Heliyon (Jul 2023)
African growth and opportunity act (AGOA) and exports of Sub-Saharan African countries to the United States of America: Does credit matter?
Abstract
The Africa Growth and Opportunity Act was introduced by the United States of America to enable beneficiary countries to boost their export volumes and make way for growth and development. The study aims at estimating the effect of the Act on export from sub-Saharan African countries to the United States of America considering the role of credit. A panel data for 49 countries sourced from IMF DOTS, WDI, and CEPII for the period 1980 to 2020 was employed. Using the GMM, and the differences in differences estimation techniques, the findings showed that the AGOA trade preference has not achieved the purpose for which it was introduced. It is however found that export to the United States can be improved under the trade preference if credit is provided to the private sector. It is therefore recommended that credit accessibility should be made easy to make way for private sector investment in the production process to feed the export sector.
