{"id":848908,"date":"2026-01-27T11:22:38","date_gmt":"2026-01-27T09:22:38","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=848908"},"modified":"2026-01-27T11:22:47","modified_gmt":"2026-01-27T09:22:47","slug":"the-disaster-that-could-break-south-africas-winning-streak","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/848908\/the-disaster-that-could-break-south-africas-winning-streak\/","title":{"rendered":"The disaster that could break South Africa’s winning streak"},"content":{"rendered":"\n

South Africa is enjoying a strong economic rally, with forecasters seeing the country’s growth prospects to be on an upward trajectory and the rand reaching its strongest levels in four years against the dollar.<\/p>\n\n\n\n

However, economic realities and very real risk factors cannot be ignored\u2014and the loss of access to the African Growth and Opportunity Act (AGOA) still looms.<\/p>\n\n\n\n

The United States House of Representatives last week voted in favour of the so-called AGOA Extension Act, which aims to extend the lapsed trade framework for three years, through December 2028.<\/p>\n\n\n\n

AGOA was established in 2001, giving eligible countries in Sub-Saharan Africa, including South Africa, beneficial access to US markets.<\/p>\n\n\n\n

South Africa has been the biggest beneficiary of the scheme, with around R300 billion in exports passing through it between 2019 and 2024 alone.<\/p>\n\n\n\n

Following a tumultuous year of trade and tariff wars pushed by the Trump Administration, AGOA lapsed in September 2025. There has since been bipartisan support for extending the agreement.<\/p>\n\n\n\n

While the passage of the extension appears to be a positive move and possible relief for South African industries using AGOA, several risk factors remain.<\/p>\n\n\n\n

Firstly, the extension of AGOA does not guarantee South Africa’s continued eligibility<\/strong><\/a> for the programme. Eligible countries are determined outside the Act itself. <\/p>\n\n\n\n

That is to say, while AGOA might be extended, South Africa’s participation might not be. And while the House has approved the extension, Senate approval and presidential signature are still pending.<\/p>\n\n\n\n

Secondly, South Africa’s trade relationship with the United States is severely strained, with deep divisions on political and ideological grounds between Pretoria and Washington.<\/p>\n\n\n\n

While the Department of Trade and Industry has talked up ongoing trade negotiations, the country remains subject to mounting trade tariffs.<\/p>\n\n\n\n

Most exports face a 30% ‘reciprocal’ tariff, while specific industry tariffs\u2014like auto makers\u2014have been hit with others (cumulative, not parallel).<\/p>\n\n\n\n

In addition, the Trump administration has not hesitated to weaponise tariffs to target countries on political grounds. <\/p>\n\n\n\n

Most recently, Washington has threatened more tariffs on countries with political ties to Iran and other US ‘enemies’\u2014South Africa being extremely friendly to all of them.<\/p>\n\n\n\n

Thirdly, there is a concerted push from US lawmakers to explicitly exclude South Africa from AGOA<\/strong><\/a>, and to “punish” it for moving against US interests. This includes fully reviewing all trade relations and potentially imposing sanctions against the government.<\/p>\n\n\n\n

South Africa will be damaged<\/h2>\n\n\n\n
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Bowmans partner, HB Senekal<\/figcaption><\/figure>\n\n\n\n

Some stakeholders have argued that the current tariffs on South African exports already negate the benefit of AGOA; thus, the impact of losing access to the programme is moot and overplayed.<\/p>\n\n\n\n

However, according to Bowmans partner, HB Senekal, uncertainty over AGOA is compounding the complexities and already stressful tariff environment for South Africa.<\/p>\n\n\n\n

He noted that industry groups in South Africa have emphasised the importance of AGOA-linked exports for employment, noting that hundreds of thousands of jobs are tied to US trade.<\/p>\n\n\n\n

This makes it something that cannot simply be ignored.<\/p>\n\n\n\n

He flagged three possible scenarios for 2026, including the threat of additional tariffs:<\/p>\n\n\n\n