Uncertainties cloud the renewal of the Africa Growth and Opportunities Act (AGOA), set to expire on 30 September, 2025, as the United States’ securitised industrial policies now impose tariffs on imports from Africa.
In a roundtable discussion at the Nigerian-American Chamber of Commerce-Nigerian Export Promotion Council event, the Nigerian-American Chamber of Commerce indicated a possible reassessment of the duty-free legislation and advised sub-Saharan governments, specifically Nigeria, to strengthen their negotiation strategies ahead of September 30th. Economic analysts had earlier forecasted that the Africa Growth and Opportunity Act would either be terminated or modified to prioritise the exportation of critical mineral resources, which are essential for green energy technologies amidst the global shift to sustainable energy. Nonetheless, Africa could be primed for an economic boom through emerging transnational relations and expanding trade portfolios.
Implemented in May 2000, the United States Congress adopted the Africa Growth and Opportunity Act to advance economic growth and its trade relations in Sub-Saharan Africa by granting eligible countries duty-free access to the U.S. market. However, President Donald Trump’s reciprocal tariffs, introduced in April this year on African exports to his country, suggest an end to the AGOA legislation.
Trump’s tariffs initially ranged from 10 percent to 50 percent, with Lesotho having the highest, but negotiations lowered the benchmark to 30 percent, with South Africa now taking the lead. While the tariffs seemed like a major disruption to global trade, economic experts say it could also end the decades-long Africa-U.S. trade legislation that has contributed to African economies’ growth for more than two decades.
From 2001 to 2022, Africa’s exports to the United States totalled approximately $103 billion in non-oil exports, creating job opportunities for thousands and fostering growth in sectors like agriculture, textiles, and automobiles. The Act also encourages civil liberties and free market reforms on the continent, in adherence to the eligibility criteria set by the United States. But some of these benefits, particularly job opportunities and exports, could be cut soon.
With the U.S.’ growing protectionist agenda, expectations for the African Growth and Opportunity Act to lapse stand at 75 percent, with only a 20 percent chance of renewal, which is anticipated to be highly adjusted and potentially exclude South Africa, according to FitchSolutions, a capital market company.
If terminated, Sub-Saharan African countries could explore bilateral trade agreements with the United States to keep enjoying duty-free access to products, potentially on critical mineral resources only, but to whose benefit?
Leveraging Trade Agreements for Transnational Trade
The African Growth and Opportunity Act has been an important soft power tool that helps the United States counter Chinese influence, according to Context’s economic analyst.
Following the United States’ reciprocal tariff introductions in April, African countries braced for trade diversion to alternative markets, including China and Japan. In succeeding months, the transnational trade bond between Africa and the two Asian countries has increased significantly, and an advanced trade consensus seems to be underway.
During the 2025 edition of the Tokyo International Conference on African Development (TICAD), Nigeria and Japan agreed to seal a mining agreement that aims to attract Japanese mining industries to invest in Nigeria’s solid minerals sector, particularly for critical mineral resources like lithium, manganese, and cobalt. This is after China reaffirmed its commitment to expanding cooperation in Nigeria’s infrastructure, agriculture, and technology landscapes.
Lesotho has also strengthened its bilateral relations with Japan, which is optimistic about investing and supporting trade in the country. South Africa, Trump’s tariffs’ biggest hit, likewise reaffirmed its commitment to China and BRICS, an emerging economic bloc. If well sustained, these developments could pave the way for Sub-Saharan Africa to expand and diversify its transnational trade. It could also propel foreign direct investments, especially with Africa’s leverage on critical mineral resources. To foster and strengthen these bonds, trade agreements should be capitalised on.
Excluding South Africa, which already has trade membership with the BRICS, other SSA countries that could suffer more from AGOA’s expiration are Nigeria, AGOA’s second biggest beneficiary after South Africa; Ghana; Angola; and the Ivory Coast. These countries should embrace multilateral trade agreements to scale their transnational trade.
Sub-Saharan African governments can facilitate their transnational trade expansion by emulating existing bilateral and multilateral trade relationships like the Africa Continental Free Trade Agreement and the United States-Mexico-Canada Free Trade Agreement.
Diversifying Africa’s Trade Portfolio
The intensifying need for energy transition, coupled with the United States Congress’s prioritisation of critical mineral resources exportation under the probable AGOA renewal, as projected by the Nigerian-American Chamber of Commerce, indicates a global tilt. Critical mineral resources are the next big mine. They form crucial components in the production of green energy technologies and are thus indispensable.
Africa contributes less than 4 percent to global emissions, but it houses critical resources for green energy technologies, making it integral to the global shift to sustainable energy. The United States Congress’s probable adjustment of the AGOA to push critical mineral exports could be a blessing in disguise, but Africa has some work to do.
To capitalise on its leverage, Sub-Saharan African governments must now pivot from oil dependence towards structured mining development.
Sub-Saharan Africa is home to more than 30 percent of the world’s critical mineral reserves. The Democratic Republic of Congo, for instance, supplies more than 70 percent of the world’s cobalt. However, the critical mining sector remains underdeveloped, with major earnings coming from raw mineral exports and country contributions to Gross Domestic Product ranging from 0.33 percent to approximately 48 percent.
Amidst rising global demands for critical mineral resources, Sub-Saharan governments must prioritise developing their non-oil resources to boost value-added processing. Channelling investments to boost development in the critical mining sector could position the continent for resource-driven wealth creation and economic prosperity. State governments should facilitate this sectoral expansion by working with relevant institutions and stakeholders to strengthen mechanisms and support infrastructural development to advance value-added production.
Over the last twenty-five years, the African Growth and Opportunity Act has benefitted African economies, but its expiration could be a chance for expansion. Sub-Saharan Africa does not need another preferential agreement to grow; rather, it should capitalize on transnational trade, diversify its export portfolios, and develop its resources for value-added production.
–Favour Adeboye is a development journalist and a Free Trade fellow at Ominira Initiative.
