Last week, the United States House of Representatives approved the renewal of the African Growth and Opportunity Act (AGOA). While this step signals relief for African exporters, the continent must build a more independent and sustainable path for economic growth and development.
First enacted in 2000, AGOA provides duty-free access to the U.S. market for over 6,000 product lines from eligible African countries. AGOA’s results have proven massive for many African nations. For instance, World Economic Forum data shows that South Africa’s automotive exports to the United States increased by over 447 percent between 2001 and 2022. The program transformed South Africa into a regional automotive hub, as vehicles and components now account for the bulk of its AGOA-eligible exports to America.
Just as South Africa’s apparel sector flourished under AGOA, Kenya’s apparel sector did the same. Ethiopia also demonstrated the program’s potential impact before the U.S. suspended trade with the country in 2022 for human rights violations. Between 2000 and 2020, Ethiopian exports to the U.S. grew from $29 million to $525 million, and 45 percent of these trades were facilitated under AGOA. The country’s industrial parks, which predominantly produce textiles and garments for the American market, created 90,000 jobs primarily for young women and attracted $740 million in foreign investment.
Despite Congressional Research Service data indicating U.S. AGOA imports totalled $8 billion in 2024 and $9.3 billion in 2023, when the trade policy expired last year September, 32 African nations immediately lost preferential access. This expiration forced importers to pay standard tariffs and created uncertainty that impeded trade flows.
But even before the expiration of AGOA, recent U.S. policies have shown a reduced commitment to trade relations with African nations. Last April, President Donald Trump imposed tariffs on African countries, hitting Lesotho the hardest with a 50 percent rate, the highest tariff imposed globally.
For Lesotho, a landlocked kingdom of 2 million people with a $2.2 billion economy, the tariff threatened livelihood. The textile industry, which employs 35,000 workers and produces garments for brands like Levi’s and Wrangler, faced potential collapse. As of 2024, Lesotho’s exports to the U.S. totalled $237 million, representing over 10 percent of its GDP. Trade Minister Mokhethi Shelile warned that the country faced 20,000 to 30,000 job losses if factories shut down.
Although the U.S. later reduced the tariff to 15 percent, the policy had already caused damage as orders dried up during the period of uncertainty. South Africa also faced a 30 percent tariff despite holding the position of America’s largest sub-Saharan trading partner.
AGOA’s core problem lies in the dependency it creates for many African nations. Although the U.S. House stated the policy would retroactively restore AGOA benefits to September 30 and reimburse importers for duties paid during the gap period, the African Continental Free Trade Area (AfCFTA) offers a more sustainable alternative.
With 54 signatory countries covering a market of 1.3 billion people and a combined Gross Domestic Product (GDP) of $3.4 trillion, AfCFTA represents the world’s largest free trade area by number of member states. The agreement commits members to eliminating tariffs on 90 percent of goods over time, creating regional value chains, and reducing non-tariff barriers in African markets.
The U.S. Senate is expected to consider the AGOA extension in the coming weeks. If Congress passes the bill and the President signs it into law, eligible African countries will gain duty-free access through the end of 2028, covering the remainder of President Trump’s term. Yet, despite the opportunity this presents, signals such as Trump’s reciprocal tariffs serve as a wake-up call for the African continent to utilise a sustainable path for economic growth and development.
