Unpacking the value of AGOA two decades on

The African Growth and Opportunity Act deal expires in 2025. In this article, Prof David Luke at the Firoz Lalji Institute for Africa, London School of Economics and Political Science, looks at what it’s achieved in 23 years.

- Prof David Luke

African governments are seeking an extension of the African Growth and Opportunity Act (AGOA) beyond 2025. The law was enacted in 2000 to “encourage increased trade and investment between the United States and sub-Saharan Africa”. We asked David Luke, who specialises in African trade policy and trade negotiations, what benefits AGOA has brought for qualifying African countries and how it can be improved.

TO WHAT EXTENT HAS THE AGOA GOAL BEEN ACHIEVED? 

The duty- and quota-free access to the US market granted by AGOA has helped in boosting trade and investment between sub-Saharan Africa and the US. Many of the qualifying African countries have recorded specific successes in goods exported under AGOA to the US. These include textiles and apparel from Kenya, Ethiopia, Mauritius, Lesotho, Ghana and Madagascar. In Kenya, for instance, the apparel-dominated AGOA sales have grown from US$55 million in 2001 to US$603 million (about R11 billion) in 2022, accounting for 67,6% of the country’s total exports to the US.

South Africa has sub-Saharan Africa’s most diversified export list. The value of its automotive sales to the US increased by 447,3% between 2001 and 2022 under AGOA. South Africa’s vehicle exports to the US increased by 1 643,6% in the first year of the Act, from 853 units in 2000 to 14 873 units in 2001.

Other country-specific successes include Ghana, where non-oil products like plant roots, textiles and travel goods are accessing the US market under AGOA. Ghana’s exports to the US grew from US$206 million in 2000 to US$2,76 billion (about R50 billion) in 2022, though only 26% of this trade was under AGOA.