The agricultural sector can overcome the impact of potential Agoa exit

THE hostile disposition of the US President Donald Trump towards South Africa raises serious concerns about the possible exclusion of South Africa as a beneficiary of the African Growth and Opportunity Act (Agoa), which is set for renewal in 2025.

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With South Africa consistently ranking as the top Agoa user, as well as the number one African agricultural exporter under Agoa, we look at the possible ramifications for agriculture.

Agoa, implemented in 2000 by the US, establishes a unilateral trade preference programme, allowing certain exports from South Africa and many other eligible sub-Saharan African countries to enter the US market, duty-free. Under Agoa, South Africa supports South Africa's agricultural exports to the US benefit from tariff-free treatment. Since its inception, South Africa has exported over $33.7 billion (R626bn) worth of agricultural products to the US.

This is according to a November 2023 United States Department of Agriculture, foreign agricultural service report, entitled “Agoa Supports South Africa Agriculture”.

Impact of a potential Agoa loss

A November 2023 report published by the Brookings Institution, a non-profit organisation, assessed the detailed potential impact of an Agoa exit for South Africa.

The report found that the impact of a loss of preferential market access under Agoa on exports and gross domestic product (GDP) would be small.