The BGA Kenya team, led by Managing Director Dickson Omondi, wrote an update to clients regarding the United States’ extension of the Africa Growth Opportunity Act (AGOA).

Context

  • AGOA provides eligible African countries with duty-free access to the U.S. market for over 1,800 products. The extension safeguards dependent value chains in African export markets and for importing U.S. companies.  It provides a welcome relief to U.S. companies and African exporters to safeguard their supply chains in the short-term, and it   provides a foundation to negotiate mutually beneficial trade agreements in the long-term.
  • This is critical given the importance of the U.S. consumer market for African exporters of apparel and textiles, crude oil and refined petroleum products, agricultural products and minerals. For example, Nigeria exported crude oil worth over $1.6 billion in 2024. South Africa, Kenya, Madagascar, Democratic Republic of Congo and Cote D’Ivoire are other top exportes in the non-oil category benefiting from the AGOA program.

Significance

  • The short-term extension of AGOA should be understood in the overall context of shifting geopolitics and competing economic interests.  The extension does little to lessen the urgency to negotiate a more durable and wholistic framework that sustains benefits currently enjoyed under the act. Whether in the form of standalone AGOA legislation, or within broader bilateral trade agreements, the onus is on policy makers in Africa and Washington to negotiate deals that deepen trade relations.  Securing such deals ahead of the December 31, 2026, AGOA expiry date is critical to assure investors and create stability in the AGOA value chain.

Implications

  • The uncertainties caused by the expiry of AGOA in September 2025 demonstrate the interplay of opportunities and challenges in global trade.  African economies are more vulnerable and at greater risk of disruption by global shocks and externalities.  To mitigate these, African countries should incentivize stronger manufacturing sectors to diversify exports, and simultaneously diversify their export markets, including through intra-African trade mechanisms, regional economic communities and stronger partnerships with Asian markets such Japan, India and Malaysia.
  • At the same time, AGOA remains one of United States’ most impactful economic foreign policy instruments in Sub-Saharan Africa. The imperative of negotiating a longer-term fix of AGOA, as a stand-alone instrument or in concert with bilateral trade agreements, is an urgent priority for policy makers across Africa and in Washington.

We will continue to keep you updates on developments in Africa. If you have questions or comments, please contact BGA Kenya Managing Director Dickson Omondi at domondi@bowergroupasia.com.

Best regards,

BGA Africa Team

A small ginko leaf

Managing Director, Kenya

Dickson is a leading expert on the political economy, business and regulatory affairs of countries across Africa, with more than 25 years of experience in political party development, legislative strengthening, governmental accountability, public policy and civic engagement. He is a strategic leader and a firm believer in the continent’s economic and political potential, reinforced by his experience traveling and working in more than 16 countries in sub-Saharan Africa. Dickson works alongside multinational companies, governments and civil society to find mutually beneficial solutions for all stakeholders. His team’s strategic advocacy across a broad range of sectors helps organizations overcome challenges and ... Read More