End of a 25-year-old lifeline for South Africa
The African Growth and Opportunity Act (AGOA) officially expired last week, ending a 25-year-old trade lifeline to South Africa and several key industries.
The Act, which was enacted in May 2000, enabled approximately 17% of South African exports to the US to enter duty-free.
Over the quarter-century, the Act has been critically important for South Africa’s vehicle manufacturing industry, in particular, with agriculture, apparel, chemicals and equipment also benefiting.
According to data from Aluma Capital, South Africa’s benefits from AGOA have just grown over the years.
South Africa exported an estimated R71.5 billion through AGOA in 2024, accounting for 46% of total exports to the US that year.
In 2019, around R31 billion was traded under the Act. This shot up to R54 billion in 2022 and hit R64 billion in 2023.
The R71.5 billion estimate in 2024 is the highest yet, with the total over the period coming to just under R300 billion.
During its 25-year run, South Africa accounted for 54% of all AGOA-related exports to the US, making it the scheme’s largest beneficiary over its lifetime.
As the Act allowed these industries to thrive, it also created thousands of new jobs and business opportunities—all of which are now at risk, unless South Africa can pivot to new markets, fast.
Economists have argued that the imposition of the so-called Trump tariffs in 2025 has made AGOA moot by superseding the benefits with the export taxes, but this doesn’t tell the full story.
For one thing, the Trump tariffs are not necessarily a permanent fixture, being negotiated downward in many cases, and even being challenged in the US courts.
AGOA, meanwhile, was a long-term and long-standing trade agreement that, if extended, would have opened up the US markets beyond the current administration.
Notably, the Trump administration has reportedly expressed willingness to extend AGOA by another year; however, this is currently off the table with the US government currently shut down.
According to Business Leadership South Africa (BLSA) chief executive, Busi Mavuso, there are also no guarantees that South Africa would be part of these plans, with its participation in AGOA contested.
Mavuso said that South Africa’s foreign policy positions and proximity to the United States’ enemies (ie, China and Russia) have dented any goodwill between the two countries.
Lose-lose for all involved
However, Mavuso said that, by allowing AGOA to lapse and by icing out South Africa, the United States risks sending Africa—and its wealth of resources—into the hands of said enemies.
She said that the US government should carefully consider what serves its best interests in this regard, as jobs in both countries depend on the programme.
“There are many US companies – particularly those integrated into supply chains with South African manufacturers – who will be harmed by AGOA’s expiry as well,” she said.
Ultimately, however, South Africa should face reality and start making other plans.
“While trade negotiations with the US are ongoing, and AGOA renewal should remain an objective, we must confront the reality that AGOA may be permanently consigned to history,” she said.
“South Africa must pivot to focus on delivering results in its strategic relationships with the wider world.”
Mavuso said that China is moving in precisely the opposite direction to the US, having announced duty-free access for all African nations with which it maintains diplomatic ties.
“This represents a fundamental realignment of trade patterns that could reshape Africa’s global orientation for decades to come,” she added.
BRICS also promises several trade opportunities, as does the African Continental Free Trade Agreement—though the latter faces significant implementation challenges around infrastructure and regulatory harmonisation.
In addition to looking for other markets to replace the loss of AGOA, the business lead said that South Africa should also focus on things well within its own control, like government reforms.
“The steady improvements we have achieved in logistics — from port efficiency to freight rail performance — must be dramatically accelerated. This is the most obvious pathway to increasing our international competitiveness, and it is entirely within our power to deliver,” Mavuso said.
“The end of AGOA is undoubtedly a setback, but we remain the architects of our future.”
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