Africa welcomes opportunities, flags challenges as US extends AGOA initiative till 2041

The African Growth and Opportunity Act (AGOA) has been extended by 16 years to end in 2041, providing significant potential for fostering trade and investment between Africa and the United States.

The programme which was supposed to end in 2025 provided eligible sub-Saharan African countries with duty-free access to the United States’ market for over 1,800 products.

AGOA dates from 2000 and has the goal of promoting economic growth through good governance and free markets.

This extension of this programme to 2041 has come with new rules which the Pan-African Chamber of Commerce and Industry (PACCI) have argued that some of them disadvantaged the business on the continent.

While PACCI applauded the 16-year extension and provisions that strengthened Africa-United States trade relations, it raised concern that the proposed legislation contained areas that could pose challenges to businesses in African countries.

Among the new requirements was the prohibition of Chinese cotton (Xinjiang region) under the Uyghur Forced Labour Prevention Act which PACC noted added compliance burdens to African apparel exporters who relied on imported fabrics.

PACC Executive Director, Kebour Ghenna, in a statement issued on Monday requested targeted support for African textile industries to develop local or alternative supply chains, reducing dependency on imports flagged under such regulations.

The updated eligibility standards also included detailed requirements around corruption, human rights, child labour, and religious freedom.

According to Ghenna, many African countries risked disqualification due to their inclusion in specific US reports, such as the Trafficking in Persons Report and the Child Soldiers Prevention Act.

Limited product coverage was another key challenge identified by PACC, with Ghenna saying “while most tariff lines already enjoy duty-free access, expanding product coverage is crucial for sectors excluded from AGOA preferences.

Ghenna on the other hand also identified some key positives which came with the extension of AGAO such as the financial support for utilisation Strategies amounting to US$100 million appropriation, offering opportunities for trade capacity building and export promotion.

He also pointed out cumulation rules allowing input from AfCFTA member states support regional integration and value chain development.

“PACCI calls on its members and the broader business community to support the extension of AGOA while advocating for adjustments to address the identified challenges.

“We encourage African governments to proactively engage with US lawmakers and stakeholders to ensure AGOA continues to serve as a catalyst for African economic growth,” Ghenna said.

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