Uganda’s largest exporter of shoes began with Liz Forkin Bohannon, an American, who was looking for a way to help young Ugandan women. She ended up creating a line of sandals and fashion accessories sold around the world.
Sseko Designs’ success is in large part due to the African Growth and Opportunity Act (AGOA), a U.S. law that encourages African companies like Sseko to compete in the U.S. marketplace while at the same time removing barriers to U.S. trade in sub-Saharan Africa. Two-way trade between the U.S. and Africa was valued at nearly $55 billion in 2017 — a $17 billion increase since 2000, when Congress enacted the law.
President Trump’s administration has made free, fair and reciprocal trade a priority. Africa “has a tremendous business potential and [has] huge amounts of different markets,” Trump said last September. “And for American firms, it’s really become a place that they have to go — that they want to go.”
Marketplace solution
When Bohannon arrived in Uganda in 2009 after graduating from college, she noticed that employment opportunities for girls — even academically gifted ones — were scarce. She saw a marketplace solution to this problem. She hired three graduates to work for nine months making leather-based sandals with interchangeable straps. If the young women put half of their salaries into savings for university, Sseko would match their savings with university scholarships at the end of the nine months. So far, Sseko has sent 87 young women from their work/study program to university and will send 19 more in August 2018.
Starting an export company was an ambitious plan for Bohannon, who had studied journalism, not marketing or finance. The learning curve was steep. “I spent hours and hours, probably weeks’ worth of time on the phone trying to figure out harmonized tariff codes and the regulations for exporting our products.”
Then the company discovered AGOA, which has allowed companies in certain African countries to ship their products to the U.S. with reduced or waived tariffs. Those countries must be working to improve their rule of law, human rights, and respect for core labor standards. Additionally, AGOA requires companies that apply for its benefits to meet U.S. market standards for their products. The effort has been worth it for companies like Sseko.
Agnes Netunze, who started as an intern at Sseko and is now its operations manager, described the difference AGOA made in the early days of the startup company. “Before we knew about AGOA, we used to pay heavy duties for our small quantities of shoes,” she said.
Since then, Sseko Designs has grown steadily and is now partnering with artisan groups across East Africa. They have expanded from sandals to handbags and apparel. “For every dollar we save not having to pay import duties, we’re able to pass that on to our customers and able to keep our products more competitive and less niche,” Bohannon said. “We’re so thankful for AGOA and really attribute Sseko being able to continue to grow and thrive to it.”
“Companies using this opportunity are able to get more revenue,” Netunze said, “and different companies use this added revenue differently. Sseko Designs uses it to send girls to university.”
