Countdown to disaster for South Africa
South Africa could be just a week away from being expelled from the African Growth and Opportunity Act (AGOA), with economists warning that the impact would be disastrous for the country.
Business groups and unions have been warning for months that a critical deadline is looming for South Africa’s participation in the programme.
Under AGOA, participating countries get duty-free access to the United States market in a variety of categories.
South Africa has been the greatest beneficiary of the programme since its inception, with the Act supporting hundreds of billions of rands in trade and hundreds of thousands of jobs.
The programme was enacted by the United States in 2000, granting many African countries, including South Africa, duty-free access to the US market.
Over this time, South Africa accounted for 54% of all AGOA-related exports to the US, making it the scheme’s largest beneficiary over its lifetime.
Approximately 22% of South African exports to the US benefit from AGOA, resulting in billions of dollars in trade.
Between 2019 and 2024 alone, South Africa exported around R300 billion worth of goods under the programme.
The programme expired in September 2025, was retroactively extended to December 2026 back in February, and finally extended to the end of 2028 last month.
While the extension came as a relief for participating countries, including South Africa, the review process for which nations are eligible for the programme was still to be completed.
According to trade union Solidarity, this process could be completed as early as the start of November, with South Africa likely to be excluded.
President Cyril Ramaphosa himself recently warned the nation to ‘prepare for the worst’ regarding bilateral trade ties with the United States.
Aluma Capital Chief Economist Frederick Mitchell said that the AGOA expulsion is an acute risk for South Africa, given the country’s geopolitical positioning.
“Tensions between Pretoria and Washington have escalated to a frosty impasse, placing South Africa’s duty-free access under AGOA in grave jeopardy,” he said.
The economist said that the stakes could not be higher.
“Economic modelling suggests that a failure to renew AGOA or an outright expulsion of South Africa would put between 125,000 and 576,000 direct and indirect jobs at risk,” he said.
Critical export engines, most notably automotive manufacturing in the Eastern Cape, citrus and deciduous fruit farming in the Western Cape, and advanced metallurgy, depend critically on duty-free entry into the US market, he added.
“Losing this preferential access would decimate industrial hubs that have taken three decades to build,” Mitchell said.
Disaster, but not a catastrophe?
Mitchell, and many other analysts and business experts, have stressed that the loss of AGOA isn’t something to be ignored or downplayed.
However, others believe that losing the programme won’t be as catastrophic as has been presented.
According to Agbiz Chief Economist and Presidential Envoy on Agriculture, Wandile Sihlobo, the loss of AGOA would have to be contextualised around other tariffs in effect against South African exports.
Sihlobo noted that some South African products currently enter the market at 12.5% tariffs, following the Section 301 action from Washington earlier this year.
Losing access to AGOA would result in South Africa facing an additional Most Favoured Nation tariff of around 3.4%, he said.
“Without AGOA, these tariffs would rise to 15.9%, slightly reducing the competitiveness of South African agricultural products in the US market,” Sihlobo said.
While this is not ideal, even a 15.9% tariff is still lower than the 30%-plus tariffs South Africa faced with the “liberation day” tariffs of 2025, when the country still managed to compete.
South Africa’s agricultural exports to the US in 2025 totalled $504 million, down 3% from the previous year.
“One could argue that, while this would be a challenging path, it would not necessarily be as catastrophic as we have faced in the past,” Sihlobo said.
It should be noted that AGOA is intended to be a long-term programme, whereas the current tariff regime implemented by Washington can change from one administration to the next.
Should the tariffs be withdrawn in the future, the loss of AGOA could put South Africa at a more acute competitive disadvantage.
Sihlobo said that the loss of AGOA is not yet guaranteed and that South Africa would continue to support efforts to retain access.
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