Urgent Action Needed on the African Growth and Opportunity Act (AGOA)

Both supporters and critics of foreign assistance generally support trade. They recognize that, as in all other economies, companies in developing countries must find markets for the goods they produce.

Bread for the World emphasizes that, in addition to providing development assistance, the United States needs to institute and maintain policies that enable businesses in lower-income countries to compete fairly for customers in this country. One major reason is livelihoods—ways of earning a living or jobs. The world cannot end hunger in a lasting way if people are unable to provide food for themselves and their children.

A key policy that improves market access for low-income countries in Africa specifically is the African Growth and Opportunity Act, or AGOA. Managed through the Office of the U.S. Trade Representative, AGOA eliminates tariffs on some goods that African countries export to U.S. markets. It is one of the main ways Congress established to enable businesses in lower-income African countries to trade more of their goods with the U.S. But, without action from Congress, AGOA is set to expire on September 30, 2025.

It is difficult to compete as a small, perhaps recently established business in a lower-income country. The government may not be able to provide the support that businesses in high-income countries may take for granted, ranging from roads and ports to processing and storage facilities.

Moreover, many of the nations included in AGOA face unsustainable levels of external debt. Ghana, Zambia, and Malawi are in default, meaning that a country is unable to fulfill its financial obligations to lenders, and debt restructuring is required. Six other countries– Guinea Bissau, Sierra Leone, Kenya, Chad, the Democratic Republic of the Congo (DRC), and Mozambique—are at risk of debt distress.

When importing countries such as the United States impose tariffs on goods from lower-income countries, the goods become more expensive for consumers in those countries. This is why the elimination of tariffs imposed by the United States, as provided by AGOA, has helped many African farmers increase their exports to U.S. markets. In 2022, African farmers in participating countries exported a total of $2.9 billion worth of agricultural products to the U.S., more than three times as much as the $750 million in products exported in 2000, when AGOA was first passed into law. Participating African farmers were able to earn a living and create jobs based on exporting goods such as citrus, grapes, fruit juice, nuts, wine, dairy, and other foods. By contributing to higher farm revenues, AGOA in turn helps to increase the incomes of producer households.

AGOA’s success cases also include significant increases in exports of automobiles and auto parts from South Africa, processed foods from Mozambique, and garments and textiles from Kenya, Mauritius, and Lesotho. In 2023, the top exporters to the United States under AGOA were South Africa, Nigeria, Ghana, Angola, and Côte d’Ivoire.

AGOA was last reauthorized in 2015 for 10 years and will expire this September. Members of Congress, officials of African governments, and many leaders in business, advocacy, and academia have proposed improvements to AGOA.

Two of these suggested improvements are to expand the list of eligible countries to include some in North Africa and to increase the types of products that may be imported into the United States under AGOA. Other suggestions include identifying and eliminating additional barriers to participation in AGOA; better integration of AGOA into regional trade vehicles, such as the African Continental Free Trade Agreement (AfCFTA); and strengthening the technical skills and capacity of African exporters.

Congress should reauthorize AGOA so that this important legislation does not lapse. Renewing AGOA is a way for the U.S. to enable African countries to further develop their economies and reduce rates of hunger and malnutrition while prioritizing growth and market development. Now is the time to act on this.

Rick Rowden is a senior international policy advisor, Policy and Research Institute, with Bread for the World.