The African Growth and Opportunity Act (AGOA) is a US trade preference program launched in May 2000 to support sub-Saharan African economies. It provides duty-free access to the US market for over 1,800 products from eligible African countries. Currently, 32 countries benefit from AGOA, with 21 “lesser developed countries” also receiving special preferential treatment for textiles and apparel.
In 2023, US imports under AGOA totaled nearly $10 billion. While this accounted for a small share of overall US merchandise imports, it represented a significant portion of exports from certain African countries, such as Lesotho and Madagascar. The program has boosted the competitiveness of African exporters, especially in apparel, and has facilitated US foreign direct investment in the region, contributing to more resilient supply chains. However, utilization of AGOA preferences varies widely across countries and product categories, with many economies struggling to diversify exports beyond primary commodities.
US consumers and firms have also benefited from AGOA. Access to fuels, metals, and apparel at preferential rates has provided more choices and lower prices, enhancing competitiveness in downstream industries. The program has therefore supported both African exporters and US businesses while fostering long-term trade relations.
AGOA is set to expire at the end of September 2025, and rising US tariffs implemented earlier this year are already increasing duties on a wide range of products. Without renewal, African exporters would lose preferential treatment, facing higher tariffs on top of most-favored-nation rates. This could significantly disrupt trade, particularly in sectors such as textiles and apparel. For instance, Kenya’s trade-weighted average US tariff could jump from 10% to 28%, and Madagascar’s could rise to 23%.
The expiration of AGOA could undermine Africa’s export competitiveness in the US at a time when global competition is intensifying. While the African Continental Free Trade Area could help offset some losses, transitioning to alternative markets would be complex and time-consuming, highlighting the critical importance of AGOA for maintaining African access to the US market.
Related Posts
