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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

January 2015: 

African Growth and Opportunity Act: 

USAID Could Enhance Utilization by Working with More Countries to 
Develop Export Strategies: 

GAO-15-218: 

GAO Highlights: 

Highlights of GAO-15-218, a report to congressional requesters. 

Why GAO Did This Study: 

Signed in 2000, AGOA directs the President to provide TCB assistance 
to sub-Saharan African governments and firms to promote exports and 
develop infrastructure, among other things. AGOA provides duty-free 
access on qualifying U.S. imports from eligible sub-Saharan African 
countries, a total of 41 countries as of December 1, 2014. From 2001 
through 2013, U.S. agencies funded about $5 billion in TCB assistance 
to AGOA countries. GAO was asked to review various issues related to 
the ability of AGOA countries to utilize AGOA prior to its expiration 
on September 30, 2015. 

In this report, GAO examines (1) U.S. government TCB assistance in 
support of AGOA, and (2) the extent to which USAID has made efforts to 
develop strategic approaches to AGOA utilization. GAO focused on MCC 
and USAID because these two agencies accounted for nearly 90 percent 
of funding for TCB activities in AGOA countries from 2001 through 
2013. GAO analyzed data on U.S. TCB assistance to AGOA countries in 
this period, reviewed agencies' funding and program documents, 
conducted interviews with officials who implement U.S. TCB assistance, 
and met with U.S. and foreign government officials and private sector 
representatives in Ethiopia and Ghana. 

What GAO Found: 

Among U.S. agencies, the Millennium Challenge Corporation (MCC) and 
the U.S. Agency for International Development (USAID) have funded the 
majority of trade capacity building (TCB) assistance in support of the 
African Growth and Opportunity Act (AGOA) (see figure). MCC obligated 
nearly $3 billion in funding for TCB activities in 15 of the 41 
countries eligible for AGOA (AGOA countries), with the majority of 
funds provided for trade-related infrastructure projects. For example, 
MCC obligated $176 million for a roads project in Mozambique that 
aimed to improve the transportation network, including access to 
markets and reduction of transport costs. USAID obligated 
approximately $1.6 billion in funding for TCB activities in 39 of the 
41 AGOA countries, with the majority of funds provided for trade-
related agriculture and infrastructure, and trade facilitation. For 
example, USAID funded activities to help exporters in East Africa 
build business linkages with U.S. markets through trade shows. 

Figure: U.S. Trade Capacity Building (TCB) Funding Obligated for 
African Growth and Opportunity Act Countries by Category, 2001-2013: 

[Refer to PDF for image: pie-chart] 

Total $5.080 billion. 

Millennium Challenge Corporation, $2.957 billion; 58%: 
* Trade-related infrastructure: $2.282 billion: 77%; 
* Trade-related agriculture: $270 million: 9%; 
* Financial sector: $124 million: 4%; 
* All other TCB categories; $281 million: 10%. 

U.S. Agency for International Development: $1.595 billion; 31%: 
* Trade-related agriculture: $456 million: 29%; 
* Trade facilitation: $452 million; 28%; 
* Trade-related infrastructure: $303 million; 19%; 
* All other TCB categories: $384 million; 24%. 

Other U.S. government agencies: $528 million; 10%. 

Source: GAO analysis of USAID data. GAO-15-218. 

Note: Funding amounts or percentages may not sum to totals because of 
rounding. 

[End of figure] 

USAID has worked with some host governments to develop strategic 
approaches to AGOA utilization; however, most host governments have 
not established such approaches. USAID-funded regional trade hubs in 
sub-Saharan Africa have supported AGOA utilization by, among other 
things, collaborating with some host governments to develop AGOA-
specific or broader national export strategies. Trade hub evaluations 
and statements from host government officials show that identifying 
strategic needs and priorities through strategic approaches can 
bolster AGOA utilization and help assess challenges to expanding 
exports. In strategy documents, host governments may identify high-
priority trade and investment sectors, constraints related to AGOA 
utilization, and specific steps to increase exports under AGOA. Lack 
of a strategic approach has been identified as a significant reason 
for gaps in AGOA utilization. As of December 2014, 14 of the 41 AGOA 
countries had strategies reflecting AGOA priorities. According to 
USAID officials, host governments must initiate the process of 
developing a strategy, and a lack of political will may pose 
challenges to such efforts. 

What GAO Recommends: 

GAO recommends that the Administrator of USAID work with more host 
governments to develop strategic approaches to promoting exports under 
AGOA. USAID agreed with the recommendation. 

View [hyperlink, http://www.gao.gov/products/GAO-15-218]. For more 
information, contact Kimberly Gianopoulos at (202) 512-8612 or 
GianopoulosK@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

MCC's and USAID's TCB Assistance in Support of AGOA Has Primarily 
Focused on Barriers to Trade-Related Infrastructure and Agriculture, 
and Trade Facilitation: 

USAID Has Worked with Some Host Governments on Strategic Approaches to 
AGOA Utilization, but Most Host Governments Have Not Established Such 
Approaches: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: U.S. Government Trade Capacity Building (TCB) Database 
Definitional Categories and Examples of Activities in African Growth 
and Opportunity Act (AGOA) Countries: 

Appendix III: Comments from the U.S. Agency for International 
Development: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: U.S. Government Trade Capacity Building (TCB) Funding 
Obligated for African Growth and Opportunity Act (AGOA) Countries by 
Country, 2001-2013: 

Table 2: Millennium Challenge Corporation (MCC) Trade Capacity 
Building (TCB) Funding Obligated for African Growth and Opportunity 
Act (AGOA) Countries by Country, 2001-2013: 

Table 3: USAID Trade Capacity Building (TCB) Funding Obligated for 
African Growth and Opportunity Act (AGOA) Countries by Country, 2001-
2013: 

Table 4: Examples of U.S. Trade Capacity Building (TCB) Assistance 
Activities in African Growth and Opportunity Act (AGOA) Countries, by 
TCB Assistance Category: 

Figures: 

Figure 1: U.S. Trade Capacity Building (TCB) Funding Obligated for 
African Growth and Opportunity Act (AGOA) Countries by Category, 2001-
2013: 

Figure 2: U.S. Government Trade Capacity Building (TCB) Funding 
Obligated for African Growth and Opportunity Act (AGOA) Countries by 
Year, 2001-2013: 

Figure 3: U.S. Government Trade Capacity Building (TCB) Funding 
Obligated for African Growth and Opportunity Act (AGOA) Countries by 
Funding Agency, 2001-2013: 

Figure 4: Millennium Challenge Corporation (MCC) Trade Capacity 
Building (TCB) Funding Obligated for African Growth and Opportunity 
Act Countries by Category, 2001-2013: 

Figure 5: USAID Trade Capacity Building (TCB) Funding Obligated for 
African Growth and Opportunity Act (AGOA) Countries by Category, 2001-
2013: 

Figure 6: Sub-Saharan African Countries Supported by USAID-Funded 
Regional Trade Hubs, as of December 2014: 

Figure 7: African Growth and Opportunity Act (AGOA) Countries That 
Have AGOA-Specific or National Export Strategies, as of December 2014: 

Abbreviations: 

AGOA: African Growth and Opportunity Act: 

FTA: free trade agreement: 

GSP: Generalized System of Preferences: 

IPR: intellectual property rights: 

MCC: Millennium Challenge Corporation: 

RTA: regional trade agreement: 

SPS: sanitary and phyto-sanitary: 

TBT: technical barriers to trade: 

TCB: trade capacity building: 

USAID: U.S. Agency for International Development: 

USITC: U.S. International Trade Commission: 

USTDA: U.S. Trade and Development Agency: 

USTR: Office of the U.S. Trade Representative: 

WTO: World Trade Organization: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

January 22, 2015: 

Congressional Requesters: 

The African Growth and Opportunity Act (AGOA), signed into law in 
2000,[Footnote 1] is a U.S. trade preference program that allows 
eligible sub-Saharan African countries to export qualifying goods to 
the United States without import duties.[Footnote 2] AGOA is intended 
to promote free markets, stimulate economic development in sub-Saharan 
Africa through export-led growth, and facilitate sub-Saharan Africa's 
integration into the global economy. U.S. imports from countries 
eligible for AGOA, which we generally refer to as AGOA countries, have 
increased since 2001, although these countries' share of overall U.S. 
imports have remained small and experienced declines in recent years. 
In 2013, 2 percent of overall U.S. imports came from AGOA countries. 
[Footnote 3] To help countries take full advantage of increased 
trading opportunities under AGOA, U.S. agencies have provided various 
forms of technical assistance commonly referred to as trade capacity 
building (TCB) support.[Footnote 4] This assistance may include 
support for addressing the regulatory environment for business, trade, 
and investment; improving customs procedures; and developing 
infrastructure, such as ports and roads. U.S. and African officials 
have recognized the need for continued trade capacity building to help 
sub-Saharan African countries make better use of AGOA. Most recently, 
in conjunction with the U.S.-Africa Leaders Summit, held in 
Washington, D.C., in August 2014, President Obama stated that in order 
for countries to be able to utilize AGOA to its fullest, AGOA must be 
linked to a comprehensive, coordinated trade and investment capacity-
building approach.[Footnote 5] The President also called for a 
comprehensive U.S. approach to expanding sub-Saharan Africa's capacity 
for trade and investment. 

As Congress deliberates reauthorization of AGOA, which is set to 
expire on September 30, 2015, policymakers have expressed interest in 
countries' ability to utilize AGOA and U.S. TCB assistance in support 
of AGOA. In this report, we focus on the Millennium Challenge 
Corporation (MCC) and the U.S. Agency for International Development 
(USAID), the U.S. agencies providing the most funding for TCB 
activities in AGOA countries. MCC reports that it conducts TCB-related 
activities in AGOA countries that support its agency goals but does 
not have a specific TCB mission. In addition to providing funding for 
TCB assistance to AGOA countries, USAID includes assistance for 
increasing exports through TCB among its development objectives, and 
also has a worldwide strategy focused entirely on TCB. In this 
strategy, USAID notes that its TCB projects, among other things, will 
help developing countries take advantage of the opportunities created 
by trade and trade preference programs such as AGOA.[Footnote 6] 

Congressional requesters asked us to examine a number of issues 
relating to AGOA countries' trade expansion and economic development, 
and factors affecting their trade with the United States and other 
countries.[Footnote 7] In this report, the second in a series 
responding to the request, we examine (1) U.S. government TCB 
assistance in support of AGOA, and (2) the extent to which USAID has 
made efforts to develop strategic approaches to AGOA utilization. 
[Footnote 8] 

To address both objectives, we interviewed officials from the 
Departments of Commerce, State, and the Treasury; MCC; and USAID; but 
focused on MCC and USAID for the purposes of this report. We also 
interviewed officials from the Office of the U.S. Trade Representative 
(USTR) and the U.S. International Trade Commission (USITC), agencies 
that do not provide funding for U.S. TCB assistance but provided 
additional contextual information on AGOA and TCB. We reviewed 
documents related to the three USAID-funded trade hubs and other U.S. 
TCB assistance, and examples of AGOA-specific and national export 
strategies. We also conducted fieldwork in Ethiopia and Ghana, where 
we interviewed U.S. agency and host government officials, 
representatives from the private sector, and U.S.-funded contractors 
implementing TCB activities. We selected these two countries because 
they represented a cross section of U.S. TCB assistance and are in 
different regions within sub-Saharan Africa, but our findings from 
these countries are not generalizable to the universe of all U.S. TCB 
activities in AGOA countries. To examine U.S. government TCB 
assistance in support of AGOA, we reviewed documents from relevant 
U.S. agencies, including program descriptions and evaluations, and 
analyzed data USAID provided on U.S. TCB obligations for all AGOA 
countries from fiscal years 2001 through 2013. In assessing the data, 
we interviewed key USAID officials and the contractor responsible for 
administering the database, reviewed supporting documentation, and 
determined that the data were sufficiently reliable for our purposes. 
To examine the extent to which USAID has made efforts to develop 
strategic approaches to AGOA utilization, we reviewed documents from 
relevant U.S. agencies, including program descriptions and 
evaluations, and information on AGOA-specific and national export 
strategies from U.S. agencies and host governments.[Footnote 9] 
Appendix I provides a detailed discussion of our objectives, scope, 
and methodology. 

We conducted this performance audit from March 2014 to January 2015 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

African Growth and Opportunity Act: 

AGOA is a trade preference program that provides eligible sub-Saharan 
African countries duty-free access to U.S. markets for more than 6,000 
dutiable items in the U.S. import tariff schedules.[Footnote 10] AGOA 
also includes goals related to U.S. government technical assistance in 
sub-Saharan Africa. Countries must meet certain eligibility criteria 
to take advantage of AGOA preferences,[Footnote 11] and the program 
had 41 such eligible countries as of December 1, 2014.[Footnote 12] 

AGOA legislation directs the President to target technical assistance 
to serve specific TCB-related goals that promote economic reform and 
development, and to develop and implement certain policies aimed at 
encouraging investment in sub-Saharan Africa.[Footnote 13] With regard 
to technical assistance, AGOA directs the President to focus such 
assistance on the following goals: 

1. Develop relationships between U.S. and sub-Saharan African firms 
through business associations and networks. 

2. Provide assistance to the governments of sub-Saharan African 
countries aimed at: 

* liberalizing trade and promoting exports, 

* bringing legal regimes into compliance with the standards of the 
World Trade Organization, 

* making financial and fiscal reforms, and: 

* promoting greater agribusiness linkages. 

3. Address critical agriculture policy issues such as market 
liberalization, agriculture export development, and agribusiness 
investment in processing and transporting agriculture commodities. 

4. Increase the number of reverse trade missions to growth-oriented 
countries in sub-Saharan Africa.[Footnote 14] 

5. Increase trade in services.[Footnote 15] 

6. Encourage greater sub-Saharan African participation in future 
negotiations in the World Trade Organization (WTO) on services and 
making further commitments to encourage the removal of tariff and 
nontariff barriers. 

Trade-Related Challenges in Sub-Saharan Africa: 

According to research literature, AGOA countries face various 
challenges that affect opportunities to facilitate trade. For example, 
firms in AGOA countries may lack the marketing expertise, market 
information, and business contacts to effectively export to the U.S. 
market. Literature also notes challenges sub-Saharan African countries 
face in certain manufacturing sectors, including problems with cost 
and quality of inputs, access to finance, trade logistics such as the 
high cost of transporting goods, and inadequate workforce skills. The 
International Finance Corporation, a member of the World Bank Group, 
has reported that less than a quarter of adults in sub-Saharan Africa 
have access to formal financial services, and lack of access to 
finance is a constraint to economic growth overall, and the growth of 
small and medium-sized enterprises in the region.[Footnote 16] Another 
study found that AGOA apparel production is concentrated in low-skill 
tasks with little knowledge transfer to local workers, and that the 
global competitiveness of AGOA exporters still depends on the 
preferences they receive under AGOA.[Footnote 17] Many AGOA countries 
lack the capacity to produce and export goods in the necessary 
quantity and at the quality U.S. markets require. This same challenge 
may also affect potential investors' decisions about engaging in 
Africa. 

Literature on AGOA and TCB has also shown that poor infrastructure 
conditions in sub-Saharan Africa remain a key challenge that 
undermines export competitiveness. In 2014, USITC reported that weak 
transportation infrastructure, including poor rural roads, inefficient 
port facilities, and burdensome customs procedures are among the 
impediments to export growth and competitiveness for sub-Saharan 
Africa.[Footnote 18] The report noted that a number of factors 
directly affect the cost and timeliness of delivery of goods to the 
U.S. market, including distance to market, perishability of products, 
freight rates, and reliability of trade linkages. 

Trade Capacity Building Assistance: 

Since at least 2001, the United States has provided TCB assistance to 
developing countries to help them participate in and benefit from 
global trade. U.S agencies generally define TCB broadly to include all 
types of development assistance that enhance a country's ability to 
secure benefits from international trade. Among other things, such 
assistance can address (1) the regulatory environment for business, 
trade, and investment; (2) constraints such as low capacity for 
production and entrepreneurship; and (3) inadequate physical 
infrastructure, such as poor transport and storage facilities. USAID 
collects data to identify and quantify the U.S. government's TCB 
activities in developing countries through an annual survey of U.S. 
agencies and maintains the survey results in the U.S. government's 
publicly available online TCB database.[Footnote 19] This database of 
TCB funding defines 14 categories of TCB assistance provided by the 
U.S. government (see appendix II for a detailed list of TCB category 
definitions and examples of related activities). The majority of U.S. 
TCB funding for AGOA countries from 2001 through 2013 was provided for 
three categories of activities: trade-related infrastructure, trade-
related agriculture, and trade facilitation (see figure 1). 

Figure 1: U.S. Trade Capacity Building (TCB) Funding Obligated for 
African Growth and Opportunity Act (AGOA) Countries by Category, 2001-
2013: 

[Refer to PDF for image: pie-chart] 

Total $5.080 billion: 
Trade-related infrastructure: $2.689 billion; 53%; 
Trade-related agriculture: $755 million; 15%; 
Trade facilitation: $564 million; 11%; 
All other TCB categories: $1.072 billion; 21%. 

Source: GAO analysis of USAID data. GAO-15-218. 

Note: This figure includes U.S. government TCB funding provided for 
individual AGOA countries as well as funding that U.S. agencies 
account for under four regional groupings: sub-Saharan Africa, East 
and Central Africa, Western Africa, and Southern Africa. 

[End of figure] 

Funding by Key U.S. Agencies for TCB Assistance for AGOA Countries: 

Total U.S. government funding for TCB assistance for AGOA countries 
from 2001 to 2013 was approximately $5 billion. In that time period, 
U.S. government TCB assistance for AGOA countries peaked in 2008 and 
declined sharply in 2012 (see figure 2). 

Figure 2: U.S. Government Trade Capacity Building (TCB) Funding 
Obligated for African Growth and Opportunity Act (AGOA) Countries by 
Year, 2001-2013: 

[Refer to PDF for image: vertical bar graph] 

Year: 2001; 
Funding obligated: $69 million. 

Year: 2002; 
Funding obligated: $104 million. 

Year: 2003; 
Funding obligated: $126 million. 

Year: 2004; 
Funding obligated: $179 million. 

Year: 2005; 
Funding obligated: $203 million. 

Year: 2006; 
Funding obligated: $399 million. 

Year: 2007; 
Funding obligated: $476 million. 

Year: 2008; 
Funding obligated: $1.016 billion. 

Year: 2009; 
Funding obligated: $722 million. 

Year: 2010; 
Funding obligated: $745 million. 

Year: 2011; 
Funding obligated: $641 million. 

Year: 2012; 
Funding obligated: $191 million. 

Year: 2013; 
Funding obligated: $209 million. 

Source: GAO analysis of USAID data. GAO-15-218. 

Notes: This figure includes U.S. government TCB funding provided for 
individual AGOA countries as well as funding that U.S. agencies 
account for under four regional groupings: sub-Saharan Africa, East 
and Central Africa, Western Africa, and Southern Africa. 

[End of figure] 

Funding in any given year may appear distorted because the Millennium 
Challenge Corporation (MCC) obligates its funding in the year in which 
its compacts enter into force. As a result, MCC funding is 
concentrated in certain years in the figure above, even though the 
distribution of funds occurred over several years. 

MCC was created in 2004 and signed the first compact agreements in 
2005. 

The U.S. government provided funding for TCB assistance from 2001 
through 2013 for all 41 AGOA countries. Sixty-eight percent of all 
U.S. government TCB funding obligated for AGOA countries from 2001 
through 2013 was for 10 of these countries (see table 1). 

Table 1: U.S. Government Trade Capacity Building (TCB) Funding 
Obligated for African Growth and Opportunity Act (AGOA) Countries by 
Country, 2001-2013: 

AGOA country: Tanzania; 
Total TCB funding: $676 million; 
Percentage of total: 13%. 

AGOA country: Senegal; 
Total TCB funding: $517 million; 
Percentage of total: 10%. 

AGOA country: Burkina Faso; 
Total TCB funding: $408 million; 
Percentage of total: 8%. 

AGOA country: Malawi; 
Total TCB funding: $403 million; 
Percentage of total: 8%. 

AGOA country: Ghana; 
Total TCB funding: $373 million; 
Percentage of total: 7%. 

AGOA country: Mozambique; 
Total TCB funding: $292 million; 
Percentage of total: 6%. 

AGOA country: Ethiopia; 
Total TCB funding: $212 million; 
Percentage of total: 4%. 

AGOA country: Benin; 
Total TCB funding: $192 million; 
Percentage of total: 4%. 

AGOA country: South Sudan; 
Total TCB funding: $189 million; 
Percentage of total: 4%. 

AGOA country: Mali; 
Total TCB funding: $189 million; 
Percentage of total: 4%. 

AGOA country: All other AGOA countries[A]; 
Total TCB funding: $1.629 billion; 
Percentage of total: 32%. 

AGOA country: Total; 
Total TCB funding: $5.080 billion; 
Percentage of total: 100%. 

Source: GAO analysis of USAID data. GAO-15-218. 

[A] This table includes U.S. government TCB funding provided for 
individual AGOA countries as well as funding that U.S. agencies 
account for under four regional groupings: sub-Saharan Africa, East 
and Central Africa, Western Africa, and Southern Africa. 

[End of table] 

Although the President affirmed the U.S. government's commitment to 
providing TCB assistance for AGOA countries in August 2014, no single 
agency is responsible. According to our analysis of the U.S. 
government's TCB database, MCC and USAID are the agencies that 
reported providing the most funding for AGOA countries, and accounted 
for 90 percent of all TCB assistance to these countries from 2001 
through 2013 (see figure 3). While USAID funds activities that have 
clear and direct links to TCB, MCC funds activities that may be more 
indirectly related to international trade. MCC conducts TCB-related 
activities that support its broader strategic and agency goals. 
[Footnote 20] In contrast, one of USAID's core development objectives 
is to promote sustainable, broad-based economic growth by helping 
developing countries increase their exports through trade capacity 
building. USAID aims to achieve its TCB goal by supporting 
participation in trade negotiations, implementation of trade 
agreements, and economic responsiveness to trade opportunities. USAID 
also collects data to identify and quantify the U.S. government's TCB 
activities through an annual survey of U.S. agencies and maintains the 
survey results in the U.S. government's publicly available online TCB 
database.[Footnote 21] 

Figure 3: U.S. Government Trade Capacity Building (TCB) Funding 
Obligated for African Growth and Opportunity Act (AGOA) Countries by 
Funding Agency, 2001-2013: 

[Refer to PDF for image: pie-chart] 

Total $5.080 billion: 
Millennium Challenge Corporation (MCC): $2.957 billion; 58%; 
U.S. Agency for International Development (USAID): $1.595 billion; 31%; 
Other U.S. government agencies: $528 million; 10%. 

Source: GAO analysis of USAID data. GAO-15-218. 

Notes: Funding amounts or percentages may not sum to totals because of 
rounding. 

[End of figure] 

This figure includes U.S. government TCB funding provided for 
individual AGOA countries as well as funding that U.S. agencies 
account for under four regional groupings: sub-Saharan Africa, East 
and Central Africa, Western Africa, and Southern Africa. 

MCC was created in 2004 and signed the first compact agreements in 
2005. 

MCC's and USAID's TCB Assistance in Support of AGOA Has Primarily 
Focused on Barriers to Trade-Related Infrastructure and Agriculture, 
and Trade Facilitation: 

MCC Has Taken Steps to Support AGOA through TCB Assistance That Is 
Generally Focused on Trade-Related Infrastructure Needs, but Broader 
Infrastructure Challenges Remain: 

MCC's TCB-related activities in sub-Saharan Africa are supportive of 
AGOA. MCC identifies a relationship between AGOA and the agency's role 
in improving economic growth, including through its trade-related 
infrastructure activities in selected sub-Saharan African countries. 
According to agency officials, MCC's focus on economic growth and 
encouraging private sector investment is in line with the goals of 
AGOA. Furthermore, agency officials said that MCC infrastructure-
related investments have included a number of projects that support 
global trade in sub-Saharan Africa. From 2005 through 2013, MCC funded 
TCB activities in 15 of the 41 AGOA countries (see table 2). 

Table 2: Millennium Challenge Corporation (MCC) Trade Capacity 
Building (TCB) Funding Obligated for African Growth and Opportunity 
Act (AGOA) Countries by Country, 2001-2013: 

AGOA country: Tanzania; 
Total TCB funding: $579 million; 
Percentage of total: 20%. 

AGOA country: Senegal; 
Total TCB funding: $494 million; 
Percentage of total: 17%. 

AGOA country: Burkina Faso; 
Total TCB funding: $396 million; 
Percentage of total: 13%. 

AGOA country: Malawi; 
Total TCB funding: $351 million; 
Percentage of total: 12%. 

AGOA country: Ghana; 
Total TCB funding: $240 million; 
Percentage of total: 8%. 

AGOA country: Mozambique; 
Total TCB funding: $222 million; 
Percentage of total: 8%. 

AGOA country: Benin; 
Total TCB funding: $189 million; 
Percentage of total: 6%. 

AGOA country: Mali; 
Total TCB funding: $136 million; 
Percentage of total: 5%. 

AGOA country: Cape Verde; 
Total TCB funding: $105 million; 
Percentage of total: 4%. 

AGOA country: Lesotho; 
Total TCB funding: $100 million; 
Percentage of total: 3%. 

AGOA country: Namibia; 
Total TCB funding: $81 million; 
Percentage of total: 3%. 

AGOA country: Madagascar; 
Total TCB funding: $52 million; 
Percentage of total: 2%. 

AGOA country: Zambia; 
Total TCB funding: $6 million; 
Percentage of total: less than 1%. 

AGOA country: Liberia; 
Total TCB funding: $4 million; 
Percentage of total: less than 1%. 

AGOA country: São Tomé and Príncipe; 
Total TCB funding: $4 million; 
Percentage of total: less than 1%. 

AGOA country: Total; 
Total TCB funding: $2.957 billion; 
Percentage of total: 100%. 

Source: GAO analysis of USAID data. GAO-15-218. 

Notes: Funding amounts or percentages may not sum to totals because of 
rounding. 

MCC was created in 2004 and signed the first compact agreements in 
2005. 

[End of table] 

MCC's TCB funding for AGOA countries has supported a range of TCB 
activities, largely focused on trade-related infrastructure. MCC's TCB 
assistance in AGOA countries has covered 10 of the 14 TCB categories, 
with the majority of funding, over 75 percent, concentrated on trade-
related infrastructure (see figure 4).[Footnote 22] 

Figure 4: Millennium Challenge Corporation (MCC) Trade Capacity 
Building (TCB) Funding Obligated for African Growth and Opportunity 
Act Countries by Category, 2001-2013: 

[Refer to PDF for image: pie-chart] 

Total $2.957 billion: 
Trade-related infrastructure: $2.282 billion: 77%; 
Trade-related agriculture: $270 million; 9%; 
Financial sector: $124 million; 4%; 
All other TCB categories: $281 million; 10%. 

Source: GAO analysis of USAID data. GAO-15-218. 

Note: MCC was created in 2004 and signed the first compact agreements 
in 2005. 

[End of figure] 

MCC's trade-related infrastructure projects in AGOA countries cover a 
range of activities including building roads, improving ports, and 
expanding access to electricity. For example, MCC compacts in 
Mozambique and Malawi include large infrastructure components, as 
described below: 

* Mozambique. MCC signed a compact with Mozambique in 2007 for about 
$506.9 million, of which about $222 million was obligated for TCB-
related activities, mostly concentrated on trade-related 
infrastructure. This compact included $176 million in trade-related 
infrastructure assistance for a roads project rehabilitating 491 
kilometers of key segments of the country's transportation network. 
The project aimed to improve access to markets, resources, and 
services; reduce transport costs for the private sector; and expand 
connectivity across the region. 

* Malawi. MCC signed a compact with Malawi in 2011 for $350.7 million, 
and data show that the entire amount was obligated for trade-related 
infrastructure activities. Specifically, the compact is a single-
sector power revitalization project that aims to increase the capacity 
and stability of the national electricity grid and bolster the 
efficiency and sustainability of hydropower generation. 

Officials we spoke to in Ghana and Ethiopia, the two AGOA countries 
where we conducted fieldwork, highlighted a range of ongoing 
infrastructure improvements and challenges. Business representatives 
in Ghana, where MCC funded $240 million in TCB-related assistance, 
noted that U.S. TCB activities had helped to reduce problems with land 
transportation. In Ethiopia, a representative from local business 
noted that infrastructure challenges had been diminished through 
improvements in transportation, which had reduced costs for importing 
and exporting goods. Officials and local business representatives in 
both Ethiopia and Ghana also cited a range of ongoing infrastructure 
challenges that acted as an impediment to conducting business. For 
example, in Ethiopia, officials cited infrastructure issues, among 
others, as an impediment to conducting business in the country, and 
representatives of local businesses noted that further investment was 
needed in services such as power, roads, and telecommunications. In 
addition, officials in Ghana stated that port congestion caused 
delays, and the manufacturing sector was diminished partly because of 
a lack of access to reliable power.[Footnote 23] 

To further address infrastructure-related challenges in Africa, the 
U.S. government introduced two new initiatives in 2013 that will 
complement AGOA. Power Africa is designed to double the number of 
people with access to power in sub-Saharan Africa with an initial 5-
year commitment through 2018.[Footnote 24] According to USTR, the 
initiatives of Power Africa are vital complements to AGOA. Power 
Africa is supported by 12 U.S. government agencies and coordinated by 
USAID.[Footnote 25] Trade Africa is a partnership between the United 
States and sub-Saharan African governments to increase internal and 
regional trade within Africa, and expand trade and economic ties among 
Africa, the United States, and other global markets.[Footnote 26] 

USAID Has Made Efforts to Support AGOA by Funding Trade-Related 
Agriculture and Trade Facilitation Activities, but Challenges Remain 
in Facilitating Exports under AGOA: 

USAID's TCB funding has supported a range of TCB activities for AGOA 
countries, with trade-related agriculture and trade facilitation being 
the two largest categories. USAID has funded TCB assistance activities 
in 39 of 41 AGOA countries; see table 3 for AGOA countries with the 
highest USAID TCB funding.[Footnote 27] 

Table 3: USAID Trade Capacity Building (TCB) Funding Obligated for 
African Growth and Opportunity Act (AGOA) Countries by Country, 2001-
2013: 

AGOA country: South Sudan; 
Total TCB funding: $189 million; 
Percentage of total: 12%. 

AGOA country: Ethiopia; 
Total TCB funding: $184 million; 
Percentage of total: 12%. 

AGOA country: Ghana; 
Total TCB funding: $86 million; 
Percentage of total: 5%. 

AGOA country: Uganda; 
Total TCB funding: $74 million; 
Percentage of total: 5%. 

AGOA country: Mozambique; 
Total TCB funding: $59 million; 
Percentage of total: 4%. 

AGOA country: Rwanda; 
Total TCB funding: $54 million; 
Percentage of total: 3%. 

AGOA country: Tanzania; 
Total TCB funding: $53 million; 
Percentage of total: 3%. 

AGOA country: Mali; 
Total TCB funding: $49 million; 
Percentage of total: 3%. 

AGOA country: Liberia; 
Total TCB funding: $45 million; 
Percentage of total: 3%. 

AGOA country: Nigeria; 
Total TCB funding: $44 million; 
Percentage of total: 3%. 

AGOA country: All other AGOA countries[A]; 
Total TCB funding: $757 million; 
Percentage of total: 47%. 

AGOA country: Total; 
Total TCB funding: $1.595 billion; 
Percentage of total: 100%. 

Source: GAO analysis of USAID data. GAO-15-218. 

Notes: Funding amounts or percentages may not sum to totals because of 
rounding. 

[A] This table includes USAID TCB funding provided for individual AGOA 
countries as well as funding that USAID accounts for under four 
regional groupings: sub-Saharan Africa, East and Central Africa, 
Western Africa, and Southern Africa. According to USAID, funding for 
regional trade hubs is obligated to East and Central Africa, Western 
Africa, and Southern Africa. Sub-Saharan Africa includes TCB 
assistance that benefits multiple countries across different regions. 

[End of table] 

USAID's TCB assistance activities in AGOA countries covers all 14 TCB 
categories, with the majority of funding, over 75 percent, 
concentrated on trade-related agriculture, trade facilitation, and 
trade-related infrastructure (see figure 5). 

Figure 5: USAID Trade Capacity Building (TCB) Funding Obligated for 
African Growth and Opportunity Act (AGOA) Countries by Category, 2001-
2013: 

[Refer to PDF for image: pie-chart] 

Total $1.595 billion: 
Trade-related agriculture: $456 million; 29%; 
Trade facilitation: $452 million; 28%; 
Trade-related infrastructure: $303 million; 19%; 
All other TCB categories: $384 million; 24%. 

Source: GAO analysis of USAID data. GAO-15-218. 

Note: This figure includes USAID TCB funding provided for individual 
AGOA countries as well as funding that USAID accounts for under four 
regional groupings: sub-Saharan Africa, East and Central Africa, 
Western Africa, and Southern Africa. According to USAID, funding for 
regional trade hubs is obligated to East and Central Africa, Western 
Africa, and Southern Africa. Sub-Saharan Africa includes TCB 
assistance that benefits multiple countries across different regions. 

[End of figure] 

From 2002 to 2004, USAID established three regional trade hubs in sub-
Saharan Africa that serve as primary implementers of U.S. TCB 
assistance for sub-Saharan African countries (see figure 6).[Footnote 
28] These USAID-funded trade hubs are staffed with regional advisers 
who provide a range of services to U.S. agencies, African governments, 
and the private sector, noted as follows: 

* East Africa trade hub, established in Nairobi, Kenya, in 2002. This 
hub aims to increase food security and economic growth in the 
following 9 East or Central African countries: Burundi, Ethiopia, 
Kenya, Madagascar, Mauritius, Rwanda, South Sudan, Tanzania, and 
Uganda. 

* West Africa trade hub, established in Accra, Ghana, in 2003. This 
hub focuses on addressing critical issues that hamper export 
competitiveness such as high transport and telecommunications costs, 
limited access to finance, and inconsistent implementation of regional 
trade policies in 20 West African countries: Benin, Burkina Faso, 
Cameroon, Cape Verde, Chad, Côte d'Ivoire, Gabon, The Gambia, Ghana, 
Guinea, Guinea-Bissau,[Footnote 29] Liberia, Mali, Mauritania, Niger, 
Nigeria, São Tomé and Príncipe, Senegal, Sierra Leone, and Togo. 

* Southern Africa trade hub, established in Gaborone, Botswana, in 
2004. This hub's primary goals are to increase international 
competitiveness, as well as intraregional trade and food security, by 
promoting greater competitiveness in agriculture value chains, 
increasing investment and export opportunities in the textile and 
apparel sector, and supporting a better business-enabling environment 
in 8 Southern African countries: Botswana, Lesotho, Malawi, 
Mozambique, Namibia, South Africa, Swaziland, and Zambia. 

Figure 6: Sub-Saharan African Countries Supported by USAID-Funded 
Regional Trade Hubs, as of December 2014: 

[Refer to PDF for image: illustrated map of Africa] 

West Africa trade hub: Accra, Ghana; 
East Africa trade hub: Nairobi, Kenya; 
Southern Africa trade hub: Gaborone, Botswana. 

AGOA country West Africa trade hub supports: 
Benin; 
Burkina Faso; 
Cameroon; 
Cape Verde; 
Chad; 
Côte d'Ivoire; 
Gabon; 
Ghana; 
Guinea; 
Liberia; 
Mali; 
Mauritania; 
Niger; 
Nigeria; 
São Tomé and Príncipe; 
Senegal; 
Sierra Leone; 
The Gambia; 
Togo; 

AGOA country East Africa trade hub supports: 
Burundi; 
Ethiopia; 
Kenya; 
Madagascar; 
Mauritius; 
Rwanda; 
South Sudan; 
Tanzania; 
Uganda. 

AGOA country Southern Africa trade hub supports: 
Botswana; 
Lesotho; 
Malawi; 
Mozambique; 
Namibia; 
South Africa; 
Swaziland; 
Zambia. 

AGOA country not supported by a trade hub: 
Angola; 
Comoros; 
Republic of the Congo; 
Seychelles. 

Sub-Saharan African country currently not eligible for AGOA: 
Central Africa Republic; 
Democratic Republic of Congo; 
Djibouti; 
Equatorial Guinea; 
Eritrea; 
Guinea-Bissau[A]; 
Somalia; 
Sudan; 
Zimbabwe. 

Source: GAO analysis of USAID data, and Map Resources (map). 
GAO-15-218. 

[A] Although it was not eligible for the African Growth and 
Opportunity Act (AGOA) as of December 1, 2014, according to data from 
USAID, Guinea-Bissau was supported by the West Africa trade hub. On 
December 23, 2014, Guinea-Bissau was designated eligible for AGOA 
benefits. 

[End of figure] 

Along with implementing activities to support U.S. initiatives in 
areas such as food security, USAID-funded trade hubs seek to support 
trade facilitation, market linkages, and information awareness about 
AGOA to AGOA-exporting firms and countries. For example, from 2007 
through 2012, USAID provided funding for activities implemented 
through the West Africa trade hub to address economy-wide constraints 
such as the transport and trade barriers affecting the region's ports, 
corridors, and borders. The trade hub established an advocacy campaign 
to address such trade barriers and help decrease the costs associated 
with trading. The trade hub also worked with governments in the region 
to establish border information centers that help stakeholders 
coordinate, and provide information and assistance to traders at 
borders to ease transport bottlenecks. The trade hub in East Africa 
has helped subsidize the cost to exporters of attending trade shows to 
gain exposure to U.S. markets in sectors including leather goods and 
apparel, and has facilitated U.S. buyers going to sub-Saharan Africa. 
Among its trade-related agriculture activities, the Southern Africa 
trade hub has provided training to medium-and large-scale commodity 
buyers and storage operators trading in maize and soybeans to help 
reduce postharvest loss and improve procurement practices. 

Officials we spoke to in Ethiopia and Ghana cited some improvement in 
areas where USAID has provided TCB assistance while highlighting other 
ongoing challenges related to facilitating exports under AGOA. 
Although the West Africa trade hub began efforts in 2009 to help 
facilitate financial services for local companies, local business 
representatives from the cashew and shea industries in Ghana said lack 
of access to finance and the business community's lack of awareness on 
how to use AGOA remain challenges to utilizing AGOA. A representative 
of the horticulture industry in Ethiopia cited inefficient customs 
processes and lack of access to finance in the country as challenges 
to more fully utilizing AGOA. He also said that while certain 
logistical challenges had been addressed in terms of direct airline 
routes to the United States, increasing awareness of the Ethiopian 
flower industry would help improve access to the U.S. market. The 
owner of a textile goods company who had exported products under AGOA 
said he was unable to obtain certain inputs for his products in 
Ethiopia, a fact that affected decisions on what to produce. 
Furthermore, he said local businesses were rudimentary when AGOA was 
signed, and are only now building export capacity and an understanding 
of the U.S. market. A business representative from the apparel 
industry said that logistics remain a challenge to exports because of 
high transportation costs that may discourage potential buyers. He 
noted the high cost of moving shipments from Ethiopia to the port in 
Djibouti, and also that lengthy transport schedules create longer lead 
times to fill orders. Like other members of the private sector we 
spoke to, he said that local companies have limited access to capital, 
and that obtaining financing requires a number of bureaucratic steps. 

USAID Has Worked with Some Host Governments on Strategic Approaches to 
AGOA Utilization, but Most Host Governments Have Not Established Such 
Approaches: 

USAID Has Worked with Some Host Governments to Develop Strategic 
Approaches to AGOA Utilization: 

USAID works with some host governments to develop strategic approaches 
to increasing AGOA utilization.[Footnote 30] As previously noted, one 
of USAID's core development objectives is to promote sustainable, 
broad-based economic growth by helping developing countries increase 
their exports through trade capacity building. AGOA legislation also 
directs the President, in part, to target assistance to sub-Saharan 
African governments. USAID has identified trade hubs as primary 
implementers of TCB assistance to African governments and 
organizations, among others. USAID, partly through the trade hubs, has 
supported AGOA utilization by collaborating with African governments 
to develop AGOA-specific or national export strategies. In the 
strategy documents, host governments may identify high-priority trade 
and investment sectors, constraints related to AGOA utilization, and 
specific steps to increase exports under AGOA. For example, the East 
Africa trade hub participated in a 2013 workshop with officials from 
the Mauritian government, and helped the host government develop and 
publish its AGOA-specific national strategy, which aims to support the 
ability of Mauritian firms to sell to the U.S. market and leverage 
opportunities that AGOA provides. Data from USAID also indicate that 
trade hubs provided input toward strategies that the Gambia and 
Senegal have developed. 

We previously identified the importance of strategic planning efforts 
in results-oriented management.[Footnote 31] Specifically, we found 
that such strategic planning efforts are the starting point and 
foundation for defining what the organization seeks to accomplish, and 
in identifying the strategies it will use to achieve desired results. 
Furthermore, developing a strategic plan can help clarify 
organizational priorities and unify staff in the pursuit of shared 
goals. If done well, strategic planning fosters informed communication 
between the organization and its stakeholders. In the case of AGOA 
utilization, this may include collaboration between U.S. and host 
governments, and the private sector. 

Literature and trade hub reports have noted the potentially positive 
effects such strategies can have on countries' utilization of AGOA. 
USAID, through its trade hubs, has stated that identifying strategic 
needs and priorities through national strategies can bolster AGOA 
utilization. For example, in a 2013 report prepared for USAID, the 
West Africa trade hub noted the importance of a strategy as part of 
leveraging trade preferences, and the role that USAID and other U.S. 
agencies can play in encouraging strategy development.[Footnote 32] 
The report identified several countries, including Burkina Faso and 
Sierra Leone, that have implemented strategies as tools to better 
utilize AGOA. Similarly, the East Africa trade hub reported that 
national strategies reflect host governments' strategic needs in 
approaching the U.S. market and outline ways governments can utilize 
AGOA. According to contractors who implement activities at one of the 
trade hubs, export strategies allow governments to target specific 
sectors and work with the private sector toward a unified approach. 

African leaders have also articulated the importance of strategic 
approaches to enhancing AGOA utilization. At the 2011 AGOA Forum held 
in Zambia, an African trade minister underscored the importance of 
clear AGOA national strategies because they help ensure that countries 
assess export promotion challenges in a coordinated manner, and U.S. 
agency officials said that African leaders had committed to developing 
more AGOA-related strategies at the August 2014 Africa Leaders Summit. 
Furthermore, in a January 2014 testimony to USITC, a senior African 
official said AGOA countries have recognized the need to address 
various supply-side constraints that have hindered AGOA utilization, 
including poor infrastructure, by developing a coordinated, strategic 
response at the national level.[Footnote 33] This official also noted 
that this strategic exercise would enable AGOA countries to identify 
supply-side constraints and potential responses, and may ultimately 
enable the U.S. government to better support African countries. For 
example, the Ethiopian government has drafted a national strategy that 
identifies high-priority industries that align with AGOA trade 
preferences. While this document is still in draft form, the Ethiopian 
trade ministry notes that its AGOA national strategy is an important 
part of the country's overall growth plan, given that AGOA is a useful 
market opportunity to achieve Ethiopia's larger economic growth 
objectives. According to officials, the government also plans to 
establish an AGOA center to oversee implementation of the strategy. 

Most Host Governments Have Not Established a Strategic Approach to 
AGOA Utilization: 

Though USAID has made efforts to work with host governments on 
developing strategic approaches to AGOA utilization, 14 out of the 41 
current AGOA countries have such strategies in place, according to 
data from USAID (see figure 7).[Footnote 34] According to a white 
paper from the United Nations Economic Commission for Africa and the 
African Union, the lack of a strategic approach on AGOA is a 
significant reason for gaps in AGOA utilization.[Footnote 35] A 2011 
Brookings Institution report[Footnote 36] identified the lack of an 
AGOA national strategy as one factor inhibiting Ghana from fully 
benefiting from AGOA.[Footnote 37] 

Figure 7: African Growth and Opportunity Act (AGOA) Countries That 
Have AGOA-Specific or National Export Strategies, as of December 2014: 

[Refer to PDF for image: illustrated map of Africa] 

West Africa trade hub: Accra, Ghana; 
East Africa trade hub: Nairobi, Kenya; 
Southern Africa trade hub: Gaborone, Botswana. 

AGOA country with an AGOA-specific or national export strategy: 
Botswana; 
Burkina Faso; 
Burundi; 
Ghana; 
Kenya; 
Lesotho; 
Madagascar; 
Malawi; 
Mauritius; 
Senegal; 
Sierra Leone; 
South Africa; 
The Gambia; 
Uganda. 

AGOA country that does not have an AGOA-specific or national export 
strategy: 
Angola; 
Benin; 
Cameroon; 
Cape Verde; 
Comoros; 
Côte d'Ivoire; 
Chad; 
Djibouti; 
Ethiopia; 
Gabon; 
Guinea; 
Liberia; 
Mali; 
Mauritania; 
Mozambique; 
Namibia; 
Niger; 
Nigeria; 
Republic of the Congo; 
Rwanda; 
São Tomé and Príncipe; 
Seychelles; 
South Sudan; 
Swaziland; 
Tanzania; 
Togo; 
Zambia. 

Sub-Saharan African country currently not eligible for AGOA: 
Central Africa Republic; 
Democratic Republic of Congo; 
Equatorial Guinea; 
Eritrea; 
Guinea-Bissau; 
Somalia; 
Sudan; 
Zimbabwe. 

Source: GAO analysis of data provided by USAID and host governments, 
and Map Resources (map). GAO-15-218. 

Note: This figure includes finalized or completed strategies. 

[End of figure] 

According to officials and information from trade hubs, AGOA countries 
may lack these strategies because such efforts have not been 
prioritized in work plans, and because of an absence of political will 
among host governments. Specifically, in its work plans for all three 
trade hub contracts, USAID has noted the importance of coordinating 
with bilateral USAID missions, regional entities in sub-Saharan 
Africa, and host governments, among others. However, USAID only 
included the development of national strategies as a high-priority 
task for the East Africa trade hub, and not for the West and Southern 
Africa trade hubs. Furthermore, a lack of host government interest 
could influence the effectiveness of such efforts. A West Africa trade 
hub report noted that political will is needed to sustain strategy 
development efforts in those AGOA countries that lack such strategies. 
USAID officials also said that host governments must request and 
initiate the process of developing these strategies, and the lack of 
political will to motivate these efforts may be one reason some AGOA 
countries do not have such a strategic approach. For example, 
according to literature, some USAID TCB assistance programs in sub-
Saharan Africa have faced challenges in gaining buy-in from regional 
participating governments and in ensuring agreement on the direction 
and pace of adoption of relevant processes and procedures. USAID 
officials acknowledged they could do more to work with host 
governments on strategy development to enhance AGOA utilization, and 
officials said they are starting to work with regional entities to 
develop strategic approaches to export promotion. 

Conclusions: 

The U.S. government has acknowledged the importance of providing TCB 
assistance in support of AGOA, and U.S. agencies have obligated 
approximately $5 billion in TCB assistance for AGOA countries over a 
13-year period. As Congress deliberates reauthorization of the AGOA 
program, policymakers have expressed interest in enhancing eligible 
countries' ability to utilize the program and ensuring that TCB 
assistance is aligned with the program's objectives. A strategic 
approach to AGOA utilization can help eligible countries leverage U.S. 
TCB efforts and trade preferences under AGOA, while a lack of a 
strategic approach to AGOA can result in gaps in program utilization. 
Although USAID has worked with some host governments from AGOA 
countries to develop strategic approaches to program utilization, 
about a third of the 41 AGOA countries currently have strategies that 
reflect AGOA priorities. USAID has not prioritized the development of 
these strategies for all three of its regional trade hubs, which play 
a significant role in implementing TCB in AGOA countries and working 
with host governments. A lack of political will among host governments 
may also pose challenges to developing and sustaining strategic 
approaches related to AGOA. In developing these approaches, eligible 
countries can identify trade barriers that inhibit AGOA utilization 
and articulate a commitment to addressing these barriers. Such 
strategies could also assist U.S. agencies in ensuring that TCB 
assistance is aligned with host government priorities and is 
addressing gaps in AGOA utilization. 

Recommendation for Executive Action: 

To enhance eligible countries' ability to utilize the AGOA program and 
ensure that TCB assistance is aligned with program objectives, we 
recommend that the Administrator of USAID work with more host 
governments to develop strategic approaches to promoting exports under 
AGOA. 

Agency Comments and Our Evaluation: 

We received written comments on a draft of this report from USAID, 
which are reprinted in appendix III. USAID stated that it agreed with 
the report's overall findings, conclusions, and recommendations. USAID 
also made a number of observations and comments related to the 
findings and recommendation in the report. 

USAID commented that our report does not provide sufficient data to 
demonstrate the linkage between host government strategic approaches 
and AGOA utilization. However, as we point out in our report, such 
strategies can have potentially positive effects on countries' 
utilization of AGOA. We cite prior GAO work that notes the importance 
of strategic planning efforts in results-oriented management; and 
literature, trade hub reports, and statements from African leaders 
that also emphasize the importance of strategic approaches to 
enhancing AGOA utilization. 

USAID stated that our report does not include the point that the 
productivity of African businesses is negatively impacted by a lack of 
access to reliable electricity. However, our report does in fact note 
observations from our field work in Ghana and Ethiopia regarding 
challenges resulting from lack of access to power. 

Finally, USAID explained that its trade hubs are designed as regional 
programs and therefore often prioritize regional efforts over 
bilateral strategy development. In our report we acknowledge the 
regional focus of USAID-funded trade hubs and also note that USAID is 
starting to work with regional entities to develop strategic 
approaches to export promotion. 

Commerce, State, the Treasury, MCC, USITC, and USTR also received a 
draft copy of the report but did not provide formal comments. USAID, 
USITC, and USTR provided technical comments, which we have 
incorporated in the report, as appropriate. 

We are sending copies of this report to the appropriate congressional 
committees, the Secretaries of Commerce, State, and the Treasury; the 
Chief Executive Officer of MCC; the Administrator of USAID; the 
Chairman of USITC; the U.S. Trade Representative; and other interested 
parties. In addition, the report is available at no charge on the GAO 
website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-8612 or GianopoulosK@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. GAO staff who made key 
contributions to this report are listed in appendix IV. 

Signed by: 

Kimberly Gianopoulos: 
Director, International Affairs and Trade: 

List of Requesters: 

The Honorable Chris Coons: 
United States Senate: 

The Honorable Bob Corker: 
United States Senate: 

The Honorable Jeff Flake: 
United States Senate: 

The Honorable Orrin G. Hatch: 
United States Senate: 

The Honorable Johnny Isakson: 
United States Senate: 

The Honorable Robert Menendez: 
United States Senate: 

The Honorable Ron Wyden: 
United States Senate: 

The Honorable Karen Bass: 
House of Representatives: 

The Honorable Eliot L. Engel: 
House of Representatives: 

The Honorable Sander M. Levin: 
House of Representatives: 

The Honorable Devin Nunes: 
House of Representatives: 

The Honorable Charles B. Rangel: 
House of Representatives: 

The Honorable Edward R. Royce: 
House of Representatives: 

The Honorable Christopher H. Smith: 
House of Representatives: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objectives were to examine (1) U.S. government trade capacity 
building (TCB) assistance in support of the African Growth and 
Opportunity Act (AGOA), and (2) the extent to which the U.S. Agency 
for International Development (USAID) has made efforts to develop 
strategic approaches to AGOA utilization. 

To address both objectives, we interviewed officials from the 
Departments of Commerce, State, and the Treasury; the Millennium 
Challenge Corporation (MCC); and USAID, but focused on MCC and USAID 
for the purposes of this report because these agencies obligated the 
highest amounts of TCB funding from fiscal years 2001 through 2013. We 
also interviewed officials from the Office of the U.S. Trade 
Representative and the U.S. International Trade Commission (USITC), 
agencies that do not provide funding for U.S. TCB assistance but 
provided additional contextual information on AGOA and TCB. We 
reviewed documents including literature on AGOA and TCB; statements of 
work, evaluations, and annual reports for the three USAID-funded trade 
hubs; program documents for MCC activities in sub-Saharan Africa; and 
examples of AGOA-specific and national export strategies. We also 
conducted fieldwork in Ethiopia and Ghana, countries we selected 
because they represented a cross section of U.S. TCB assistance and 
are in different regions within sub-Saharan Africa, thereby also 
providing insight on two out of the three trade hubs. In each country, 
we interviewed U.S. agency officials, host government officials, 
representatives from the private sector who had insights on U.S. TCB 
assistance, and contractors implementing TCB activities. Our findings 
from these countries are not generalizable to the universe of all U.S. 
TCB activities. 

To examine U.S. government TCB assistance in support of AGOA, we 
reviewed documents from relevant U.S. agencies, including program 
descriptions and evaluations, and analyzed data on U.S. TCB funding to 
AGOA countries. We focused our analysis on the U.S. agencies that 
provided the highest amounts of TCB funding for AGOA countries from 
fiscal years 2001 through 2013. We analyzed data USAID provided on 
annual U.S. TCB obligations for activities in all AGOA countries from 
fiscal years 2001 through 2013 by year, agency, country, and TCB 
category. These data are reported in the U.S. government TCB database, 
but we requested data directly from USAID to facilitate our analysis 
of the data for the purposes of this report. We also relied on the 
data and information from the TCB database, such as TCB activity 
descriptions. In our analysis of TCB funding data, we built upon 
information collected for prior GAO reports on TCB that used data from 
the TCB database.[Footnote 38] Data from the TCB database were deemed 
reliable for our prior reports on TCB.[Footnote 39] For this report, 
we determined that the data were sufficiently reliable to identify TCB 
funding by agency, country, category, and year. Furthermore, in 
assessing the data, we interviewed key USAID officials responsible for 
administering the database and reviewed supporting documentation. 

To examine the extent to which USAID has made efforts to develop 
strategic approaches to AGOA utilization, we reviewed documents from 
relevant U.S. agencies, including program descriptions and 
evaluations, and information on AGOA-specific and national export 
strategies from U.S. agencies and host governments. In addition, we 
discussed the development of these strategic approaches with U.S. and 
foreign government officials. 

We conducted this performance audit from March 2014 to January 2015 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: U.S. Government Trade Capacity Building (TCB) Database 
Definitional Categories and Examples of Activities in African Growth 
and Opportunity Act (AGOA) Countries: 

As we noted in 2011, the U.S. Agency for International Development 
(USAID) collects data to identify and quantify the U.S. government's 
trade capacity building (TCB) activities in developing countries 
through an annual survey of U.S. agencies.[Footnote 40] 

TCB Category Definitions: 

The U.S. government TCB database defines the categories as follows: 

* World Trade Organization (WTO) Accession and Compliance: support for 
countries to benefit from membership in the WTO, or to understand 
fully the benefits of membership. Also assistance to help countries in 
the WTO accession process meet the requirements of accession. This 
category includes assistance to meet the obligations of the specific 
WTO agreements, except for Agreements on Sanitary and Phyto-Sanitary 
Measures (SPS), Technical Barriers to Trade (TBT), Intellectual 
Property Rights (IPR), and Trade-related Procurement. Those four 
agreements benefit from TCB in their own categories. 

* Sanitary and Phyto-Sanitary Measures: support for countries to meet 
SPS standards for trade and to comply with the WTO Agreement on SPS. 

* Technical Barriers to Trade: support for countries to reduce 
technical barriers to trade and to comply with the WTO Agreement on 
TBT. 

* Intellectual Property Rights: support for countries to observe 
international standards on intellectual property rights protection and 
to comply with the WTO Agreement on IPR. 

* Trade-Related Procurement: support for increased trade related to 
government procurement and to comply with the WTO Agreement on 
Government Procurement. 

* Trade Facilitation: generally defined as assistance in lowering the 
costs of engaging in, or eliminating obstacles to, international trade 
flows. Trade facilitation (for 2011) is a sum of the following four 
subcategories: 

- Customs Operations: includes assistance to help countries modernize 
and improve their customs offices. 

- Trade Promotion: includes assistance to increase market 
opportunities for developing country and transition economy producers. 

- Enterprise Development: includes support to improve the associations 
and networks in the business sector, as well as to enhance the skills 
of business people engaged in trade. Also includes assistance to help 
countries acquire and use information technology to promote trade by 
creating business networks and disseminating market information. 

- Free Trade Agreements (FTA) and Trade Integration: includes 
assistance to an FTA, a regional trade agreement (RTA), or an 
individual country that increases the ability of the RTA to facilitate 
trade. It can also include assistance to a potential member of an RTA 
that improves the analytical capacity of the country's government with 
respect to RTA issues.[Footnote 41] 

* Trade-Related Labor: assistance to support the enforcement of labor 
standards and worker rights, development of trade unions and dispute 
resolution mechanisms, strategies for workforce development and worker 
training, and the elimination of child labor. 

* Financial Sector: support for financial sector work, monetary and 
fiscal policy, exchange rates, commodity markets, and capital markets. 

* Trade-Related Infrastructure: assistance to establish trade-related 
telecoms, transport, ports, airports, power, water, and industrial 
zones. 

* Environmental Sector Trade and Standards: assistance to establish 
environmental standards or to promote environmental technology. 

* Competition Policy, Business Environment, and Governance: support 
for the design and implementation of antitrust laws, as well as of 
laws and regulations related to investment and investor protections. 
Includes support for legal and institutional reform to improve 
governance and make policies more transparent, and assistance to help 
the different agencies of a host country government function more 
effectively in the trade policy arena. 

* Trade-Related Agriculture: support for trade-related aspects of the 
agriculture and agribusiness sectors.[Footnote 42] 

* Trade-Related Services: includes support to help developing 
countries and transition economies increase their flows of trade in 
services. Services Trade Development is a sum of two subcategories: 

- Trade-Related Services (excluding tourism): assistance to help 
countries develop trade in services in all sectors other than tourism, 
including financial services, energy, transportation, and education. 

- Trade-Related Tourism: assistance to help countries expand their 
international tourism sectors, including eco-tourism. 

* Other Trade Capacity Building: A small number of TCB activities did 
not fit in any of the above categories, including some activities of a 
crosscutting nature. These were categorized as "Other Trade Capacity 
Building." 

Table 4: Examples of U.S. Trade Capacity Building (TCB) Assistance 
Activities in African Growth and Opportunity Act (AGOA) Countries, by 
TCB Assistance Category: 

TCB category: World Trade Organization (WTO) accession and compliance; 
U.S. TCB assistance activities in AGOA countries: In Ethiopia, the U.S. 
government supported a WTO accession project that aimed to promote 
policy and legal reform to help bring the country's trade regime into 
line with WTO rules; build political, public, and private sector 
support for accession; and develop institutional capacity within the 
government to analyze trade policy measures. 

TCB category: Sanitary and phyto-sanitary measures; 
U.S. TCB assistance activities in AGOA countries: In Burkina Faso, the 
U.S. government provided technical assistance to the Ministry of 
Commerce that aimed to improve the country's sanitary and phyto-
sanitary inspection and compliance regime. 

TCB category: Technical barriers to trade; 
U.S. TCB assistance activities in AGOA countries: In Zambia, the U.S. 
government supported a project that aimed to reduce barriers to trade 
and investment through assistance for a small-claims court system. 
This project aimed to assist in the speedy resolution of internal 
trade disputes and increase capacity for external trade. 

TCB category: Intellectual property rights; 
U.S. TCB assistance activities in AGOA countries: In Liberia, the U.S. 
government supported the development and implementation of an 
intellectual property policy framework, strengthening of enforcement, 
and provision of training to educate relevant stakeholders. 

TCB category: Trade-related procurement; 
U.S. TCB assistance activities in AGOA countries: In South Sudan, the 
U.S. government provided assistance to the Ministry of Petroleum to 
increase petroleum exports and nonpetroleum exports, and helped ensure 
that the country's fiscal policies provided business-friendly tax 
structures. 

TCB category: Trade facilitation; 
U.S. TCB assistance activities in AGOA countries: In Burundi, U.S. 
government assistance aimed to diversify rural economic opportunities 
and strengthen trade capacity through technical and trade promotional 
assistance to producers and small-and medium-sized enterprises in the 
coffee, horticulture, and dairy sectors. 

TCB category: Trade-related labor; 
U.S. TCB assistance activities in AGOA countries: In Lesotho, the U.S. 
government supported improvements in enterprises' adherence to 
international core labor standards and national labor law, enabling 
these enterprises to compete in global markets. 

TCB category: Financial sector; 
U.S. TCB assistance activities in AGOA countries: In Ghana, the U.S. 
government provided assistance to the Ministry of Finance to establish 
a debt management unit, ensuring domestic debt sustainability and 
coordination between the ministry and the Bank of Ghana. 

TCB category: Trade-related infrastructure; 
U.S. TCB assistance activities in AGOA countries: In Benin, the U.S. 
government supported assistance to improve port performance and 
security, expand capacity, and reduce costs. Assistance also focused 
on reducing delays at the port and increasing the volume of imports 
and exports. 

TCB category: Environmental sector trade and standards; 
U.S. TCB assistance activities in AGOA countries: In Malawi, the U.S. 
government provided assistance to community-based natural resource 
management initiatives that generate income and provide incentives for 
sustainable resource use and biodiversity conservation. 

TCB category: Competition policy, business environment, and governance; 
U.S. TCB assistance activities in AGOA countries: In Tanzania, the U.S. 
government provided assistance to technical services that aimed to 
improve the country's economic performance. Areas covered include 
agribusiness diagnostics, private sector health diagnostics, and women-
focused research and reforms. 

TCB category: Trade-related agriculture; 
U.S. TCB assistance activities in AGOA countries: In Kenya, the U.S. 
government provided assistance to a horticulture development program 
that aimed to increase smallholder farmers' incomes through market 
growth, enhancements of U.S.-Kenya trade, and support for tree crops. 

TCB category: Trade-related services; 
U.S. TCB assistance activities in AGOA countries: In Madagascar, U.S. 
government assistance for a forest ecosystems conservation program 
promoted natural products such as medicinal plants and spices, and 
ecotourism development through training tour operators. 

TCB category: Other trade capacity building; 
U.S. TCB assistance activities in AGOA countries: In Nigeria, the U.S. 
government provided support for customs reform and modernization, 
transport corridor improvements, and trade capacity building. 

Source: GAO analysis of data from the U.S. government TCB database. 
GAO-15-218. 

[End of table] 

[End of section] 

Appendix III: Comments from the U.S. Agency for International 
Development: 

USIAD: 
From The American People: 

December 19, 2014: 

Kimberly Gianopoulos: 
Director, International Affairs and Trade: 
U.S. Government Accountability Office: 
Washington, DC 20548: 

Dear Ms. Gianopoulos: 

I am pleased to provide USAID's formal response to the Government 
Accountability Office (GAO) draft report entitled, "African Growth and 
Opportunity Act: USAID Could Enhance Utilization by Working with More 
Countries to Develop Export Strategies" (GAO 15-218). 

This letter, together with the enclosed USAID comments, is provided 
for incorporation as an appendix to the final report. 

Thank you for the opportunity to respond to the GAO draft report and 
for the courtesies extended by your staff in the conduct of this audit 
review. 

Sincerely, 

Signed by: 

Angelique M. Crumbly: 
Assistant Administrator: 
Bureau for Management: 
U.S. Agency for International Development: 

Enclosure: a/s. 

USAID Comments on GAO Draft Report: No. GAO-15-218: 

Recommendation: To enhance eligible countries' ability to utilize the 
AGOA program and ensure that TCB assistance is aligned with program 
objectives, we recommended that the Administrator of USAID work with 
more host governments to develop strategic approaches to promoting 
exports under AGOA. 

USAID Response: USAID agrees with the report's overall findings, 
conclusions, and recommendation with the following observations and 
comments. 

As noted in the report, USAID's capacity to work with host governments 
relies heavily on the desire and capacity of the host government to 
promote exports under AGOA. A lack of host government interest 
significantly influences the effectiveness of such efforts and the 
recommendation should reflect that constraint. Additionally, while the 
governments are important in this process, other entities, such as 
Chambers of Commerce, may serve as alternative partners in the 
promotion of AGOA exports. 

The report makes an implicit assumption that countries with AGOA 
strategies use AGOA program export promotions at higher rates than 
those countries without AGOA strategies. Unfortunately, we do not 
believe that this linkage has been clearly made. There is no data in 
the report that shows whether countries with USAID-supported AGOA 
strategies in place (14 out of 41) performed better in terms of AGOA 
utilization. This approach also does not acknowledge that the success 
of strategy implementation truly sits with host country governments 
and each country's public and private sectors. 

Another challenge which was not included in the report is the lack of 
access most African businesses have to reliable electricity. The 
International Energy Agency (an international organization of which 
the U.S. is a member) notes in its 2014 Africa Energy Outlook that 
"Businesses in sub-Saharan Africa most frequently cite inadequate 
electricity supply as a major constraint on their effective operation. 
It is a widespread problem that affects both countries with large 
domestic energy resources and those that are resource poor. 
Insufficient and inferior power supply has a large impact on the 
productivity of African businesses." 

Finally, please note that the USAID Trade Hubs, designed as regional 
programs, have prioritized support for implementation of regional 
economic community priorities based on regional protocols, which are, 
to a more or less extent, strategies for trade policy reform to 
increase intraregional and export trade. Thus these regional 
priorities have often been prioritized by USAID above bilateral AGOA 
strategy development. 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Kimberly Gianopoulos, (202) 512-8612 or GianopoulosK@gao.gov: 

Staff Acknowledgments: 

* In addition to the contact listed above, Juan Gobel (Assistant 
Director), Diana Blumenfeld, Farhanaz Kermalli, Farahnaaz Khakoo-
Mausel, and Ben Sclafani made key contributions to this report. Godwin 
Agbara, Debbie Chung, Qahira El'Amin, Etana Finkler, Ernie Jackson, 
and Jill Lacey provided additional assistance. 

[End of section] 

Related GAO Products: 

Foreign Assistance: USAID Should Update Its Trade Capacity Building 
Strategy. [hyperlink, http://www.gao.gov/products/GAO-14-602]. 
Washington, D.C.: Sept. 10, 2014. 

African Growth and Opportunity Act: Observations on Competitiveness 
and Diversification of U.S. Imports from Beneficiary Countries. 
[hyperlink, http://www.gao.gov/products/GAO-14-722R]. Washington, 
D.C.: July 21, 2014. 

Sub-Saharan Africa: Trends in U.S. and Chinese Economic Engagement. 
[hyperlink, http://www.gao.gov/products/GAO-13-199]. Washington, D.C.: 
Feb. 7, 2013. 

Foreign Assistance: The United States Provides Wide-ranging Trade 
Capacity Building Assistance, but Better Reporting and Evaluation Are 
Needed. [hyperlink, http://www.gao.gov/products/GAO-11-727]. 
Washington, D.C.: July 29, 2011. 

U.S.-Africa Trade: Options for Congressional Consideration to Improve 
Textile and Apparel Sector Competitiveness under the African Growth 
and Opportunity Act. [hyperlink, 
http://www.gao.gov/products/GAO-09-916]. Washington, D.C.: Aug. 12, 
2009. 

International Trade: U.S. Trade Preference Programs: An Overview of 
Use by Beneficiaries and U.S. Administrative Reviews. [hyperlink, 
http://www.gao.gov/products/GAO-07-1209]. Washington, D.C.: Sept. 27, 
2007. 

Foreign Assistance: U.S. Trade Capacity Building Extensive, but Its 
Effectiveness Has Yet to Be Evaluated. [hyperlink, 
http://www.gao.gov/products/GAO-05-150]. Washington, D.C.: Feb. 11, 
2005. 

[End of section] 

Footnotes: 

[1] AGOA was originally enacted as Pub. L. No. 106-200, May 18, 2000. 
Since its enactment, AGOA has been amended three times, by Pub. L. No. 
107-210, August 6, 2002; Pub. L. No. 108-274, July 12, 2004; and Pub. 
L. No. 109-432, December 20, 2006. 

[2] Trade preference programs offer unilateral tariff reductions to 
eligible developing countries for the import of specified products 
into the United States. AGOA authorizes the President to designate 
countries as eligible to receive AGOA program benefits if they are 
determined to have met certain criteria, including having established, 
or made continual progress toward establishing, market-based 
economies; the rule of law and political pluralism; elimination of 
barriers to U.S. trade and investment; protection of intellectual 
property; systems to combat corruption; policies to reduce poverty and 
increase availability of health care and educational opportunities; 
and protection of human rights and worker rights, including 
elimination of certain child labor practices. In addition, the 
President must determine that countries have not engaged in activities 
that undermine U.S. national security or foreign policy interests, and 
do not engage in gross violations of human rights or provide support 
for acts of terrorism. 

[3] We previously reported that from 2001 to 2008, total U.S. imports 
from these countries, including imports under AGOA, grew from $20 
billion to $82 billion, an increase of 300 percent. However, since 
2008, total imports have decreased by 53 percent. Since 2008, U.S. 
imports under AGOA have declined from $56 billion to $25 billion, a 
decrease of 56 percent. See GAO, African Growth and Opportunity Act: 
Observations on Competitiveness and Diversification of U.S. Imports 
from Beneficiary Countries, [hyperlink, 
http://www.gao.gov/products/GAO-14-722R] (Washington, D.C.: July 21, 
2014). 

[4] TCB broadly describes assistance that positively affects a 
country's ability to secure benefits from international trade. See 
GAO, Foreign Assistance: USAID Should Update Its Trade Capacity 
Building Strategy, [hyperlink, http://www.gao.gov/products/GAO-14-602] 
(Washington, D.C.: Sept. 10, 2014); Foreign Assistance: The United 
States Provides Wide-ranging Trade Capacity Building Assistance, but 
Better Reporting and Evaluation Are Needed, [hyperlink, 
http://www.gao.gov/products/GAO-11-727] (Washington, D.C.: July 29, 
2011); and Foreign Assistance: U.S. Trade Capacity Building Extensive, 
but Its Effectiveness Has Yet to Be Evaluated, [hyperlink, 
http://www.gao.gov/products/GAO-05-150] (Washington, D.C.: Feb. 11, 
2005). 

[5] White House, "Presidential Memorandum-Establishing a Comprehensive 
Approach to Expanding Sub-Saharan Africa's Capacity for Trade and 
Investment" (August 2014), accessed August 5, 2014, [hyperlink, 
http://www.whitehouse.gov/the-press-office/2014/08/04/presidential-
memorandum-establishing-comprehensive-approach-expanding-su]. 

[6] In [hyperlink, http://www.gao.gov/products/GAO-14-602], we 
recommended that the Administrator of USAID update USAID's 2003 TCB 
strategy to reflect the current TCB operating environment. 

[7] In December 2013 during the 113th Congress, various committees and 
subcommittees asked us to review a number of issues as AGOA comes up 
for renewal in 2015. These committees and subcommittees included the 
Chairmen and Ranking Members of the Senate Finance Committee; the 
Senate Foreign Relations Committee; the Senate Finance Subcommittee on 
International Trade, Customs, and Global Competitiveness; the Senate 
Foreign Relations Subcommittee on African Affairs; the House Foreign 
Affairs Committee; the House Ways and Means Committee; the House 
Foreign Affairs Subcommittee on Africa, Global Health, Global Human 
Rights, and International Organizations; and the House Ways and Means 
Subcommittee on Trade. 

[8] [hyperlink, http://www.gao.gov/products/GAO-14-722R]. 

[9] According to USITC, one way to define AGOA utilization is U.S. 
imports under AGOA from an AGOA country as a share of total U.S. 
imports from that country. See J. Bonarriva and J. Guth, AGOA: Trade 
and Investment Performance Overview, United States International Trade 
Commission Publication Number: 4461 (United States International Trade 
Commission, Washington, DC: April 2014). 

[10] The United States has offered tariff reductions for goods from 
most sub-Saharan African countries under the Generalized System of 
Preferences (GSP). The Africa Investment Incentive Act of 2006, Pub. 
L. No. 109-432, div. D, Title VI, expanded the list of products that 
eligible sub-Saharan African countries may export to the United States 
duty-free under GSP, which covers approximately 4,600 items. GSP and 
AGOA eligibility criteria overlap, and countries must be GSP eligible 
to take advantage of trade benefits under AGOA. Though legal 
authorization of the GSP program expired on July 31, 2013, GSP-
eligible imports from AGOA countries will continue to be eligible for 
duty-free entry, pursuant to the provisions of the statute governing 
the AGOA program. 

[11] AGOA contains a list of countries that are potentially eligible 
for AGOA benefits and authorizes the President to designate countries 
as eligible to receive such benefits if the President determines that 
they have met, or are making continual progress toward meeting, a set 
base of requirements, such as the rule of law and political pluralism 
and protection of human rights and workers rights. 

[12] For the purposes of this report, we defined AGOA countries as the 
group of 41 countries that were eligible for AGOA benefits as of 
December 1, 2014. The 41 AGOA countries included in this report are 
Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, 
Chad, Comoros, Republic of Congo, Côte d'Ivoire, Djibouti, Ethiopia, 
Gabon, the Gambia, Ghana, Guinea, Kenya, Lesotho, Liberia, Madagascar, 
Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, 
Nigeria, Rwanda, São Tomé and Príncipe, Senegal, Seychelles, Sierra 
Leone, South Africa, South Sudan, Swaziland, Tanzania, Togo, Uganda, 
and Zambia. As of December 1, 2014, The eight countries in sub-Saharan 
Africa that are not currently eligible for AGOA benefits are Central 
African Republic, Democratic Republic of Congo, Equatorial Guinea, 
Eritrea, Guinea-Bissau, Somalia, Sudan, and Zimbabwe were not eligible 
for AGOA benefits. See figure 6 for a map of sub-Saharan Africa that 
indicates AGOA countries for the purposes of this report. On December 
23, 2014, Guinea-Bissau was designated eligible for AGOA benefits. 
Effective January 1, 2015, the Gambia, South Sudan, and Swaziland were 
no longer designated eligible for AGOA benefits. 

[13] AGOA legislation also directs the President to develop and 
implement policies to encourage investment in eligible sub-Saharan 
African countries with a particular focus on infrastructure, 
information and communication technology, and agriculture processing 
and capacity enhancement. 

[14] According to the U.S. Trade and Development Agency (USTDA), 
reverse trade missions bring foreign buyers to the United States in 
order to observe the design, manufacture, demonstration and operation 
of U.S. products and services that can help them achieve their 
development goals. 

[15] Trade in services refers to the buying and selling of intangible 
products and activities; examples of trade-in-services sectors include 
tourism, financial services, and telecommunications. See GAO, Sub-
Saharan Africa: Trends in U.S. and Chinese Economic Engagement, 
[hyperlink, http://www.gao.gov/products/GAO-13-199] (Washington, D.C.: 
Feb. 7, 2013). 

[16] International Finance Corporation, Access to Finance: Sub-Saharan 
Africa (Johannesburg, South Africa: World Bank Group, 2013). 

[17] Congressional Research Service, African Growth and Opportunity 
Act (AGOA): Background and Reauthorization (Washington, D.C.: July 24, 
2014). 

[18] Bonarriva and Guth, AGOA: Trade and Investment Performance 
Overview (United States International Trade Commission Publication 
Number: 4461). 

[19] [hyperlink, http://www.gao.gov/products/GAO-14-602]. 

[20] In January 2004, Congress established MCC to administer the 
Millennium Challenge Account for foreign assistance. MCC's mission is 
to reduce poverty by supporting sustainable, transformative economic 
growth in partnership with developing countries that create and 
maintain sound policy environments. MCC signs compacts obligating 
funds for such projects with countries it selects as eligible for this 
assistance, according to criteria outlined in MCC's authorizing 
legislation. 

[21] [hyperlink, http://www.gao.gov/products/GAO-14-602]. 

[22] MCC's TCB assistance in AGOA countries has covered the following 
10 TCB categories: competition policy, business environment, and 
governance; environmental standards and trade; financial sector; 
intellectual property rights; trade facilitation; trade-related 
agriculture; trade-related infrastructure; trade-related services; WTO 
accession and compliance; and other TCB. MCC did not provide 
assistance in the following 4 TCB categories: sanitary and phyto-
sanitary measures, technical barriers to trade, trade-related labor, 
and trade-related procurement. 

[23] In August 2014, MCC signed a second compact with Ghana for about 
$498 million to create a financially viable power sector to address 
the needs of households and businesses. 

[24] A partnership among the U.S. government, African governments, the 
private sector, and others, Power Africa aims to expand access to 
electricity to households and businesses and increase Africa's global 
competitiveness. 

[25] The 12 government agencies supporting Power Africa are the 
Departments of Agriculture, Commerce, Energy, State, and the Treasury; 
the Export-Import Bank; MCC; the Overseas Private Investment 
Corporation; U.S. African Development Foundation; USAID; U.S. Army 
Corps of Engineers; and USTDA. 

[26] Trade Africa includes efforts to form public-private partnerships 
to stimulate greater trade in goods under AGOA that incorporate the 
promotion of investment in trade-related infrastructure, among many 
other efforts. 

[27] In addition to providing funding for 39 individual countries, 
USAID also provided funding for sub-Saharan Africa under regional 
groupings, such as East and Central Africa, Western Africa, and 
Southern Africa. 

[28] Although they are AGOA-eligible countries, Angola, Comoros, 
Republic of Congo, Djibouti, and Seychelles are not covered by any of 
the trade hubs. 

[29] Although it was not eligible for AGOA as of December 1, 2014, 
according to data from USAID, Guinea-Bissau was supported by the West 
Africa trade hub. On December 23, 2014, Guinea-Bissau was designated 
eligible for AGOA benefits. 

[30] According to USITC, in 2013, AGOA utilization was 65 percent for 
trade in all products and across all countries. When crude petroleum 
imports are excluded from the calculation, the overall utilization 
rate falls to 31 percent. J. Bonarriva and J. Guth, AGOA: Trade and 
Investment Performance Overview. 

[31] GAO, Agencies' Strategic Plans Under GPRA: Key Questions to 
Facilitate Congressional Review, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-10.1.16] (Washington, D.C.: May 
1997). 

[32] CARANA Corporation, West Africa Trade Hub Final Report, a report 
prepared at the request of USAID, August 2013. 

[33] This testimony was provided at a public hearing held in 
conjunction with USITC's AGOA reports. U.S. International Trade 
Commission, AGOA: Trade and Investment Performance Overview; AGOA: 
Economic Effects of Providing Duty-Free Treatment for Imports; U.S. 
AGOA Rules of Origin: Possible Changes to Promote Regional Integration 
and Increase Exports to the United States Performance Overview; EU--
South Africa FTA: Impact on U.S. Exports to South Africa 
(Investigation Numbers 332-542, 332-544, 332-545, and 332-546) 
(Heritage Reporting Corporation, Washington, D.C.: Jan. 14, 2014). 

[34] According to data from USAID, the 14 countries that had an AGOA-
specific or national export strategy as of December 2014 were 
Botswana, Burkina Faso, Burundi, the Gambia, Ghana, Kenya, Lesotho, 
Madagascar, Malawi, Mauritius, Senegal, Sierra Leone, South Africa, 
and Uganda. 

[35] United Nations Economic Commission for Africa and the African 
Union, How 'AGOA 2.0.' Could Be Different: Outlining Africa's Position 
on the AGOA Review Process (Addis Ababa, Ethiopia: April 2014). 

[36] Elizabeth A. Asante, Simon Bawakyillenuo, and Clement Ahiadeke. 
Brookings Institution, Improving AGOA: Toward a New Framework for U.S.-
Africa Commercial Engagement (Washington, D.C.: May 2011). 

[37] Ghana issued national export strategies in 2013, and Ghanaian 
government officials said they were taking steps to develop an 
implementation plan for those strategies. 

[38] GAO, Foreign Assistance: USAID Should Update Its Trade Capacity 
Building Strategy, [hyperlink, http://www.gao.gov/products/GAO-14-602] 
(Washington, D.C.: Sept. 10, 2014); Foreign Assistance: The United 
States Provides Wide-ranging Trade Capacity Building Assistance, but 
Better Reporting and Evaluation Are Needed, [hyperlink, 
http://www.gao.gov/products/GAO-11-727] (Washington, D.C.: July 29, 
2011); and Foreign Assistance: U.S. Trade Capacity Building Extensive, 
but Its Effectiveness Has Yet to Be Evaluated, [hyperlink, 
http://www.gao.gov/products/GAO-05-150] (Washington, D.C.: Feb. 11, 
2005). 

[39] We identified limitations to the TCB database in our 2011 report 
on TCB, including that the database did not adequately explain 
significant factors driving changes in the composition of TCB funding 
over time. 

[40] [hyperlink, http://www.gao.gov/products/GAO-11-727], 4-5. 

[41] This category does not include TCB assistance in a specific area 
that is being provided to countries through an RTA. For example, 
technical assistance to help RTA member countries comply with SPS 
standards was reported as Trade-Related Agricultural Development or 
the WTO Agreement on SPS Measures. 

[42] Support that is specifically intended to help countries 
participate in the WTO Agreements on Agriculture or SPS Measures is 
not included in this category. 

[End of section] 

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