The United States&#8217; recent modifications to the African Growth and Opportunity Act (AGOA) signal a significant shift in its trade relations with Africa, intertwined with broader geopolitical implications and the emerging contest for influence on the continent. Experts weigh in.



The United States has acted on its commitment to adjust the African Growth and Opportunity Act (AGOA) due to governance and human rights concerns, resulting in the suspension of several countries and the reinstatement of Mauritania as a beneficiary after a 16-year absence. Uganda, the Central African Republic, Gabon, and Niger have all been expelled from AGOA, effective January 1, 2024, losing access to the preferential trade benefits offered by the Act.



“I am taking this step because I have determined that the Central African Republic, Gabon, Niger, and Uganda do not meet the eligibility requirements of section 104 of the AGOA,” stated US President Joe Biden in a letter to the Speaker of the House, marking a significant policy shift last year. Since its establishment in 2000, AGOA has been a critical element of US-Africa trade relations, enhancing market access for qualifying African countries and fostering substantial economic ties between the United States and sub-Saharan Africa. This trade program has not only facilitated African exports to the US but has also represented a deeper engagement between the two regions in both economic and political spheres.



Independent risk and political analyst Marisa Lourenço recognizes the multifaceted nature of these expulsions, reflecting the United States&#8217; application of soft power in Africa. “Politically, it is a way for the US to remain close to African governments, to sway key policy decisions, particularly around foreign policy objectives and investment opportunities for US firms,” says Lourenço to FORBES AFRICA. “This is done under the guise of promoting tenets of liberal Western democracy but really is about the balance of power on the continent between the US and other major powers, notably China.”



AGOA Changes: The Economic Implications 



The adjustments to AGOA’s membership carry significant economic implications for the affected countries, according to Dawie Roodt, economist and Executive Chairman of Efficient Impacts. Speaking with FORBES AFRICA, Roodt explains, &#8220;For countries like Uganda, the suspension from AGOA could mean a substantial blow to their economies, particularly in sectors that heavily relied on export to the US.&#8221; This move is seen as a notable rebuke by the United States.



However, Roodt contrasts this with the symbolic implications for other countries removed from the alliance, such as the Central African Republic and Gabon. “These countries do not have a significant export footprint in the US market, so the direct economic impact might be more symbolic than substantial.”



Mauritania’s return to AGOA could be economically significant, considering both its longstanding absence and its near monopolistic trade reliance on China, with almost half of the country’s exports being purchased by China. “Mauritania&#8217;s return to AGOA is likely to boost its exports to the US, particularly in sectors where it has competitive advantages,” says Roodt.



The economic implications are inextricably linked with political consequences and broader geopolitical shifts, as Africa becomes a renewed frontier. Economist Daniel Silke, Director of the Political Futures Consultancy, tells FORBES AFRICA, “We are witnessing a growing polarization in the global economic and political landscape, with countries increasingly having to navigate complex trade and diplomatic terrains.” Silke raises the question, supported by Roodt’s insights: “Can BRICS membership evolve to offer similar benefits to what AGOA offers, or will these countries find themselves caught between competing global powers?”



New Strategic Partnerships 



Lourenço, Silke, and Roodt agree that the AGOA realignment marks a new stage in a broader, longstanding competition between the United States and China over strategic infrastructure and resources—a new ‘Scramble for Africa.’ “We are witnessing a new era in Africa&#8217;s international relations, where US and Chinese spheres of influence are clearly demarcated,” Roodt observes, noting that the competition is about more than economic dominance; it also encompasses political ideology and strategic positioning.



Roodt adds, “The current geopolitical changes in Africa reflect a complex interplay of economic interests and political alliances. The reorientation of these African nations towards powers like China and Russia is a direct consequence of the changing US policy,” highlighting Africa&#8217;s strategic importance in the global arena and the dynamic nature of 21st-century international relations.



The future relationship between the United States, Africa, and China will largely depend on the response of African member states; engaging in preferential trade with the United States along a strict liberal ideological lens or with a less restrictive China.



The Future of AGOA and US-Africa Relations 



&#8220;The recent suspensions and reinstatements within AGOA may set a precedent for how the US approaches trade relations with African nations, potentially leading to more stringent criteria based on governance and human rights,&#8221; Silke asserts. He suggests that this could lead to further reevaluation of AGOA’s structure and objectives in the future. &#8220;This could result in a recalibration of diplomatic ties, with African nations weighing the benefits of AGOA against the need to maintain sovereignty over their domestic policies.&#8221;



Roodt cautions that the effects might not be immediately visible. “The realignment of trade and diplomatic relations is a complex and gradual process. While the impact of AGOA changes is significant, it will unfold over time.”



This shift reflects a world where power is increasingly distributed among various global players. The response of the affected African countries, pivoting towards nations like China and Russia, underlines the evolving landscape of international relations. These countries are diversifying their alliances, indicating a complex, interconnected global scenario. The growing influence of the BRICS nations in Africa, especially following these AGOA adjustments, signifies a shift towards a multipolar global structure.



Emerging global powers are playing a more pronounced role, and African nations are strategically positioning themselves in the international arena. The changes within AGOA represent a microcosm of larger shifts in global trade and diplomacy, with African countries increasingly asserting their agency. This new era is characterized by a dynamic interplay of economic, political, and strategic factors, where African nations are key players in shaping the future of international relations.



Reflecting on these developments, Silke offers a perspective that encapsulates this global shift: “The evolving dynamics within AGOA and the broader international landscape are reflective of a world where influence is no longer the preserve of traditional powers. African nations are now at the forefront, navigating a path through competing global interests, and in doing so, they are redefining the rules of international engagement.”

The African Growth and Opportunity Act Forum

AGOA Trade Program Adjustments: What They Could Mean For US-Africa Relations Amid Global Power Shifts

The recent AGOA summit in Johannesburg beckoned calls for its extension beyond September 2025. With a backdrop of the ongoing Israel-Hamas conflict and US-Africa relations at a delicate juncture, the summit explored the potential reshaping of trade norms, eyeing a more balanced economic relationship.



The annual African Growth and Opportunity Act (AGOA) summit was held in Johannesburg, South Africa last week, amidst landmark changes, with calls for its renewal beyond the current expiry in September 2025. It was also announced that four African countries would be removed from the act.



AGOA, which allows African member states preferential access to United States (US) markets, has long been an economic boon to the continent, but the current summit took place against a backdrop of tension due to recent diplomatic spats between the US and South Africa, as well as the ongoing Israel-Hamas conflict.



AGOA, first established by the US Congress in 2000, provides duty-free exports to the US for many goods from member countries. As of last year, exports to the US under the act were valued at $16.5 billion, with South Africa taking the lion&#8217;s share. With the current iteration of the act set to expire in 2025, South African President Cyril Ramaphosa made clear his desire to see the trade deal renewed.



“We would like you to consider the extension and renewal of AGOA for a sufficiently lengthy period,” said Ramaphosa on the last day of the summit.



His proposal of a renewal was matched by a statement issued by US lawmakers released on Friday, with House Foreign Affairs Committee chairman Michael McCaul stating, “Africa is on the precipice of an unprecedented demographic boom. The timely reauthorization of AGOA is important to provide business certainty and show the United States’ continued support towards Africa’s economic growth.”



However, Ramaphosa was also at pains to shift the balance of focus of the act moving forward, with historical trade, which often involves exporting raw materials to the US and importing manufactured goods into Africa – a relationship he would like to shift, highlighting the automotive sector in South Africa as one of note. “As we can already see, they have great use on the continent to produce the finished complete products such as vehicles and a whole number of others…”



Other notable changes of this year&#8217;s summit are the inclusion of labor union and civil society members, with representatives from some of South Africa’s largest trade unions being present.



“A renewed AGOA needs to include provisions to support compliance with good labor practices and penalize employers who flout labor laws,” said the Congress of South African Trade Unions (COSATU) in a statement on Friday. “[We are] heartened by the positive support we have received from the US labor movement which has a long history of solidarity with South African working-class struggles.”



The calls for renewal come amidst recent tensions between both South Africa and the US, as well as other African countries. AGOA membership, vetted by the US President, saw President Joe Biden announce that four countries would be removed from the act due to “non-compliance with AGOA eligibility criteria”; the Central African Republic (CAR), Uganda, Gabon, and Niger.



Over the last year, US-South Africa diplomatic relations were also strained by the secretive reported docking of the Russian vessel Lady R in December 2022, as well as more recent comments last month expressing solidarity with Palestine following Israel&#8217;s retaliation for the Hamas attacks on October 7. However, both of these challenges appeared to have been smoothed over diplomatically, with both countries on track for a renewal of the AGOA pact.



“When we say that AGOA is the cornerstone of our economic partnership we do not mean that in the abstract,” said United States Trade Envoy Katherine Tai in her closing remarks of the summit. “It has been a bedrock for improving the livelihoods of so many people across Africa… and it has the potential to do so much more.”

Beyond 2025: The AGOA Summit’s Bid For Extended Economic Ties On The Continent

South Africa remains resolute in hosting the AGOA summit despite prior tensions with the US. The upcoming event, slated for November, signifies renewed commitment to strengthen trade ties. South Africa&#8217;s call for a decade-long AGOA extension underscores the pivotal role this partnership plays in fostering economic growth and cooperation.



South Africa is set to host the African Growth and Opportunity Act (AGOA) Summit later this year, despite recent diplomatic tensions between the country and the United States (US). In June this year, US legislators called for the relocation of the summit due to controversy surrounding alleged arms shipments to Russia by South Africa. Cleared of any wrongdoing by an internal judicial panel, the US has reaffirmed its commitment to shared growth with South Africa.



“The AGOA Forum is an opportunity for the United States to build upon the success of the Africa Leaders’ Summit and further our economic partnership with AGOA countries,” stated US Ambassador Katherine Tai in a statement announcing this year&#8217;s summit from Washington.



South African President Cyril Ramaphosa not only celebrated the country&#8217;s hosting of the summit but also called for the renewal of the agreement for another decade. The current format of AGOA is set to expire in 2025. Emphasizing the importance of South Africa-US relations, Ramaphosa declared: &#8220;The US remains a very important economic partner in trade and investment, with great potential to further expand economic ties,&#8221; in a press release.



AGOA currently benefits eligible sub-Saharan countries by providing access to US markets for several thousand products, including duty-free access for some exports. South Africa continues to be the largest exporter in the agreement, generating approximately $2.7 billion in revenue for the country as of 2021, primarily from vehicles, jewelry, and metals.



The controversy surrounding the visit of a Russian ship, the Lady R, docking at a South African military base in December 2022, led to the politicization of the AGOA agreement by bipartisan representatives in the US. However, a subsequent South African investigation cleared the country of exporting arms to Russia as part of the incident, resulting in a restored commitment by representatives of both countries to mend strained relations.



The AGOA summit, scheduled for early November in South Africa, will bring together key delegations from all member countries, regional economic entities, as well as representatives from the private and public sectors. The goal is to strengthen trade and economic ties between the US and sub-Saharan Africa.



The summit will also feature a ‘Made in Africa’ exhibition, specifically focused on demonstrating regional value chains on the continent.



“AGOA has helped promote the export of African goods to the United States, and we believe there is scope to deepen its impact on African industrialization,&#8221; said South Africa&#8217;s Minister of Trade and Industry, Ebrahim Patel, reaffirming Ramaphosa&#8217;s commitment to extending the deal. &#8220;Extending it beyond 2025 will promote inward investment in Africa and support our efforts to increase growth through the African Continental Free Trade Area (AfCFTA), which will cover 54 countries and 1.4 billion people.”

Tag: AGOA Summit

FORBES AFRICA SOCIAL MEDIA

AGOA Trade Program Adjustments: What They Could Mean For US-Africa Relations Amid Global Power Shifts

Beyond 2025: The AGOA Summit’s Bid For Extended Economic Ties On The Continent

Renewed Commitment: South Africa To Host AGOA Summit Amid Calls for Extension