{"id":881977,"date":"2026-10-29T12:29:53","date_gmt":"2026-10-29T10:29:53","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=881977"},"modified":"2026-10-29T12:29:57","modified_gmt":"2026-10-29T10:29:57","slug":"countdown-to-disaster-for-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/881977\/countdown-to-disaster-for-south-africa\/","title":{"rendered":"Countdown to disaster for South Africa"},"content":{"rendered":"\n

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.<\/p>\n\n\n\n

Business groups and unions have been warning for months that a critical deadline is looming for South Africa’s participation in the programme.<\/p>\n\n\n\n

Under AGOA, participating countries get duty-free access to the United States market in a variety of categories.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

The programme was enacted by the United States in 2000, granting many African countries, including South Africa, duty-free access to the US market.<\/p>\n\n\n\n

Over this time, South Africa accounted for 54% of all AGOA-related exports to the US, making it the scheme\u2019s largest beneficiary over its lifetime.<\/p>\n\n\n\n

Approximately 22% of South African exports to the US benefit from AGOA, resulting in billions of dollars in trade.<\/p>\n\n\n\n

Between 2019 and 2024 alone, South Africa exported around R300 billion worth of goods under the programme.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

According to trade union Solidarity, this process could be completed as early as the start of November, with South Africa likely to be excluded.<\/p>\n\n\n\n

President Cyril Ramaphosa himself recently warned the nation to \u2018prepare for the worst\u2019 regarding bilateral trade ties with the United States.<\/p>\n\n\n\n

Aluma Capital Chief Economist Frederick Mitchell said that the AGOA expulsion is an acute risk for South Africa, given the country’s geopolitical positioning.<\/p>\n\n\n\n

“Tensions between Pretoria and Washington have escalated to a frosty impasse, placing South Africa\u2019s duty-free access under AGOA in grave jeopardy,” he said.<\/p>\n\n\n\n

The economist said that the stakes could not be higher. <\/p>\n\n\n\n

“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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

“Losing this preferential access would decimate industrial hubs that have taken three decades to build,” Mitchell said.<\/p>\n\n\n\n

Disaster, but not a catastrophe?<\/h2>\n\n\n\n
\"\"<\/a>
Wandile Sihlobo<\/figcaption><\/figure>\n\n\n\n

Mitchell, and many other analysts and business experts, have stressed that the loss of AGOA isn’t something to be ignored or downplayed.<\/p>\n\n\n\n

However, others believe that losing the programme won’t be as catastrophic as has been presented.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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. <\/p>\n\n\n\n

Losing access to AGOA would result in South Africa facing an additional Most Favoured Nation tariff of around 3.4%, he said.<\/p>\n\n\n\n

“Without AGOA, these tariffs would rise to 15.9%, slightly reducing the competitiveness of South African agricultural products in the US market,” Sihlobo said.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

South Africa\u2019s agricultural exports to the US in 2025 totalled $504 million, down 3% from the previous year.<\/p>\n\n\n\n

“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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Should the tariffs be withdrawn in the future, the loss of AGOA could put South Africa at a more acute competitive disadvantage.<\/p>\n\n\n\n

Sihlobo said that the loss of AGOA is not yet guaranteed and that South Africa would continue to support efforts to retain access.<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa could be just a week away from being expelled from AGOA, with economists warning that the impact would be disastrous for the country.<\/p>\n","protected":false},"author":10,"featured_media":876872,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2115754276844720561","_sma_facebook_post_id":"191437357620492_2253329012154164","_sma_instagram_post_id":"17984841296901403","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[18336,21743,1293,22000,10022,21374],"class_list":["post-881977","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-agoa","tag-aluma-capital","tag-cyril-ramaphosa","tag-frederick-mitchell","tag-united-states","tag-wandile-sihlobo"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/881977","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=881977"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/881977\/revisions"}],"predecessor-version":[{"id":881982,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/881977\/revisions\/881982"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/876872"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=881977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=881977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=881977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}