Agoa extension brings relief, but Africa must accelerate AfCFTA rollout

While this extension brings temporary relief, African countries must seize the moment and intensify efforts toward implementing the African Continental Free Trade Area (AfCFTA), to secure a more sustainable and independent trade future.

Enacted in 2000, Agoa was a landmark US trade preference programme aimed at stimulating economic growth and development across eligible SSA countries by granting duty-free access to the US market for thousands of products.

Over the past two decades, Agoa has facilitated increased exports, attracted foreign investment, and boosted job creation in sectors ranging from textiles to agriculture. Agoa helped fuel African exports to the US, which totaled $8 billion in 2024.

Despite these gains, the programme has faced criticism for its limited product coverage, periodic uncertainty regarding renewal, and narrow beneficiary base. It is important to note that as of 2024, only 32 countries were eligible for Agoa, representing just under 60 percent of countries on the African continent.

The expiration of Agoa posed significant threats to the sustainability of African exports, as many businesses scrambled to adjust to potentially higher tariffs on their goods.

In a timely move, the US House of Representatives has passed a Bill extending Agoa benefits. This extension includes provisions for refunding duties collected on eligible goods shipped to the US after September 30, 2025, with refund requests to be filed through the US Customs and Border Protection (CBP).

While the Bill extending Agoa still requires Senate approval and presidential assent, it signals strong political will by the US to maintain trade ties with Africa. For many SSA countries whose economies depend heavily on access to the large US market — including South Africa (the largest exporter under Agoa), Kenya, Madagascar and Lesotho — the extension mitigates economic disruption.

However, the relief brought by this extension should not lull African countries into complacency. Agoa’s tenure of 25 years has shown that reliance on external trade preferences is inherently precarious. Its expiration caused disruptions to supply chains, loss of contracts and layoffs, emphasising the dangers of dependency.

African governments and businesses must therefore leverage this three-year extension as a strategic window. The relatively short extension underscores the need for a more sustainable trade framework under the AfCFTA. It should not be overlooked that this is not the first time an Agoa extension has been sought.

In 2015, the programme was modernised and extended for a period of 10 years, until 2025, at which point the approach to renewal was fraught with crisis and last-minute negotiations. Without proactive measures to build more durable and selfsustaining trade frameworks, this cycle of complacency is likely to continue.

Launched in 2021, the AfCFTA aims to create a single continental market for goods and services, increase intra-African trade, and promote sustainable development. If fully implemented, its 54 signatory countries would form the world’s largest free trade area by number of member states, with a combined gross domestic product exceeding $3 trillion.

For businesses and investors currently operating in Africa, assessing the relevance of AfCFTA involves various practical steps including analysing market access opportunities. Businesses should review tariff schedules, rules of origin and non-tariff barriers affecting their sectors under the Agreement establishing the AfCFTA and its instruments.

Various resources are available through National Implementation Committees for the AfCFTA, government ministries responsible for trade and customs authorities that can also assist with this.

Many countries already have an AfCFTA implementation roadmap in place.

Thereafter, businesses need to map their current supply chains to determine potential for sourcing and expanding distribution within Africa, without incurring extra tariffs as enhanced intra-African trade will foster greater resilience.

Businesses should also invest in understanding harmonised trade regulations, quality standards and dispute resolution mechanisms under AfCFTA. Besides this, businesses should assess investment incentives that are available in several African countries, which offer tax breaks and investment facilitation which are linked to export diversification. Identifying relevant incentives can enhance project viability.

The recent passing of the bill extending Agoa trade preferences potentially offers crucial relief to SSA economies dependent on US markets. Yet, with only three years granted, time is ripe for Africa to reduce its reliance on external trade preferences and embrace the continent’s ambitious AfCFTA agenda.

By taking concrete steps to assess and integrate AfCFTA frameworks into business strategies, African countries and investors alike, stand to unlock a new era of economic independence and intra-continental prosperity.

The journey toward full AfCFTA implementation may be gradual and complex, but it is undeniably the keystone for sustainable African economic growth.

The authors are Tax and Customs consultants with PwC