By Kwame Asante (Executive Director, Structured Solutions Development, Cash, Standard Chartered Bank)
The African Growth and Opportunity Act (AGOA), a landmark U.S. trade initiative launched in 2000, now faces an uncertain future as renewal discussions stall in Washington. If allowed to expire, it would mark the end of a two-decade-long preferential trade relationship that has shaped Africa–U.S. economic engagement, particularly in sectors such as textiles, agriculture, and light manufacturing.
The impact would be most acutely felt by economies like Kenya, South Africa, Ghana, and Nigeria, which have leveraged AGOA to diversify exports and attract investment.
AGOA currently provides duty-free access to the U.S. for over 6,500 products from 35 eligible sub-Saharan African countries. It has supported export-led growth, job creation, and industrialisation, especially in labour-intensive industries.
Disruption Ahead: What’s at Stake
In Kenya, the apparel sector has been the principal beneficiary of AGOA, with over 90% of textile exports destined for the U.S. The program supports approximately 58,000 direct jobs, primarily held by women in export processing zones. Without AGOA, these businesses face significant threats from rising tariffs and diminished competitiveness.
South Africa, with one of the continent’s most diversified economies, has used AGOA preferences to grow exports of agricultural produce such as citrus and wine, as well as automobiles and industrial goods. The loss of AGOA would dampen export earnings, constrain job creation, and disrupt supply chains that support the broader Southern African Development Community (SADC) region.
Ghana and Nigeria have also leveraged AGOA to expand non-traditional exports. Ghana’s apparel exports and agricultural shipments such as yams, pineapples, and cocoa derivatives have found a reliable market under the scheme. Nigeria, once reliant on oil exports under AGOA, has made strides in growing its light manufacturing and agro-processing sectors. These gains are now at risk.
Beyond the numbers, the cessation of AGOA would represent a setback in Africa’s drive toward industrialization, job creation, and inclusive economic growth. It would also reverse momentum in building resilient value chains across the continent.
AfCFTA: A Strategic Pivot for Resilience
The African Continental Free Trade Area (AfCFTA) offers an alternative path that shifts the centre of gravity from external preferences to building a robust, integrated African market. By unifying 54 countries with a combined population of 1.4 billion and a GDP of $3.4 trillion, AfCFTA aims to raise intra-African trade from its current level below 17%, compared to over 60% in Europe and Asia.
At its core, AfCFTA seeks to deepen regional value chains. Rather than exporting raw materials, African countries can collaborate to produce finished goods, enhance industrial competitiveness, and expand employment. Key sectors such as textiles, processed foods, auto components, and pharmaceuticals which had previously benefited from AGOA can be redirected to serve growing intra-African demand.
Moreover, AfCFTA provides a framework for Africa to negotiate with global partners from a position of strength. It reinforces the continent’s ambition to define its trade agenda based on shared prosperity, self-sufficiency, and strategic alignment.
Progress and Priorities
AfCFTA implementation has made significant strides:
- All 54 African Union countries have signed the agreement, with 49 ratifying it.
- The Guided Trade Initiative, launched in 2022, is enabling trade under AfCFTA rules, with promising early results.
- Four priority sectors Agro-processing, Pharmaceuticals, Automotives, and Transportation & Logistics have been earmarked for regional value chain development.
- Protocols on Goods and Services, Investment, Competition Policy, Intellectual Property, and e-commerce have been negotiated and adopted.
- Tariff schedules and rules of origin now cover 92% of traded goods. Textiles and automotive rules are nearing completion.
- The Pan-African Payment and Settlement System (PAPSS) is operational, connecting over 20 central banks and 160 commercial banks to enable local currency settlements.
- Visa-free entry for African citizens is now in place in 7 countries, with 24 offering e-visas.
- An AfCFTA Adjustment Fund comprising a Base Fund (for technical assistance), General Fund (for trade infrastructure), and Credit Fund (for SME and private sector capacity building) has been launched to help countries transition and invest in trade-enabling systems.
These developments represent more than policy achievements, they are foundational steps toward a new continental economic order.
To accelerate momentum, policymakers must focus on:
- Finalising customs harmonisation, digital trade systems, and product standards.
- Investing in infrastructure such as ports, transport corridors, and logistics hubs.
- Enabling SMEs which make up over 80% of African enterprises to access formal markets, finance, and certification mechanisms under AfCFTA.
Implications for African Businesses
AfCFTA presents a generational opportunity for businesses. It opens access to a liberalised market across 54 countries, offering greater scale and new customer bases. With reduced tariffs, simplified rules of origin, and better logistics, cross-border trade becomes more feasible and less risky.
To benefit, companies must:
- Register with national AfCFTA secretariats.
- Comply with certification and rules of origin.
- Strategically position themselves to participate in regional value chains.
Early adopters particularly in manufacturing, logistics, and agro-processing stand to gain a first-mover advantage as the trade landscape shifts.
How We Can Help
At Standard Chartered, with a 150-year legacy on the continent, we are actively supporting clients to navigate and benefit from AfCFTA. We provide:
- Access to capital and digital trade and cash platforms.
- Policy insights and strategic advisory on AfCFTA; and
- Tools to help businesses scale regionally.
Our goal is to connect clients to new growth corridors, unlock capital flows, and drive inclusive trade across Africa.
Conclusion: Africa at a Strategic Crossroads
The potential end of AGOA marks a pivotal moment in Africa–U.S. economic relations. But rather than viewing it as a setback, it should be seen as a catalyst for self-determination. AfCFTA provides the platform to define a new narrative, one centred on African-led growth, intra-continental trade, and regional value chain and integration.
The policies and tools are now in place. The ambition is clear. What remains is collective execution. Policymakers, businesses, and development partners must work together to make AfCFTA not just a trade agreement, but a transformative growth engine for the continent.
Africa is stepping into a new trade era, this time, on its own terms.
