{"id":838196,"date":"2025-09-23T10:00:14","date_gmt":"2025-09-23T08:00:14","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=838196"},"modified":"2025-09-23T10:00:20","modified_gmt":"2025-09-23T08:00:20","slug":"one-week-to-another-disaster-for-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/838196\/one-week-to-another-disaster-for-south-africa\/","title":{"rendered":"One week to another disaster for South Africa"},"content":{"rendered":"\n

South African officials and business executives are fretting over the impending expiry of a crucial, duty-free trade programme with the United States, without any word from Washington on whether it will be extended or not.<\/p>\n\n\n\n

The African Growth and Opportunity Act, or AGOA, is set to expire at the end of September\u2014just one week away.<\/p>\n\n\n\n

AGOA has been the centrepiece of US economic engagement with\u00a0Africa\u00a0since it was enacted in 2000, seeking to foster investments, job creation and economic growth through provision of access to the vast US consumer market.<\/p>\n\n\n\n

AGOA is a preferential trade deal, offering duty-free, quota-free access for thousands of products to the eligible 32\u00a0African nations, including South Africa.<\/p>\n\n\n\n

In return, beneficiary nations are expected to adhere to certain eligibility requirements around maintaining market-based economies and good governance. <\/p>\n\n\n\n

States are also expected to eliminate barriers to US investments and trade.<\/p>\n\n\n\n

Washington has been carrying out regular reviews on compliance. Countries kicked out of the deal in recent years for non-compliance include Ethiopia, Mali and Uganda.<\/p>\n\n\n\n

The deal was extended for a decade in 2015. However, a bipartisan effort to secure a further extension last year did not get a vote in Congress. <\/p>\n\n\n\n

January’s return of President Donald Trump to the White House has further cast doubt on an extension, due to his tariff-driven trade stance.<\/p>\n\n\n\n

South Africa’s placement in the programme has long been in question\u2014even under the previous administraton\u2014with the country’s economic heft standing out among its African peers. <\/p>\n\n\n\n

More recently, South Africa’s political and foreign relations have made its presence in the Act even more questionable, with some lawmakers explicity calling for the country’s expulsion.<\/p>\n\n\n\n

South Africa is seen as being aligned with America’s enemies\u2014Russia, China and Iran\u2014and actively working against US interests.<\/p>\n\n\n\n

South Africa has a lot to lose<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

AGOA is credited with helping\u00a0African nations increase US exports, attracting investments and jobs.<\/p>\n\n\n\n

The value of US imports from AGOA beneficiaries rose 37% in the period from 2001 to end-2021, a UN trade agency study showed. <\/p>\n\n\n\n

The imports more than doubled when stripping out fluctuating US demand for Angolan and Nigerian petroleum products.<\/p>\n\n\n\n

South\u00a0Africa, the continent’s most industrialised economy, enjoyed the lion’s share of the benefit. <\/p>\n\n\n\n

South Africa exported an estimated R71.5 billion through AGOA in 2024, accounting for 46% of total exports to the US that year.<\/p>\n\n\n\n

South Africa\u2019s exports under AGOA have also been increasing over the years. In 2019, around R31 billion was traded under the Act. This shot up to R54 billion in 2022 and hit R64 billion in 2023.<\/p>\n\n\n\n

The R71.5 billion estimate in 2024 is the highest yet, with the total over the period coming to just under R300 billion.<\/p>\n\n\n\n

Average annual US imports of $37.7 billion from AGOA nations in 2001-2021 amounted to around five times annual average US aid extended to the countries of $7.6 billion, the UN found.<\/p>\n\n\n\n

The deal also boosted economic growth, the office of the United States Trade Representative says, and helped foster economic and governance reforms.<\/p>\n\n\n\n

The trade agreement has also provided a key source of hard currency for many economies on the continent that struggle with shortages of dollars for their international obligations.<\/p>\n\n\n\n

However, the US government has not yet commented on the reauthorisation of AGOA. <\/p>\n\n\n\n

Many economists have argued that the Trump tariffs, which have been in effect since April and escalated in August, already supersede the programme, making its extension moot.<\/p>\n\n\n\n

However, the Trump tariffs are not sacrosanct, with lawmakers challenging their legality in the US, which could have implications down the line. <\/p>\n\n\n\n

They are also not seen as ‘forever tariffs’, underlining the importance of longer-term trade deals and programmes like AGOA.<\/p>\n\n\n\n

More than money at stake<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

US Trade Representative Jamieson Greer has publicly said in the past that an extension was not a priority for the current administration, which is focusing on bilateral discussions and trade deals with individual nations.<\/p>\n\n\n\n

On Africa’s side, the nature of AGOA as a regional preferential trade programme with eligibility criteria at Washington’s discretion means countries have not been able to put up a united negotiating front.<\/p>\n\n\n\n

Kenya, which started trade talks with Washington in 2020, is looking to strike a deal by year-end to safeguard a market that accounts for 10% of annual exports.<\/p>\n\n\n\n

South\u00a0Africa, whose goods face 30% tariffs in the US compared with Kenya’s 10%, is also racing to clinch a deal with one of its key export markets.<\/p>\n\n\n\n

The loss of unlimited, duty-free access to the US market for thousands of products made in\u00a0Africa, already hampered by imposition of tariffs, would cut exports, curb investments and threaten jobs.<\/p>\n\n\n\n

Africa’s annual exports to the US could reduce by about a quarter, representing a 1% reduction in total exports to the world, preliminary research by London-based\u00a0Africa\u00a0consultancy Development Reimagined shows.<\/p>\n\n\n\n

The African Development Bank has already cut its Africa growth forecast, citing trade and tariff turmoil.<\/p>\n\n\n\n

In Kenya, the sudden end of the deal would endanger 300,000 direct and indirect jobs in the textiles and apparel sector, said Trade Minister Lee Kinyanjui.<\/p>\n\n\n\n

Analysts estimate tens of thousands of jobs would also be lost in South Africa, where the economy is barely growing and unemployment is stuck above 30%.<\/p>\n\n\n\n

The looming expiry also creates uncertainty for US companies and its termination would harm Washington’s geopolitical interests, said the US Chamber of Commerce in a letter to congressional leaders, urging its swift reauthorisation.<\/p>\n\n\n\n

With Reuters<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

South African officials and business executives are fretting over the impending end of AGOA, which expires at the end of the month, with no word from Washington.<\/p>\n","protected":false},"author":10,"featured_media":835405,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[18336],"class_list":["post-838196","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-agoa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838196","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=838196"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838196\/revisions"}],"predecessor-version":[{"id":838197,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838196\/revisions\/838197"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/835405"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=838196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=838196"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=838196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}