A new trade dawn: what comes next as Africa navigates a post-AGOA world

By: Chidozie Nwali

The clock on the wall of the African Union headquarters is ticking toward a critical deadline. On September 30, 2025, the African Growth and Opportunity Act (AGOA), the U.S. trade pact that has served as the cornerstone of America’s commercial relationship with the continent for a quarter-century, is set to expire. The prospect of its lapse has created an atmosphere of trade uncertainties across Africa, with many trade relationships filled with “what’s next?”

For years, AGOA has provided a vital, duty-free bridge to the world’s largest consumer market. But as the program’s future hangs in the balance, African leaders and businesses are not simply waiting. They are pushing for a new model of partnership—one that is more equitable, more predictable, and anchored in the continent’s own emerging vision for economic integration.

The African Growth and Opportunity Act (AGOA) was not just a trade policy; it was a cornerstone of U.S. foreign policy with Africa. Signed into law on May 18, 2000, its primary purpose was to foster economic development, democratic governance, and stronger trade relations. As a non-reciprocal program, AGOA offered eligible countries preferential, duty-free access to the U.S. market for over 7,000 products, including high-value goods like apparel and textiles.

Over its lifespan, AGOA has had a mixed, yet significant, impact. While U.S. imports from AGOA-eligible countries rose from $8.15 billion in 2001 to $29.1 billion in 2024, this growth was often volatile and highly concentrated. In its early years, the trade was heavily dominated by crude oil supplies from Nigeria and Algeria. However, the program successfully spurred the growth of a viable clothing industry, which created thousands of jobs and became a model for what was possible.

Estimate U.S imports over the years under AGOA in Billion $

The U.S. Tariffs caused disruption

As the AGOA expiration date looms, the policy of duty-free access has been complicated by new U.S. tariffs that have already gone into effect. These measures, part of a broader shift in U.S. trade policy, have replaced the preferential treatment previously enjoyed by African exporters. The new “reciprocal tariffs” range from a baseline of 10% to significantly higher levels for specific countries.

• South Africa’s Plight: South Africa now faces a 30% tariff on most of its exports to the U.S. This is a direct hit to its high-value industries like automobiles and wine.

• Lesotho’s Plight: Nations that have built their economies around the textile industry, such as Lesotho, faced an initial threat of tariffs as high as 50%, which would have devastated the sector. While the final rate was lowered to 15%, it still represents a significant new cost that could force some businesses out of the market.

Other African economies were all hit with the baseline  10% tariffs, causing a disruption in the duty free trade relationship they once enjoyed.

A direct hit to livelihoods

The South African automotive sector has been hit particularly hard. The National Association of Automobile Manufacturers (NAAMSA) has been outspoken in its criticism, with its CEO, Mikel Mabasa, warning that the tariffs represent “not just a trade issue—it’s a socio-economic crisis in the making.”

In Kenya, manufacturers are engaged in a last-ditch effort to lobby the U.S. Congress for a temporary extension. A representative from the Lesotho industry noted that even a 15% tariff is a significant disadvantage when competing with countries that have a lower tariff.

AfCFTA the African trade strategy

The most significant response to this new era is the African Continental Free Trade Area (AfCFTA). By creating a single, continental market of 1.4 billion people, it provides a unified platform for trade and a single voice for negotiation.

The AfCFTA’s strategic role is twofold: to act as a catalyst for intra-African trade and to serve as a collective bargaining tool, transforming Africa’s position from that of a recipient of trade preferences to that of a formidable negotiating bloc.

Why AGOA’s Promise Went Unfulfilled for Many

While AGOA created success stories, its overall impact was limited by a set of persistent challenges on the African side. These “supply-side” constraints meant that even with open market access, many countries were unable to take full advantage.

• Inadequate infrastructure, from dilapidated roads to inefficient ports and unreliable power grids, significantly increased the cost of doing business. An African Development Bank estimate shows the continent faces an annual infrastructure funding gap of over $100 billion, a major barrier to global competitiveness.

• Navigating complex trade regulations has been a major hurdle, especially for small and medium-sized enterprises (SMEs). For example, almost half of South Africa’s clothing exports to the U.S. do not use AGOA preferences because producers find it more cost-efficient to import Asian textiles and pay the standard tariffs than to comply with the stringent rules.

• AGOA’s eligibility criteria, which have led to countries like Ethiopia and Uganda being removed from the program, have introduced a significant element of risk. The threat of a country being delisted means that a multi-million-dollar investment could become non-viable overnight, deterring long-term commitment.

A deeper look at AGOA’s impact

• The clothing and textile sector has been a clear success story. In Kenya, the industry directly employs over 66,000 workers, with an estimated 660,000 Kenyans indirectly reliant on the sector.

Before its suspension, Ethiopia’s apparel industry had created over 90,000 direct jobs in less than a decade.

• South Africa has been the top non-energy exporter under AGOA, with motor vehicles valued at $2.4 billion in 2024. In Lesotho, businesses like Nien Hsing International have become major exporters of clothing, relying on AGOA’s benefits to compete globally.

China and the European Union

With the U.S. shifting away from AGOA’s model, China and the EU are poised to consolidate their influence on the continent. China, now Africa’s largest bilateral trading partner, has a trade relationship defined by massive infrastructure and resource extraction, with trade flows reaching a record high of $282 billion in 2023.

The European Union, by contrast, operates under a system of Economic Partnership Agreements (EPAs), which are reciprocal and designed to promote regional integration, albeit with their own set of controversies.

The potential end of AGOA marks far more than the expiration of a trade preference program; it signals the end of an era. For a quarter-century, AGOA defined the U.S.-Africa trade relationship through a model of unilateral benevolence.

This is Africa’s moment to turn a trade crisis into a strategic opportunity. By leveraging the power of its own unified market, the continent is ready to forge new, more resilient partnerships and to write the next chapter of its economic story, not as a beneficiary, but as a global leader.