Editorial: AGOA…what next?

The U.S. trade initiative, the African Growth and Opportunity Act (AGOA) launched in 2000, is set to expire on September 30, 2025.

AGOA has been a cornerstone of U.S.-Africa economic relations, offering duty-free access to U.S. markets for a wide range of goods as a means to encourage trade and investment across the African continent.

It has facilitated economic growth in numerous African nations by increasing exports, particularly in sectors such as textiles, agriculture and manufacturing.

Indeed, with its expiration date rapidly approaching and no immediate renewal in sight, concerns are mounting about the potential economic fallout for African economies that have come to rely on AGOA benefits.

However, the expiration of AGOA need not necessarily spell catastrophe for Africa as it could inspire African nations to reduce dependency on external trade incentives and catalyse a new era of intra-African trade and self-reliant economic empowerment which is badly needed now.

According to the United Nations Conference on Trade and Development (UNCTAD), intra-African trade accounts for only 16% of the continent’s total trade compared to 68% in Europe and 59% in Asia (UNCTAD, 2022).

The cancellation of AGOA could force African nations to rethink their trade and industrial policies, shifting focus inward to foster regional trade, strengthen domestic industries and create value-added goods for global markets.

If African countries scale up their production capabilities, partnerships with the African diaspora could help bridge financial, technical and market access gaps.

One of the most promising opportunities potentially arising from cancellation of the African Growth and Opportunity Act (AGOA) is acceleration of the African Continental Free Trade Area (AfCFTA).

AfCFTA is poised to become the world’s largest free trade area, encompassing over 1.3 billion people and a combined GDP of US$3.4trillion. AfCFTA aims to reduce intra-African tariffs, harmonise regulations and promote regional trade, which remains underexploited compared to trade with external partners.

Conversely, losing preferential access to U.S. markets provided by AGOA could spur African countries to prioritise internal trade reforms and regional collaboration under the AfCFTA framework. It could incentivise governments to align their trade policies and invest in infrastructure to support seamless cross-border trade.

AfCFTA has the potential to drive industrialisation, stimulate innovation and create millions of jobs across key sectors such as manufacturing, agriculture and services.

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