AGOA remains the cornerstone of Africa-U.S. preferential market access, and the legislation accounts for virtually all of Sub-Saharan Africa’s non-MFN exports to the U.S. Through AGOA, beneficiary countries only still face approximately 300 residual tariff lines that are not duty-free on entry into the U.S. In order to qualify for preferences, (a) a country must be a current AGOA beneficiary, (b) the product must be eligible for AGOA preferences as per the relevant special program indicator in the U.S. tariff book, and (c) products must originate in AGOA beneficiary countries in accordance to the rules of origin. 

1. Trade developments

Aggregate exports to the U.S. from the group of AGOA beneficiaries collectively increased by 49% during the year 2021, according to full year data released by the U.S. trade commission a few days ago. Exports were valued at over $27.4 billion, compared to $18.4 billion in 2020. 2021 exports to the U.S. from this group of countries were also at their highest since 2013. 

While energy-related exports (e.g. oil) continue to be an important export category, these tariff lines do not dominate overall export numbers to the extent that they have in some prior years. (Only) one fifth of AGOA countries’ aggregate exports to the U.S. comprised oil and gas during 2021. A range of manufactured goods and processed mineral products account for the bulk of exports, including refined non-ferrous metals, iron and steel goods, automotives and parts, textiles, agricultural exports as well as a range of other industrial goods account for the bulk of AGOA countries’ U.S.-bound exports in 2021. 

South Africa continues to be the leading SSA-based exporter to the U.S. in terms of AGOA preference utilisation (+43% year on year increase over 2020), along with having the most diversified export range. This is followed by Nigeria (+176% YOY), Kenya (18% YOY), Ghana (+138%), Angola (+108% YOY), Lesotho (+14% YOY), Madagascar (+41% YOY) and Ethiopia (+13% YOY).

Of the leading 20 exporters (by country) to the U.S.,19 increased their overall U.S. exports during 2021, compared to the previous year. 14 of the 20 countries also increased their exports under AGOA preference, some by a greater share relative to their increase in overall exports (e.g. South Africa: +37% overall, +43% AGOA, Madagascar + 11% overall, + 41% AGOA, Lesotho +9% overall, +14% AGOA, Zambia + 230% overall, +1400% AGOA). 

South Africa has seen a strong increase in year-on-year AGOA exports of motor vehicles (+44% to $819m, +126% since 2019), articles of jewelry (+82% to $418m, +198% since 2019), ferroalloys (+52% to $400m), fruit and nuts (+6% to 173m) and beverages and spirits (18% to $74m, +29% since 2019). South African exports utilising AGOA have grown to $2.7 billion in 2021. While South Africa’s AGOA-eligible exports were higher than in the three previous years, they were still well short of the value recorded during the period 2008 and 2014. 

2. Political developments (Country eligibility changes)

The AGOA legislation includes a number of eligibility criteria and standards against which the U.S. President makes an annual determination on continued AGOA eligibility. Early October 2021, following ongoing engagement between the U.S. and the countries concerned, the U.S. President notified Congress about his intention to suspend the AGOA beneficiary status of Ethiopia, Guinea and Mali, for failing to address U.S. concerns around their continued compliance with the AGOA eligibility criteria. 

The reasons provided by the U.S. varied: In the case of Ethiopia, for ‘gross violations of internationally recognized human rights’; Guinea, for ‘not having established, or not making continual progress toward establishing, the protection of the rule of law and of political pluralism’; and Mali for ‘not having established, or not making continual progress toward establishing, the protection of the rule of law, political pluralism, and internationally recognized worker rights, and for not addressing gross violations of internationally recognized human rights’. 

While all three countries recorded significant exports to the U.S. the impact on Ethiopia is likely to be the largest as it had become a leading exporter under AGOA preference with more than 50% of its exports in each of the past 3 years utilising AGOA on entry into the U.S., and entire export-focused industries (such as textiles, leather goods) largely depending on AGOA preferences. 

Other preferential access to the U.S. also remains unavailable currently: the U.S. GSP expired (it was not re-authorised by the US Congress) at the start of 2021 and still remains unavailable as of February 2022 (this means that a country’s immediate fallback of losing AGOA preferences – continued preferential market access for up to three quarters of AGOA’s product coverage – is also moot for now).