The African Growth and Opportunity Act (AGOA) is a U.S. trade preference program designed to foster stronger commercial ties between the United States and sub-Saharan African countries. First established in 2000, AGOA provides eligible countries in sub-Saharan Africa (SSA) with preferential access to the U.S. market for most of their exports. It aims to promote economic growth through trade, encourage market-oriented reforms, and strengthen trade and investment ties with the region.
Country Eligibility
Currently, 32 of the 49 potential program country beneficiaries in SSA are eligible for AGOA. The President annually reviews each country's eligibility, considering factors such as human rights, rule of law, and foreign policy interests. Following the 2024 annual review, no changes were made to the list of countries eligible for AGOA benefits for calendar year 2025. Seventeen SSA countries remain ineligible for the program's preference benefits in 2025.
These countries and the reasons for their ineligibility include:
- Burkina Faso, Gabon, Guinea, and Niger (rule of law)
- Burundi and South Sudan (political violence)
- Cameroon, Central African Republic, Eritrea, Ethiopia, and Uganda (human rights)
- Equatorial Guinea and Seychelles (income graduation)
- Mali (human rights, rule of law, worker rights)
- Somalia, Sudan, and Zimbabwe (never eligible)
Rwanda's AGOA benefits for apparel exports have been suspended since July 31, 2018, due to increased Rwandan tariff barriers on used clothing imports from the United States.
Authorization and Amendments
Congress established AGOA in 2000 and has amended its authorization law several times. The Trade Preferences Extension Act of 2015 extended AGOA's authorization for 10 years to September 2025. The African Growth and Opportunity Act and Millennium Challenge Act Modernization Act of 2018 further refined the program.
Read also: Experience Fad's Fine African Cuisine
Trade Preferences and Provisions
AGOA provides beneficiary countries with duty-free access to the U.S. market for imports of eligible products. This trade preference program goes beyond the scope of the Generalized System of Preferences (GSP), offering additional benefits to least-developed countries and including products excluded from GSP, such as autos and certain types of textiles and apparel. Key provisions include:
- Trade Preferences: Duty-free access to the U.S. market for eligible products.
- Apparel and Third-Country Fabric Provision: This provision allows AGOA countries to remain competitive in the apparel sector by using fabrics from third-party countries.
Trade Capacity-Building (TCB)
AGOA directs the President to provide TCB to AGOA beneficiaries. The U.S. Agency for International Development (USAID) has administered certain TCB-related projects in support of AGOA, including funding African trade and investment hubs, which work to increase AGOA utilization and regional producers' access to international markets.
What the End of AGOA Means for Africa and the World? – The African Economic Review 2025#44
AGOA Forum and Country Eligibility Reviews
The President is required to convene an annual forum on trade and investment relations and AGOA implementation, typically alternating between the United States and an AGOA country. The 2015 reauthorization amended the program to allow for out-of-cycle reviews in response to public petitions. The Administration may remove country eligibility entirely or for specific products, subject to congressional notification.
Senator Coons on AGOA's Importance
Senator Chris Coons (D-Del.) has been a vocal advocate for AGOA, emphasizing its role in fostering deeper investment and stronger commercial ties between the United States and sub-Saharan African countries. In a speech at the Wilson Center Africa Program’s Brown Capital Management Africa Forum, Senator Coons highlighted the importance of reauthorizing and improving AGOA. He noted that Africa is the fastest-growing continent with the youngest population, making it a crucial market for U.S. businesses.
According to Senator Coons, AGOA is more critical than ever in a world that is increasingly isolationist and protectionist. He emphasized that a lengthy and early extension of AGOA would benefit businesses looking to diversify their supply chains after the shocks of the pandemic. He also acknowledged the growing economic integration of Africa with China, underscoring the need for the United States to strengthen its engagement with the continent.
Read also: The Story Behind Cachapas
The AGOA Renewal and Improvement Act of 2024
Senators Chris Coons and Jim Risch (R-Idaho) introduced the African Growth and Opportunity Act (AGOA) Renewal and Improvement Act of 2024. This bill aims to extend AGOA until 2041, providing businesses with the certainty they need to increase investment in sub-Saharan Africa. The legislation also seeks to improve the program to encourage sustainable development, regional integration, and stronger relations between the United States and countries in the region.
Key provisions of the AGOA Renewal and Improvement Act include:
- Extending AGOA by 16 years, pushing back the program's expiration from 2025 to 2041.
- Supporting African governments in developing specific strategies for maximizing AGOA’s benefits.
- Building on the African Continental Free Trade Agreement (AfCFTA) to incentivize the integration of continental supply chains and enable more trade among African countries.
Challenges and Future Considerations
Despite its successes, AGOA faces challenges and criticisms. Some argue that its administration has been clunky, with annual reviews causing uncertainty for businesses. Others point out that AGOA has not been utilized as much as initially hoped and that it needs to be modernized to address the digital economy and other service sectors.
As Congress considers AGOA's potential reauthorization, it may consider proposals to refine AGOA's statutory goals. In the 118th Congress, two bills (S. 4110 and H.R. 10366) were introduced to, among other ends, extend AGOA; allow inputs from non-AGOA, African Continental Free Trade Area (AfCFTA) implementing countries; and require biennial rather than annual eligibility reviews.
AGOA Imports and Key Trends
In 2024, AGOA imports totaled $8.0 billion, a 13% decrease from $9.3 billion in 2023. Crude oil imports comprised 25% of AGOA imports, valued at $2.0 billion. Non-energy imports were valued at $6.0 billion, with South Africa being the top supplier.
Read also: Techniques of African Jewellery
AGOA imports remain concentrated in a few countries and industries, but diversification has grown since the 2000s.
| Country | AGOA Non-Energy Imports (2024) |
|---|---|
| South Africa | Top Supplier |
As the United States seeks to strengthen supply chains in critical sectors, AGOA could play a role in expanding SSA's integration in global value chains. Congress may also consider how AGOA could play a role in such efforts.
Senator Coons' efforts to renew and improve AGOA reflect a commitment to strengthening U.S.-Africa trade relations and supporting economic growth and development in sub-Saharan Africa. With the right policies and investments, AGOA can continue to be a valuable tool for both African nations and American businesses.
