A key element in U.S. policy toward Africa is the potential benefit from increased trade and commercial ties between the United States and Africa. Interest in increasing bilateral commerce began after the end of the apartheid era in South Africa in the early 1990s. In 1993, Congress approved the end of anti-apartheid restrictions, and later that year then-Commerce Secretary Ron Brown led a business delegation to South Africa. In subsequent years, the Administration has also instituted several measures to help sub-Saharan African (SSA) countries and increase U.S. trade and investment in the region. At the same time, Congress developed legislation that sought to improve U.S.-Africa trade relations. In the 1994 legislation to implement the Uruguay Round of multilateral trade agreements ( P.L. 103-465 ), Congress directed the President to develop and implement a comprehensive trade and development policy for the countries of Africa, and subsequently introduced legislation to authorize a new trade and investment policy for sub-Saharan Africa. In 2000, Congress approved the African Growth and Opportunity Act (AGOA; Title I, P.L. 106-200 ). AGOA offers trade preferences and other economic benefits to SSA countries that meet certain criteria, including progress towards a market economy, respect for the rule of law, and human and worker rights. In AGOA, Congress also declared that free-trade agreements should also be negotiated, where feasible, with interested SSA countries. AGOA has been amended several times since its initial enactment. In 2002, Congress amended AGOA to further increase market access for products from SSA. In 2004, Congress passed legislation to extend AGOA benefits beyond the original deadline and to clarify certain provisions. This legislation also included directives to the President on investment initiatives and technical assistance. Congress passed legislation in 2006 to further amend AGOA and extend certain provisions concerning textile and apparel imports to 2012. One of these provisions, the "third-country fabric provision," permits imports, subject to a cap, of apparel made in designated lesser-developed SSA countries of third-country yarns and fabrics (meaning that the yarns and fabrics may come from any country). This provision was recently extended through September 2015. This report examines African economic trends and U.S. trade and investment flows with SSA. It discusses the provisions of AGOA and the changes that have occurred since its enactment. It concludes with a brief discussion of issues for Congress. The historical pattern of contemporary Africa's economic growth provides insights to help understand Africa's current economic situation and policy options. Between 1960 and 1973, which is the period immediately following independence in most African countries, economic growth was reasonably strong in many SSA countries. Most African countries experienced a sharp decline in their growth trends at some point between 1973 and 1980, followed by persistent stagnation until the early 1990s. Average SSA per-capita GDP (PPP data) reached its minimum point in the mid-1990s, and still had not recovered to 1970s levels in 2005. Another factor that characterized growth in many African countries—and in many cases continues to affect economic development patterns—is high economic growth volatility, a common feature in SSA countries' historical trends. A 2007 World Bank study found that SSA has experienced more growth volatility than other regions, resulting in dampened investments and obscuring periods of good performance for some countries. The report found that this volatility has been caused by conflict, poor governance, and fluctuating world commodity prices. The authors of the study contend that reducing volatility is at least as important as promoting growth. In the 1990s, many African countries made a modest recovery until about 1994, but the growth rates for the remainder of the period tended to remain far below the first post-colonial phase. The causes of this period of slow economic growth in the region have been a source of debate among development economists. Analysts have cited poor governance, political instability, geographic features, and historical conditions such as colonialism as different reasons for Africa's economic malaise. Other factors cited included slow accumulation of both human and physical capital, dependence on single commodity exports, low productivity growth and pressures from high population growth rates, and high dependence on foreign aid. Following this period of stagnation, the past decade has seen considerable improvements in governance and economic growth in many parts of Africa, although many countries continue to experience political instability, poor economic performance, and lack of progress in improving social welfare indicators. Poverty and inequitable income distribution also remain common in many countries. Despite these challenges, many countries are experiencing rapid economic growth. The International Monetary Fund (IMF) projects that the SSA region will grow in terms of real GDP by 5.3% in 2012 and 2013 (see Table 1 ). These projections, however, mask significant disparities among the 44 countries the IMF considers in its regional analysis. For example, in its Regional Economic Outlook , released in October 2012, the IMF projected that oil-exporting countries in SSA would experience average real GDP growth of 6.7% in 2012, and 6.0% in 2013. Relatively stable, low-income, non-energy-producing countries (such as Ethiopia, Burkina Faso, and Kenya) are expected to grow on average by 5.9% in 2012 and 6.1% in 2013, while middle income countries (such as South Africa) are projected to grow by 3.4% in 2012 and 3.8% in 2013. The IMF also projects that more than half of the 12 SSA countries identified as "fragile" countries, due to prolonged institutional weakness or conflict (such as the Democratic Republic of Congo, Guinea, and Liberia), are expected to see stronger or stable growth in 2012 (6.6%) and 2013 (5.8%). This improved economic performance may reflect many factors, including better governance, increased trade flows, strong commodity prices, rising aid flows, and debt forgiveness. Rising incomes and expanding urban middle classes in some countries, economic diversification, increased access to communications technologies, and multiple other factors could also contribute to such trends. U.S. foreign direct investment (FDI) flows to the region in 2011 amounted to about $3.1 billion, with South Africa ($722 million), Angola ($707 million), Ghana ($250 million), and Liberia ($113 million) as the major destinations of those investment flows. According to United Nations (UN) data, total world FDI to SSA amounted to about $35 billion in 2011. Leading SSA country destinations for worldwide direct investment in 2011 included Nigeria ($8.9 billion), South Africa ($5.8 billion), and Ghana ($3.2 billion). Despite improved economic performance in many African countries in recent years, the economic challenges facing Africa remain significant. African countries are vulnerable to volatile weather conditions, commodity price fluctuations, and poor road and other infrastructure conditions, as well as ongoing political instability in parts of the continent. Many countries have also faced difficulties in reducing high rates of poverty, improving social welfare indicators, combating corruption, and diversifying their economies. In addition, limited integration of regional trade regimes and transport systems often inhibits intra-regional trade, as well as foreign investment. Many countries' domestic market demand is not large enough to draw the attention of large foreign and U.S. firms, which may prefer to deal with larger regional markets. Much of sub-Saharan Africa's trade with the world is largely still based on primary product exports, such as oil and other mineral fuels (about 54% of its exports to the world by value in 2010); precious stones and metals (10%); and ores, slag, and ash (5%). As a result, many sub-Saharan African countries continue to be vulnerable—as do many developing countries and regions—to the rise and fall of international commodity prices. The HIV/AIDS pandemic is also straining some African economies and threatens to curtail future economic growth. SSA is the region most affected by HIV/AIDS. As of 2010, an estimated 22.9 million people were living with HIV-AIDS in SSA, accounting for 68% of all people living with HIV worldwide. Nine countries with the world's highest HIV prevalence rates worldwide are located in Southern Africa, where an estimated 11.1 million people were living with HIV in 2010. Swaziland has the world's highest prevalence rate (25.9%), and South Africa has the world's largest HIV-positive population (5.6 million). In 2010, about 1.9 million people in SSA contracted HIV and approximately 1.2 million people in the region died from AIDS. The pandemic not only diverts resources from investments in productive resources to social services to care for the sick and dying, but it also erodes human capital by striking some of the most productive members of society: skilled workers, teachers, and professionals. Africa also suffers disproportionately high disease burdens attributable to such illnesses as malaria, tuberculosis and other respiratory diseases, and water-born diarrheal infections, and many countries face severe health care delivery system constraints. The debt burden carried by SSA countries has been identified as a drag on the economies of the region. In 2010, the states of SSA owed foreign creditors an estimated total of $143 billion. SSA's total government debt as a percentage of GDP averaged 33.1% in 2011 (see Table 3 ). Declines in some SSA countries' external debt are due to ongoing comprehensive debt relief initiatives begun in 1996, including the Heavily Indebted Poor Countries Initiative (HIPC), the Multilateral Debt Relief Initiative (MDRI), and the Paris Club agreement with Nigeria. U.S. imports from SSA countries fell in 2008 and 2009, possibly due to the spillover effects of the global financial crisis and falling demand. According to the IMF, however, the SSA region is currently showing solid macroeconomic performance, and economic activity had expanded strongly in 2010 through 2012 to date.