon's exports to the US mainly consist of crude oil and products that may be less price sensitive. The South African rand, and to a lesser extent the Mauritian rupee and Kenyan shilling, have also appreciated against the US$ which exposes these countries' products to the exchange rate effect.
In contrast, the Angolan kwanza and the Nigerian naira have depreciated against the US$ over the outlook period which may have protected their competitiveness.
It is therefore clear that the pace of US economic recovery and developments in the US$ exchange rate will dictate the benefits qualifying African countries will enjoy under AGOA in 2004.
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