AGOA Expires After 25 Years, Leaving African Exporters Exposed to new US Tariffs

The African Growth and Opportunity Act (AGOA), the trade framework that for 25 years granted duty-free access to the United States for dozens of sub-Saharan countries, expired on Tuesday, threatening to raise costs for African exporters and unsettle jobs and investment across the continent.

The lapse comes against the backdrop of new US tariffs that impose ad valorem duties on imports from many countries, stripping African exporters of the competitive edge they enjoyed under AGOA.

For most beneficiaries a baseline 10 percent surcharge is now in force, while others face much higher rates of 30 percent or more on key exports.

The combination of lost duty-free access and additional levies is expected to hit labour-intensive sectors such as textiles, apparel, agro-processing and light manufacturing — industries that have been major job creators in countries that used AGOA to build export supply chains.

Without AGOA, exporters must pay the United States’ Most-Favoured-Nation tariff schedules plus new reciprocal duties.

That means higher landed costs at US ports, making some African products uncompetitive.

Countries such as Kenya, Ethiopia and Egypt face a 10 percent tariff increase, while Mauritius, Botswana, Angola and South Africa confront surcharges of up to 40 percent in some product lines.

AGOA has long been credited with supporting hundreds of thousands of direct jobs linked to exports, with many more created indirectly in services and logistics.

The loss of preferential access threatens to erode those gains, especially in industries employing semi-skilled and female workers.

Companies that invested in factories and supply chains for the U.S. market now face a choice: absorb the higher tariffs, pass the costs on to buyers, shift production to other markets or shut down.

The ripple effects could strain local economies that rely on manufacturing jobs to drive household incomes and consumption.

African governments and business groups had lobbied Washington for a short-term extension, but political divisions and broader trade disputes complicated the talks.

The Trump administration has signalled willingness to consider a temporary renewal, though congressional approval is required.

In the meantime, exporters are expected to diversify into Europe, Asia, the Middle East and within Africa through the African Continental Free Trade Area.

But shifting to new markets will require time, certifications and logistics changes, leaving industries vulnerable to immediate disruption.

Trade analysts say the coming months will determine whether African exporters can absorb the shock or whether the end of AGOA marks a setback to two decades of industrialisation efforts tied to US demand.

gandae@businessdayafrica.org