WeeklySA_AdminMARKET: SADC warns non-renewal of AGOA represents ‘one of the greatest shocks to regional economies since the COVID-19 pandemic’…
By Moses Magadza
WINDHOEK – Non-renewal of the African Growth and Opportunity Act (AGOA) by the USA pivotal in the creation of more than 200 000 jobs could devastate Southern African countries and undermine economic stability.
This is the warning of Ruth Mendes, Chairperson of the Southern African Development Community (SADC) Parliamentary Forum’s Trade, Industry, Finance and Investment (TIFI) Committee.
Speaking in an exclusive interview, she warned that the non-renewal of AGOA represented one of “the greatest shocks to African economies since the COVID-19 pandemic, potentially reversing years of trade gains and industrial growth”.
She described the situation as “a major setback” that could severely disrupt exports, employment and economic stability across the Southern African region.
In a separate interview, Strategist and feminist researcher, Memory Kadau, was forthright in her response: “This is not an economic issue. It is a socio-political moment. The Southern African Development Community (SADC) region must choose between dependency and dignity. The future lies in building African value chains that work for Africans especially African women.’’
Mendes said South Africa, the largest African exporter to the US, stood to lose more than 35 000 jobs in the citrus sector alone. Madagascar could face a 47 percent tariff on vanilla and textile exports while Lesotho’s textile industry, which employed between 30 000 and 40 000 workers, may collapse.
Smaller exporters of apparel and agricultural goods that included Lesotho, Madagascar and Tanzania, would be among the worst affected. These countries faced average tariff rates that could double, effectively eroding their competitive advantage in the US market.
“With the non-renewal of AGOA, we must confront the reality of 1 800 products that will no longer enjoy duty-free access to the U.S. market. The consequences are less revenue for African countries, reduced agricultural production and reversal of the development already achieved,” said Mendes.
AGOA, enacted by the US Congress in 2000, had allowed eligible Sub-Saharan African countries to export over 6 000 products duty-free to the American market. In 2023 alone, Africa exported goods worth 9.7 billion dollars (R168 billion) to the United States under the Act, with sectors such as textiles and agriculture thriving.
According to Mendes, the programme had been pivotal in job creation across the continent.
“At least five countries – Lesotho, Kenya, Namibia, eSwatini and Uganda- recorded 200 000 jobs as a direct result of AGOA’s enabling framework. Without it, we risk widespread job losses, industry closures and losing the grip we thought we had on global trade.”
Mendes stressed that the crisis offered an opportunity for Sub-Saharan Africa to strengthen its internal trade networks and resilience. National parliaments, she added, had a critical role in advocating for AGOA’s extension and safeguarding regional economic interests.
She referred to ongoing diplomatic engagements by South Africa’s Trade, Industry and Competition Minister Parks Tau, who has been in talks with the US Trade Representative, Jamieson Greer, to protect trade relations.
“The Southern African Development Community (SADC) should stand in solidarity with South Africa and mobilise support for trade arrangements that protect developing economies. We must not wait for disaster. Parliaments must lead in urging our governments to act swiftly, secure markets and safeguard livelihoods across the region’’, Mendes said.
Kadau, meanwhile, said the end of AGOA had negatively affected many SADC economies that depended on duty-free access to the US market. The economic fallout, however, was hitting women disproportionately.
‘’ Women are the hardest-hit by the expiry of AGOA especially in the textile and agro-processing sectors. The situation has deepened inequality because women in these sectors have limited savings or alternative opportunities.’’
She warned that agriculture, another major employer of women, also felt the squeeze. Exports such as tobacco, citrus, sugar, wine and canned fruit now faced higher tariffs. National governments must support farmers through subsidies and logistics and align agricultural policies with the African Continental Free Trade Area (AfCFTA).
Kadau said although the US Congress was debating a short-term AGOA renewal, she believed that this would offer little relief.
She added however, that despite the shock, AGOA’s expiry could spark a shift towards regional self-reliance. The end of AGOA could actively push SADC countries to trade more with each other and pointed to practical value-chain opportunities.
‘’Cotton grown in Tanzania and Zimbabwe can be processed into fabric in eSwatini and turned into clothing in Lesotho or Madagascar, then sold across Africa. This required political will and action.’’
Governments must be urged to fix border delays, harmonise trade standards and invest in transport corridors to unlock regional markets.
Mendes said this was a moment for Sub-Saharan Africa to turn around and make a comeback. ‘’We can sustain or even increase production by exporting to other markets, in line with regional trade laws. It is time to prioritise intra-SADC trade and stand together’’.
She added: “With South Africa assuming the G20 presidency, this platform provides a strategic opportunity to leverage global leadership in advancing regional trade interests.
Missing this moment would have serious consequences not only for South Africa but for the wider SADC region.
“Our countries require trade concessions like AGOA rather than reciprocal bilateral agreements that often disadvantage developing economies’’.
Mendes urged governments to explore alternative trade partnerships and maintain agricultural output to cushion citizens, particularly youth, from potential job losses.
Kadau said even if AGOA was reinstated, it would not fix the long-term issue. “SADC countries must strengthen regional trade and value addition rather than rely too much on external markets, which have always replicated extractive and exploitative hierarchies.”
She stressed that trade must be gender inclusive and outlined actions to support women traders, entrepreneurs and manufacturers. They included simplified cross-border permits for women small-scale traders; mobile-first customs systems and small-parcel trade corridors; safe trading infrastructure like storage, lighting and child-care at border markets; collateral-free financing and certification support for women exporters; public procurement quotas for women-led businesses; protection from harassment and corruption at borders; and gender impact assessments for regional value chain projects.
“The SADC Parliamentary Forum must push for harmonised gender-responsive trade policies. Otherwise, women will continue to be locked out of economic participation,” Kadau said. “These shocks may push people, especially young women, to migrate in search of work. Without coordinated regional action, this will deepen urban poverty and instability”.
Kadau urged diversification of trade markets to reduce reliance on the US and other external markets; protection of women workers to provide emergency support and retraining; financing of industry reorientation to support firms to upgrade and access new markets; and collection of gender data to track real impacts and guide policy.
“The fundamental building block is political will. If everyone plays their part (governments, parliament, private sector, development banks and civil society) this crisis can become a moment of self-reliance and regional solidarity.”
The SADC Parliamentary Forum, Kadau added, should lead legislative action that enabled inclusive regional trade.
Laws must remove barriers for women and small traders, embed gender targets in industrial policy and align national laws with AfCFTA provisions. – The Pan Afrikanist/additional reporting by Monk Nkomo
