Future of AGOA and its Impact on African Trade and Agriculture

Understanding AGOA: A Pillar of US-Africa Trade Nearing Expiration

The African Growth and Opportunity Act (AGOA), set to expire in 2025, has been a cornerstone of trade relations between the United States (US) and sub-Saharan Africa since its inception in 2000. By providing duty- and quota-free access to the US market for over 1,800 products (around 90% regarding agri products), AGOA has significantly influenced trade, investment, and industrialization in Africa. However, its uncertain renewal raises concerns about the future of African exports, particularly in agriculture and manufacturing, and the broader implications for trade dynamics.

How AGOA Has Transformed African Exports and Industries

AGOA has been instrumental in diversifying African exports to the US, shifting the focus from raw materials to value-added goods. For instance, countries like Ghana have leveraged AGOA to boost exports of processed items, such as chocolate and other cocoa products, alongside various agricultural goods. Ethiopia has utilized the program to increase shipments of key agricultural exports like specialty coffee, moving beyond raw beans to more differentiated products. Similarly, Mauritius has benefited by expanding its exports of agricultural goods, including sugar and processed foods, to the US market.

Impact on African Agriculture and Food Security

AGOA has been particularly impactful in the agricultural sector, enabling African countries to export products like citrus and nuts duty-free to the US. South Africa, the world’s second-largest citrus exporter, has benefited significantly, with 9% of its citrus exports destined for the US under AGOA. This trade supports approximately 35,000 jobs in South Africa and 20,000 jobs in the US, highlighting the interconnectedness of the two economies.

The potential non-renewal of AGOA poses a significant threat to these industries. For South Africa, the loss of duty-free access could result in over USD 52.27 million (R1 billion) in lost export revenue and jeopardize rural jobs. US consumers would also face higher prices for citrus, as South African imports help stabilize supply during off-seasons for domestic producers.

South African citrus exports under AGOA have shown steady growth since 2017, peaking at USD 150.92 million in 2023, underscoring the importance of this market access.

Figure 1. Citrus Fruit from South Africa to the US by Import Value 2017-2024

Source: Tridge

The Path Forward: AGOA Renewal and Synergy with AfCFTA

Looking ahead, the African Continental Free Trade Area (AfCFTA) presents an opportunity to reframe US-Africa trade relations. By aligning AGOA with AfCFTA’s goals of regional integration and intra-African trade, the US could support Africa’s industrialization while securing access to critical minerals and agricultural products. Instead of solely focusing on the final exporting country, AGOA-related support or incentives could target intermediate goods traded between African nations under AfCFTA, which are then used in products ultimately destined for the US market. An example would be supporting the production of high-quality yarn in one AfCFTA country that is then used to manufacture AGOA-eligible apparel in another.

Conclusion

AGOA has undeniably shaped US-Africa trade over the past two decades, fostering diversification and providing crucial market access, particularly for value-added agricultural products like South African citrus. However, the program stands at a critical juncture.

The uncertainty surrounding its renewal, driven by evolving US trade policy considerations, geopolitical factors, and the domestic legislative process, poses significant risks to industries and economies that have built strategies around its benefits. As illustrated, while alternative markets in Europe, Asia (with considerable growth potential), and the Middle East exist and must be actively pursued as part of a necessary diversification strategy, losing the preferential access to the large US market provided by AGOA would represent a substantial challenge for exporters like those in the South African citrus sector.

The current AGOA legislation is set to expire on September 30, 2025. While this date is fixed, the timeline for a decision on its renewal is less precise and depends heavily on the US legislative calendar and political priorities. Ideally, stakeholders hope for clarity well before the expiration date, likely requiring legislative action sometime the H1 2025, to allow businesses adequate time to plan and adjust. The coming months will be crucial for advocacy efforts and monitoring developments regarding the future of this pivotal trade program.