• AGOA expires, raising costs and uncertainty for African exporters.
• U.S. backs one-year extension; long-term outlook remains unclear.
• Broader reform proposal aims for 2041 renewal, tied to AfCFTA.

The African Growth and Opportunity Act (AGOA) expired on September 30, creating immediate trade uncertainty for African exporters, even as the White House signaled its support for a one-year extension.

The Trump administration is backing a one-year renewal to allow time for a comprehensive revision of the preferential trade program, a White House official told Reuters. This position aligns with an informal promise made days earlier to a Lesotho government official and previously reported by Ecofin Agency.

The stopgap extension could potentially be attached to a temporary appropriations bill or passed later with retroactive effect, provided political agreement materializes in the U.S. Congress.

Last week, Ecofin relayed comments from Lesotho's Minister of Business, Industry, and Trade, Mokhethi Shelile. Returning from a diplomatic mission in Washington, Shelile reported that members of the House Ways and Means Committee and the Senate Finance Committee had provided informal assurances that AGOA would be extended for one year, possibly by November or December.

The immediate stakes are high. Commercially, the lapse of the preferential regime raises costs for African goods entering the U.S. market, compounding existing concerns over new tariffs decided by Washington this year. Politically, an executive signal is insufficient; legal certainty for investors and exporters requires clear legislative support, whether for a technical extension or a more structural reform.

Speaking on the sidelines of the 80th session of the United Nations General Assembly in New York on September 24, South African President Cyril Ramaphosa reiterated that AGOA's renewal is an essential tool for preserving and creating jobs while facilitating local companies' access to international markets.

The White House’s support for a one-year extension, however, raises questions. A short extension would simply defer the uncertainty until 2026, forcing African exporters to face the same deadline again. It remains unclear if this choice reflects a desire to fundamentally reform AGOA or if it is merely a transitional measure lacking a clear, long-term perspective, particularly given the other priorities dominating the congressional agenda.

A more ambitious proposal was introduced in 2024 to extend AGOA until 2041 and align it with the African Continental Free Trade Area (AfCFTA). This proposed reform included a 16-year extension to offer investors greater predictability, a shift to biennial reviews of eligible countries, the option for Congress to launch out-of-cycle reviews, and greater flexibility in applying sanctions.

Future developments are being closely watched. ODI Global has warned that low and middle-income countries globally could lose up to $89 billion annually due to rising tariffs and cuts in official development assistance, with six African countries cited as among the most vulnerable. Similarly, the Foundation for International Development Study and Research (FERDI) noted that while African economies' direct exposure to new U.S. tariffs may be limited, they could be severely affected by commodity price volatility amid an escalating trade war between the U.S. and China.

Louis-Nino Kansoun