AGOA Was Renewed – But African Exporters Just Learned a Costly Lesson

By Ziad Hamoui

Three months of uncertainty revealed what reliance on non-reciprocal arrangements truly costs the continent. The US House of Representatives approved the African Growth and Opportunity Act’s extension through 2028 last month, though President Trump subsequently limited the renewal to end-2026.

For eligible African nations, this represents welcome – if qualified – relief. Yet the three-month gap between the program’s September 30, 2025 expiration and its eventual renewal exposed a structural vulnerability that African economies can no longer afford to ignore: the perilous strategy of building export-driven growth around non-reciprocal preferential trade schemes controlled by external political actors.

The cost of this dependence was immediate and tangible. Kenya’s apparel manufacturers absorbed tariffs reaching 28 percent during the uncertainty period.

Companies found themselves unable to cost contracts with any confidence. Investment decisions ground to a halt. Entire value chains descended into planning paralysis, their market access hostage to political processes unfolding thousands of miles away in Washington.

When exporters cannot quote stable prices, the consequences cascade through every link in the commercial chain. Raw material procurement becomes speculative.

Workforce planning turns reactive. Buyer negotiations lose their foundation. Banking relationships strain under unpredictability. For three months, thousands of businesses across the continent hemorrhaged money and opportunities while waiting for clarity that might never come.

The Continental Alternative Already Exists

The infrastructure for an African alternative is not theoretical – it is operational. The Pan-African Payment and Settlement System saves an estimated US$5 billion annually in transaction costs by enabling instant cross-border payments in local currencies, eliminating the dollar as an expensive intermediary.

The African Continental Free Trade Area’s legal framework has been ratified by member states. Trade corridors are under active construction. The institutional architecture for regional integration exists and functions.

What constrains adoption is not capability but confidence. Traders and manufacturers continue defaulting to familiar external systems because intra-African alternatives still feel nascent, untested, risky.

Yet every external shock that disrupts preferential access – whether AGOA uncertainty, Brexit complications, or shifting European Union priorities – strengthens the economic case for regional integration and exposes the hidden costs of dependence.

The numbers are stark. UN Trade and Development estimates that addressing non-tariff barriers alone could add US$7.1 billion to African GDP.

Reducing transit delays by merely 20 percent would deliver economic benefits equivalent to eliminating every tariff on the continent. These internal obstacles keep formal intra-African trade stuck at 15-18 percent of total trade volumes – a ratio that would be unthinkable for any other regional bloc with comparable economic potential.

Time Bought, Not Problems Solved

AGOA’s renewal buys time, nothing more. African governments and businesses should use this window not to relax but to intensify efforts at eliminating the genuine constraints on intra-African commerce: the non-tariff measures that add hidden costs, the border inefficiencies that turn hours into days, the fragmented regulatory frameworks that treat neighboring countries as foreign territory, and the absence of harmonized standards that force exporters to navigate different requirements in each market.

The lesson from these three months is expensive but clear: preferential access granted by external powers is a privilege, not a right, and privileges can be suspended, modified, or revoked whenever political winds shift. Building sustainable export competitiveness requires infrastructure, systems, and markets that Africans control.

Regional integration is not romanticism – it is risk management. Every dollar of trade reoriented toward continental markets is a dollar less vulnerable to the uncertainties of foreign legislative calendars.

Every harmonized standard is one less compliance burden on manufacturers. Every reduction in border crossing times is money returning to productive use rather than lost to delays.

The AGOA renewal should be received not with relief but with renewed urgency. The gap exposed the cost of dependence. The question now is whether African policymakers will use this reprieve to address it – or simply wait for the next crisis to remind them of what they already know.

Ziad Hamoui is the Co-Founder and Past President of the Borderless Alliance, a leading private-sector advocacy group promoting economic integration and removing trade and transport barriers in West Africa. With extensive experience in Ghana’s road transport, logistics, and shipping sectors, he currently serves as Executive Director of Tarzan Enterprise Ltd., a long-established family business. He is a former Co-Chair of the Africa Food Trade Coalition, Co-Founder of the Trade Facilitation Coalition for Ghana, and serves on multiple high-level advisory committees on trade, transport, agriculture, and security. A Chartered Fellow of the Chartered Institute of Logistics and Transport (CILT) Ghana, he is also a former member of its Governing Council.