A new International Trade Commission report reviews U.S. exports to and imports from sub-Saharan Africa, the integration of U.S. products and services into SSA value chains, the intellectual property environment in key SSA markets, technological innovation in SSA food and agricultural production and processing, recent developments in regional integration efforts, and SSA country strategies to utilize the African Growth and Opportunity Act.

Exports. U.S. exports to SSA countries rose from $13.5 billion in 2016 to $15.9 billion in 2018. Exports of petroleum products represented the largest portion of this increase, followed by aircraft, spacecraft, and related equipment; motor vehicle parts; motor vehicles; natural gas and components; and poultry.

The leading destination markets for U.S. exports of goods to SSA by absolute value growth were South Africa and Nigeria, while exports to Togo experienced the largest increase in percentage terms. U.S. exports in services sectors such as finance, air transportation, professional and management consulting, and travel also grew steadily during this period.

Imports. U.S. imports from SSA countries in 2016-18 increased by $4.9 billion to $25.1 billion. The majority of this increase was in imports of crude petroleum from Nigeria and precious metals, non-numismatic coins, and diamonds from South Africa. Other sectors that saw the fastest growth in absolute value terms were natural and synthetic gemstones; spices; ferroalloys; and certain ores, concentrates, ashes, and residues. The growth in these and other U.S. imports from SSA mainly stemmed from higher foreign direct investment in the region in some sectors, growth in U.S. consumer demand, expanded SSA production capabilities, and SSA cost advantages in production.

Crude petroleum and petroleum products from Nigeria were the main driver behind the $2.0 billion (12.9 percent) increase in U.S. imports under AGOA. Nigeria, Ghana, and the Republic of the Congo were the fastest-growing source markets for U.S. imports under AGOA. Leading sectors of growth included crude petroleum, ferroalloys, apparel, miscellaneous inorganic chemicals, petroleum products, and edible nuts.

Foreign Direct Investment. The stock of U.S. FDI in SSA increased slightly from 2016 to 2018 to $34.0 billion, with mining (including crude petroleum) as the largest destination sector. In 2018, the top three destinations in SSA for U.S. FDI stock were Mauritius ($9.5 billion), South Africa ($7.6 billion), and Nigeria ($5.6 billion). Two services sectors—business services and software/information technology services—attracted the largest numbers of new U.S. FDI projects in SSA.

AGOA. As of November 2019, 16 of 39 AGOA beneficiary countries had prepared national strategies that identify sectors with the potential to increase exports to the U.S. under AGOA and propose ways to improve AGOA utilization. Many of these countries are also part of SSA’s regional economic communities, which are working to lessen trade barriers that hamper AGOA utilization. Two of these RECs have developed AGOA strategies of their own, emphasizing intra-regional initiatives that can improve AGOA utilization.

Value Chains. SSA plays a relatively small role in global value chains and lags behind other major regional blocs in GVC participation. The majority of SSA’s participation in GVCs was in the form of providing raw materials and primary inputs (e.g., crude petroleum, agricultural products, ores, or base metals) to other countries for downstream processing and export production.

Mining (including petroleum and natural gas extraction), transportation equipment (including motor vehicles), and agriculture and agribusiness are among the key value chains in SSA that present opportunities for deepening U.S. firms’ integration. Macroeconomic and policy factors—such as domestic market size, income level, infrastructure and logistics performance, regional trade agreements, and regional integration—influence trade, FDI, and the degree and type of GVC participation as well as the associated economic benefits.

IPR. Intellectual property rights infringement is generally higher in SSA as a whole than in more developed markets, which likely hinders domestic and foreign investment, particularly in industries that rely on copyright and trademark protections. Industry and government sources agree that weak capacity for both implementation and enforcement is a primary barrier to stronger IPR protections in SSA countries.

Agricultural Innovation. The adoption of more advanced agricultural innovations in SSA is still low on average and many hurdles exist to raising adoption rates, such as the large number of smallholders and the resulting fragmented production practices in most SSA countries. Differences among SSA countries that affect the adoption of new agricultural technologies include governmental regulations and policies, farm economy characteristics, and specific agronomic conditions.

Digital Economy. The market for digital technologies in key SSA markets has grown in recent years, driven by increases in mobile phone penetration, the expansion of high-speed internet, and growth in consumer spending power. Adoption of digital technologies is also changing traditional services and manufacturing sectors by making firms more productive, thereby improving cost competitiveness, and by creating new distribution channels for products and services. However, government policies such as those that restrict access to licenses and the cross-border transfer of data can hinder trade and investment in the digital economy.

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