Africa's Best Read
Stitch in time: East Africa’s biggest economy, Kenya, exported clothing worth $380 million in 2015, when the US extended Agoa by a decade. Discussions are underway this week to renew the trade agreement once more. Photo: Riccardo Gangale/Getty Imagesembarked on the longest and most extensive trip to Africa by any sitting US president in history at the time.
In 2021, five of the 39 Agoa beneficiaries — South Africa, Kenya, Lesotho, Madagascar and Ethiopia — accounted for about 82% imports, excluding crude, which has historically dominated trade under the programme. The biggest challenges to having African countries extract greater value from Agoa are probably on the supply side and in navigating export processes, Naumann added.
But, as Naumann points out, Agoa’s African beneficiaries have no real negotiating power under the Act — which, if renewed, is in the hands of an often mercurial US congress. , adds an extra layer of uncertainty to Agoa’s future beyond September 2025. Trump infamously once referred to African nations as “shithole countries”.
Nhlanhla Cyril Mbatha, director of the Rhodes Institute of Social and Economic Research, agreed that Agoa has been America’s response to wrestle back influence in the wake of China’s growing political and economic authority on the continent. Current global events, including Russia’s aspirations to reshape the political world order, mean that the trade pact has become all the more important to the US, Mbatha said.
China’s rapid economic influence on Africa seems to have undermined America’s economic aspirations for African countries outlined through the Agoa, Mbatha added. “It is easier — it takes less time and local investment — to export raw materials than to first add value to products. This is especially the case if there is big demand for raw products from China.”
“Ultimately this is a battle of political and cultural values. Partnering for doing business with China for many African countries has less transformational costs and transactional costs and therefore it is more attractive and effective. This is also a challenge for both the US and the EU,” Mbatha said.
Perhaps the most pressing demand from Agoa’s beneficiaries is for its early renewal. Patel has underlined that the Act’s early renewal will go a long way towards creating certainty for investors as the continent looks to assert its role in the global economy. “Those geopolitical questions will have implications on the conversations, perhaps even more on the African side than on the US side … I mention the African side because with the rise of China, Russia, Indonesia, Brazil and their increased economic investment and commercial relations with Africa, the African side feels they have more options.”
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