Two months ago, President Joe Biden removed Uganda from the preferential trading arrangement with the USA, the Africa Growth and Opportunities Act (AGOA). I suspect the main reason was the passing of the Anti-Homosexuality Act (AHA), a barbaric law that only Adolf Hitler would have recognised. Before I delve into Biden’s misguided motives, let me first digress to the mistaken economic beliefs that have driven Western trade policy towards Africa.
AGOA’s aim was to help African countries access the rich USA market and therefore find opportunities for economic growth and development. But as has been the weakness of all such international preferential trading agreements, the assumption was that Africa’s challenge was one of external market access. Yet this is only a part of the problem and I think a smaller part even. All too often, African countries lack the internal institutional and policy environment to allow them benefit from external trading opportunities. Therefore, creating preferential trading arrangements without fixing domestic constraints leads to nowhere.
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Take the example of the Cotonou Agreement, formerly the Lome Convention. That agreement gives African countries quotas to export certain goods duty free to the European Union (EU) market. No African country has ever met her quota. Uganda has a quota to export sugar duty free to the EU. Only recently did our country’s sugar output exceed domestic consumption. Secondly, even without import duties, Uganda’s sugar, which costs $800 per ton to produce, cannot compete with sugar from Brazil which costs $500 per ton. In fact, Uganda has sustained a duty of 100% on imported sugar to sustain local production for four decades now. Therefore, our sugar producers are sustained by punishing the consumer with high prices, not by the business acumen of our sugar manufacturers. This is the longest subsidy manufacturers have enjoyed in Uganda. Even Botswana, Africa’s most economically successful country, has never met its quota under the beef protocol of that agreement.
President Yoweri Museveni specifically was the prime promoter of AGOA. He used his relationship with Bill Clinton and his government to support the passing of this law. Even with the hype around AGOA, Uganda has never exported much of anything to America. Last year, our total exports to that country under AGOA amounted to $12m. Countries like Kenya and South Africa have done a little bit well. But this has been small compared to the countries of East Asia when they got such a chance. Yet even then, Kenya and South Africa have benefited more from AGOA because of their own internal production environment.
Yet, I think Uganda has, with all the constraints it has, been successful at international trade. I suspect this is because of our liberal economic environment. For instance, we have the weakest currency in the region, making our exports competitive in the region. Today, 50% of Uganda’s exports go to her immediate neighbors – Kenya, South Sudan, DRC, Rwanda and Tanzania. In fact, if it were not for our mistakes that led Rwanda to impose a trade embargo on us, and our misguided approach that has allowed Kenya and Tanzania to put severe restrictions on our exports to them without any retaliation, our country would be doing much better.
Now this brings me back to Biden and his removal of Uganda from the beneficiaries of AGOA because of the AHA. Since the end of the Cold War, the collapse of the Soviet Union and the beginning of the unipolar moment, America and her Western allies have been acting like a bull in a china shop. They have used economic sanctions with reckless abandon. Any country that does what they don’t like faces economic sanctions or military invasion. In the last two years alone, the USA has sanctioned nearly 40 countries. Diplomacy as a tool for international relations has been forsaken. Sanctions and military invasions have become the first and only tool.
This approach to international relations is intriguing because rarely in their long history have sanctions altered the behavior of a government: from Cuba to Iran, North Korea, Zimbabwe, Eritrea, to Burma, etc. On the contrary, they tend to be counterproductive. Let us assume that Uganda was doing brisk business with America under AGOA creating jobs for individuals, opportunities for local firms to supply each other, generating tax revenues for the state and earning large sums of foreign exchange for the country. All these benefits would make Ugandans richer and also increase the capacity of the state to deliver public goods and services to the citizens. Ugandans get better educated and exposed, come to live in urban areas and join the middle class. These are the social processes that make people open minded and therefore tolerant of different sexual lifestyles.
So, in removing Uganda from AGOA, Biden is stopping the very process of economic and therefore social change that has a chance to lead to changes in local cultural and moral tastes. A poor rural illiterate Uganda with a small educated urban middleclass isolated from the liberal West is more likely to be homophobic than a prosperous, urban, educated and exposed Uganda with increased access to Western liberal values. Therefore, the solution to the AHA is not economic sanctions but increased economic and cultural intercourse with the USA and her Western liberal allies.
Secondly, these sanctions do not discriminate between homophobes and the rest. Hence, homosexuals, whom this law is meant to protect, and many other Ugandans who risk so much to support LGBTQ rights, would lose jobs and other business opportunities to the same extent as the homophobes who torment them. This has happened with Australia. In response to the AHA, it has imposed severe restrictions on Ugandans traveling to that country. Now a visa application takes six months to process. This policy, allegedly put in place in solidarity with LGBTQ people because of the AHA, harms homosexuals more than their haters. Homosexuals in Uganda now suffer both the law that criminalises their sexual lifestyle and the visa restrictions to countries where they seek sanctuary.
Why do governments with smart and enlightened people make such stupid policy decisions? Western governments rarely make policies by considering their effects on those they claim to defend. It is always about their domestic constituencies. Biden removed Uganda from AGOA not because he believed it would improve homosexual rights in our country but to appease domestic LGBTQ groups and their allies in the Democratic Party. It is sad to note that it is always about them, not us.
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