After AGOA: How South Africa Can Forge a New Export Destiny by 2027

By Michael Sudarkasa

Trade preferences are a bit like a generous relative’s allowance: pleasant while they last, and dangerous to build a life around. From January 2027, the United States will end South Africa’s preferences under the African Growth and Opportunity Act (AGOA). For the exporters who relied on them, that is a genuine blow. For the country’s trade strategy, it may prove a useful shock.

The reason is simple. A single dominant market, however lucrative, is a dependency rather than a strategy. The more urgent question is not how to mourn AGOA but where else South African companies can compete, and with what. Four markets suggest that the answer varies far more than the conventional wisdom allows.

Africa: The Market On the Doorstep

Start close to home. South African firms are already selling mining equipment, electrical machinery, food products and household appliances across the continent under preferences negotiated through the African Continental Free Trade Area (AfCFTA). Ghana, Kenya, Egypt and Rwanda rank among the leading destinations for these preferential shipments.

Note what is being sold: machines, appliances and processed food. These are manufactured goods with local content and local jobs attached, not raw materials. If South Africa wants an export model that creates employment rather than merely moving commodities, the African market is where that model is already taking shape.

India: Demand That Rewards Ambition

India buys gold, steam coal, copper and manganese ores, and phosphoric acid from South Africa. Look at that list again and a pattern emerges: much of it leaves the country in a fairly raw state.

The interesting question is not whether India will keep buying. It is whether Indian demand is deep enough to justify more processing in South Africa before the cargo is loaded. Every tonne of ore that is refined at home rather than abroad keeps wages, skills and tax revenue in the domestic economy. India’s appetite is the opportunity; capturing more of the value chain is the challenge.

The European Union: An Established Foothold

Europe is the familiar market, and familiarity is an asset. Vehicles, citrus, grapes and wine have already found buyers there. Those relationships, built over years, give South African suppliers something no tariff schedule can create: trust.

The task here is expansion rather than discovery. Exporters with a proven product and an existing buyer should be asking which adjacent products can travel the same route.

China: A Temporary Window Worth Using

China presents the most time-sensitive opening. Its zero-tariff scheme for qualifying South African goods runs only through April 2028. Fruit, nuts, wine and rooibos are among the products that could benefit.

The word “temporary” matters. Windows like this reward the quick and punish the hesitant. Exporters that move early can establish distribution and brand recognition while the tariff advantage lasts, and may be well placed to keep customers once conditions change.

Start Small, Calculate Honestly

Strategy documents love sweeping ambition. Exporters need something humbler: one product and one target market. The sensible sequence is to find a genuine buyer or distributor, confirm the tariff treatment and product requirements, and work out the landed cost before a single container is committed. Plenty of export ventures fail not for lack of demand but because nobody did the arithmetic on freight, duties and compliance.

The Real Prize is At Home

Here is the argument that matters most. Opening new routes is necessary, but it is not sufficient. A country that merely finds new buyers for the same unprocessed goods has changed its customers without changing its economy.

The bigger opportunity is to use these trade routes to raise the share of what South Africa processes, packages and manufactures itself. Rooibos sold as a branded, packaged product captures more value than rooibos sold in bulk. Ore refined locally supports more jobs than ore shipped raw. That, rather than the loss of one American preference, is the test of whether South Africa’s export strategy succeeds.

AGOA’s end is a deadline. It is also an invitation to ask a harder question than “who will buy our goods?” The better question is “what are we selling, and how much of its value stays here?”

Michael Sudarkasa is a commercial attorney and African economic development expert. He is the CEO and founder of Africa Business Group, a South Africa-based consultancy focused on business development, agriculture, renewable energy, and capacity building. With extensive experience in private sector growth, trade, investment, and corporate finance across Africa, he has authored publications on African trade and investment and previously led the African Fertilizer and Agribusiness Partnership (AFAP). He also serves on multiple boards and advisory panels in the economic development and impact investment sectors.