The expiration of the Africa Growth and Opportunity Act (AGOA) risks destabilising trade relations and jobs across the continent, highlighting urgent geopolitical and economic challenges as African nations seek to preserve market access amid shifting US policies and rising competition from China.
The African continent finds itself confronting a critical economic juncture as the looming expiration of the Africa Growth and Opportunity Act (AGOA) threatens to destabilise key trade relationships and imperil millions of jobs. AGOA, a cornerstone of U.S.-Africa economic cooperation since 2000, has allowed 32 eligible African countries to export thousands of products to the U.S. duty-free, fostering job creation and industrial growth across sectors from textiles to mining. However, the continuation of this partnership now hangs in the balance amid an increasingly protectionist U.S. trade agenda under former President Donald Trump, whose tariffs and diplomatic maneuvers have sparked fears of a continent-wide economic downturn.
The magnitude of this threat is vividly apparent in countries like Kenya and South Africa, whose industries have flourished under AGOA but now face significant disruption. Kenya, which exported goods worth $737 million to the U.S. in the previous year largely within the textile sector, is acutely aware of the stakes. Its textile industry employs approximately 300,000 people—jobs now at risk due to uncertainty over AGOA’s renewal and the imposition of new tariffs. Kenyan Trade Minister Lee Kinyanjui recently reaffirmed the country’s goal to finalize a bilateral trade agreement with the U.S. by the end of 2025 that would replicate AGOA’s duty-free terms, underscoring a desperate effort to avert economic damage. However, this pursuit also highlights a broader continental fracture sparked by Trump’s trade policies, which pit African nations against each other in bilateral negotiations rather than enabling a united continental bloc, thereby diminishing collective bargaining power and regional cohesion.
South Africa, wrestling with an unemployment rate exceeding 30%, has felt the brunt of these policies through a punitive 30% tariff imposed last month by the U.S., the highest in Sub-Saharan Africa. The tariffs exacerbate economic fragility in the region and have triggered urgent diplomatic interventions, including meetings in Washington between South African Trade Minister Parks Tau and U.S. Trade Representative Jamieson Greer. These talks were described as “cordial and constructive,” culminating in a roadmap for continued negotiations aimed at resolving disputes. Nonetheless, the political context complicates economic discussions, as tensions related to South Africa’s affirmative action policies—which address apartheid-era inequalities—and geopolitical stances have become intertwined with trade disputes. There is concern across the continent that economic access to vital markets may come at the cost of political and democratic concessions.
The ripple effects of AGOA’s potential demise extend beyond textiles and manufacturing, threatening entire supply chains, agricultural sectors, and service industries linked to export-oriented production. African industries, many of which represent billions of dollars in investments in infrastructure and workforce development, risk irreversible damage. The consequences are not only economic but also geopolitical, as African countries increasingly pivot toward alternative partnerships to avoid dependence on Washington’s increasingly transactional and politically charged trade approach. China’s role as a growing economic partner, offering trade relations with fewer political strings attached, is becoming a preferred option for many leaders, including Kenya’s President William Ruto. This eastward shift signals a potential strategic realignment of the continent, with significant implications for U.S. influence.
Trade groups and manufacturers across the continent have launched a last-ditch effort to secure AGOA’s extension, lobbying U.S. Congress for a one- or two-year renewal in hopes of staving off economic collapse. Although bipartisan support exists, it remains uncertain whether legislative action will be timely enough to prevent disruption. This uncertainty adds to the urgency facing countries that rely heavily on the program.
International companies are also recalibrating strategies to cope with the new trade environment. Indian textile firm Gokaldas Exports, whose sales largely depend on the U.S. market, is planning to mitigate losses from U.S. tariffs by expanding business in the European Union and the UK, facilitated by the UK-India Free Trade Agreement. Gokaldas aims to increase its revenue share from these markets and bolster production in African countries like Kenya and Ethiopia, where tariffs remain comparatively lower, indicating a diversification approach by global players reacting to U.S. tariff policies.
The clock is ticking as the September deadline for AGOA’s expiration approaches, framing the issue as an economic and political crossroads for Africa. The decisions made in Washington and within African capitals will shape the future of trade, democracy, and economic sovereignty on the continent. While the U.S. remains a vital economic partner—bilateral trade with South Africa alone amounted to $15.1 billion in 2024—the present standoff underscores a broader struggle over whether African nations can maintain autonomy and solidarity or be forced into divisive market access arrangements dictated by external political agendas.
Ultimately, the fate of AGOA is not merely a question of trade policy but a profound test of Africa’s ability to navigate between economic necessity and political independence in a rapidly shifting global arena. The stakes could not be higher, as the continent confronts the risk of economic regression or the promise of renewed integration and growth should a balanced approach to trade be restored.
Source: Noah Wire Services
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