Africa sits at the nexus of current development, climate, and security challenges. With global competition over resources, technology and influence growing, the strategic importance of establishing a new kind of relationship with Africa has become clear to the United States. With an African market of over 1.3 billion people and a combined Gross Domestic Product (GDP) of over $3.4 trillion, expanding US-Africa trade and investment is now a clear strategic priority for both the United States and African countries.
While US imports from Africa were substantially higher than Chinese imports in 2001, over the last twenty years the relationship has switched. Chinese imports have been higher than US imports since 2011. In 2022, Chinese imports from Africa were close to three times higher than US imports from the continent, dominated by imports of petroleum and mining products.
For sub-Saharan Africa, the United States was the destination for 21 percent of exports in 2000, but by 2020 this had dropped to about 5 percent, with the United States now below China, India, and South Africa as the top export destination. The trade agreement between the United States and sub-Saharan African nations, known as AGOA (African Growth and Opportunity Act), offers duty-free access to the US market for certain products from eligible sub-Saharan African countries, to encourage economic growth and foster US-Africa relations.
However, current and future US policy trends could affect AGOA’s trajectory, potentially damaging African economies.At its inception, 90% of U.S. imports from Africa were oil. Today, oil is down to about 20% of the U.S.–Africa trade relationship. Under AGOA, African countries now export over $6 billion annually in autos, apparel, food, and specialty goods.
What is AGOA?
AGOA (P.L. 106-200, as amended) created a nonreciprocal U.S. trade preference programme, also referred to as AGOA, to provide duty-free access to the U.S. market for most exports from eligible countries in sub-Saharan Africa (SSA). The act also requires an annual gathering, known as the AGOA Forum, held between U.S. and AGOA country officials to discuss trade-related issues and AGOA implementation. Additionally, AGOA provides direction to selected U.S. government agencies regarding their trade and investment support activities in the region.
AGOA has been a cornerstone of U.S. trade policy toward SSA since 2000. According to officials, through AGOA, Congress seeks to increase U.S. trade and investment ties with the region, promote economic growth through trade, and encourage the rule of law and market-oriented reforms. Congress may extend authorization for the program, which is scheduled to expire in September 2025, and modify the programme to promote other congressional priorities in the region, such as strengthening U.S. trade and investment ties with SSA and increasing regional participation in global value chains.
In the last Congress, U.S. Senators James Risch (R-ID) and Chris Coons (D-DE) introduced the AGOA Renewal and Improvement Act of 2024. The new act proposed an extension of AGOA by 16 years, until 2041. Likewise, in December 2024, Representative John James (R-MI) introduced the AGOA Extension and Enhancement Act of 2024, which proposed an extension of the programme by 12 years, until 2037. Except for the difference in the lengths of extension, both bills were closely aligned in laying important groundwork for a more effective agreement that reflects today’s trade realities. However, both failed to pass, leaving the future of AGOA uncertain.
The benefits of AGOA have not been evenly distributed across sub-Saharan Africa. Even though some countries have been more successful in leveraging the programme, others have faced significant hurdles, for example South Africa. In other countries, political instability such as in Ethiopia and economic deficiencies weakened AGOA participation. Unconstitutional changes in government through military coups, as witnessed in Guinea and Mali, have led to suspension from AGOA. Gross human rights violations as seen in the Tigray conflict in Ethiopia were cited as grounds for removal by the U.S.
In addition, the lack of sufficient implementation of economic reforms, diversification, and integration into global value chains limited the impact of AGOA in a number of countries. As a result of this deficiency, Cameroon, Mauritania, Burundi, Equatorial Guinea, and Eritrea struggled to leverage AGOA therefore undermining their ability to maintain eligibility and fully capitalize on trade preferences.
Circle of Change: US Tariffs and the African Growth Prospects
AGOA is credited with supporting hundreds of thousands of jobs in more than 30 eligible countries. Its impact has been diluted by the bilateral tariffs Trump introduced in August, which exposed products once exported duty-free under AGOA to U.S. import taxes of between 10% and 30%. But there are some signs AGOA will be renewed, with a White House official telling Reuters the Trump administration supports a one-year extension of the pact.
This sudden jump in tariffs could disrupt long-standing trade relations and severely disadvantage African exporters, particularly in highly protected sectors like textiles and apparel, where AGOA has so far provided critical market access. For example, Kenya would see its trade-weighted average US tariff nearly triple, jumping from 10% to 28%. For Madagascar, it would double to 23%.
A key example of the deal’s impact can be found in Kenya, where it has allowed the country’s textile and apparel sector — makers of jeans, for instance — to effectively compete with Asian exporters such as in Bangladesh and Vietnam. In 2024 alone, the country exported $470m (£350m) worth of clothing to the US, supporting more than 66,000 direct jobs, three-quarters of them done by women, according to the Kenya Private Sector Alliance, an umbrella group of private businesses. Factories like Shona EPZ have become important sources of employment, especially for young people who have struggled to find stable work in a tough economy.
Moreover, AGOA has proved very valuable for countries such as Kenya and Lesotho and the fate of thousands of workers, like 29-year-old Joan Wambui, is tied up with its future. The end of the deal could spell the end of her job, analyst says. Ms Wambui has worked at Shona EPZ, helping to sew sportswear exclusively for the American market, for just six months. In that short time, her salary has become the mainstay of her household. She supports her four-year-old daughter, two sisters in college, along with her mother. Losing her job, she says, would affect more than just her own life. “If AGO expires, where shall we go?” Ms Wambui asks in a worried tone, her hands and feet moving in time on the sewing machine as she stitches together pieces of fabric.
For her, a regular wage has meant more than income. It has meant dignity and the ability to pay school fees, keep food on the table and enabled her to look forward to a better future. “It’s going to hit me hard. Starting to look for a new job. In Kenya it’s hard to find a job, very hard,” she says as she folds the piece of fabric she has just stitched. “Most of the people here were taken from the streets,” Ms Wambui says. “They were drug addicts. If it expires, they might go back there, and here they are reformed.”
Kenya is already paying 10% on non-AGOA exports, which are not many. Kenyan manufacturers will struggle to compete with rivals in Asia, even though some Asian countries may face a higher U.S. tariff, because of the limited domestic supply chain in Kenya where most of the raw materials are imported, as well as higher energy costs, lending rates, and operating expenses.
The Future Outlook
Observers say the next ten years will shape economic trajectories for decades to come, the US must build on its narrative investment by embedding greater certainty for US and African investors. But what could become a crisis is an opportunity for United States rival China, which has long courted African countries and is now offering them a lifeline.
“We (Africa) are going straight into the hands of China,” Nigerian economist Bismarck Rewane told CNN. “That is the unfortunate outcome,” Rewane said of Africa’s expected further shift toward China, which has emerged in recent years as the continent’s largest bilateral trading partner.
Rewane believes that the US tariffs could inspire Africa “to build economic resilience and be less dependent on lopsided trade.” Above all, he added, the continent must be “more inward-looking rather than outward-dependent.”
Accelerating the implementation of the African Continental Free Trade Area (AfCFTA) could help mitigate this situation, but such a readjustment would be challenging and require considerable time. Four years into implementing the AfCFTA, the world’s largest free trade area by population, the continent’s 1.5 billion consumers and $3 trillion in aggregate GDP remain fractured into isolated mini-markets.