Trade preferences are not industrial policy. They are a precondition for industrial policy. This distinction matters more than it might initially appear, because the advocates of trade preference regimes have sometimes conflated access with outcome, treating the opening of a market as though it were equivalent to the building of a supply chain. AGOA’s architects were, on the whole, more careful than this. The Act was conceived as part of a broader approach to Africa’s development that included investment promotion, debt relief and governance support. But in practice, the preferential access mechanism attracted the most attention, because it was the most measurable, and measurement creates its own distortions. The question “did AGOA increase trade?” has a clean answer. The question “did AGOA transform production structures?” does not, and that harder question has received less attention than it deserves.
At the time of enactment, AGOA covered approximately 6,800 product lines and applied to countries meeting eligibility criteria related to governance, economic reform and regional peace. Thirty-two countries are currently eligible, according to USTR’s 2026 Annual Review of Country Eligibility. The design was explicitly conditional rather than automatic: countries could gain, retain or lose access depending on annual political and governance assessments. That conditionality, as will become apparent, is not incidental to AGOA’s mixed record. It is central to it.
The headline trade numbers are startling in both directions. AGOA imports to the United States reached a peak of $100.2 billion in 2008, according to USITC Interactive Tariff and Trade DataWeb. They stood at $9.6 billion in 2024. That is a decline of more than 90 per cent from peak, a collapse in trade volumes that, reported without context, would suggest a catastrophic failure of the preferential system. The context is crucial. The collapse had almost nothing to do with African export capacity and almost everything to do with American energy production.
AGOA’s headline numbers were, for most of its history, an energy story wearing development language. Oil and petroleum products accounted for the dominant share of AGOA imports at peak, exported primarily by Nigeria and Angola. When the United States shale revolution accelerated after 2010, American domestic oil production surged and US demand for imported crude from West Africa fell sharply. The tariff preference that had made Nigerian and Angolan oil competitive in US markets became largely irrelevant as American refineries oriented toward domestic supply. AGOA trade values fell not because Africa’s factories became less competitive but because America stopped needing Africa’s oil. The manufacturing story that AGOA was meant to tell was always being narrated alongside, and statistically obscured by, a much larger and more volatile petroleum story.
The top five AGOA beneficiaries by trade value in 2024 are South Africa at $3.6 billion, Nigeria at $3.1 billion, Kenya at $540 million, Ghana at $480 million and Angola at $420 million according to USITC and USTR data. Two countries, South Africa and Nigeria, account for more than $6.7 billion of $9.6 billion in total AGOA imports, roughly 70 per cent of the entire programme. And the two do not tell the same story. South Africa’s AGOA exports are predominantly automotive, reflecting the BMW, Mercedes-Benz and Toyota assembly operations in the Eastern Cape that produce vehicles for the North American market and have done so with sufficient quality and reliability to compete in a demanding market. This is a genuine manufacturing success. Nigeria’s $3.1 billion is still overwhelmingly petroleum.
What the top-five data reveals is that AGOA’s overall trade profile is structurally bifurcated. At the top end, South Africa’s industrial base is sophisticated enough to integrate into global automotive supply chains, and has done so. At the oil-export end, Nigeria and Angola use AGOA as a petroleum preference regime. In the middle, a group of smaller economies, Kenya, Ghana, and others, export agricultural goods, light manufactures and, in Kenya’s case, substantial quantities of apparel. The development story that AGOA was designed to tell is being told most clearly in that middle tier, but the middle tier is not what drives the headline numbers. And the smallest, most dependent beneficiaries, like Lesotho, are the ones most exposed to the regime’s inherent fragility.
Within AGOA’s manufacturing dimension, the apparel sector is the clearest example of both what preferential access can achieve and what it cannot. Kenya exported $540 million in goods under AGOA in 2024, of which $495 million, approximately 92 per cent, was apparel and textiles, according to KNBS and OTEXA data. Lesotho, a landlocked country of approximately two million people almost entirely surrounded by South Africa, exported $242 million under AGOA in 2024, with direct employment of approximately 34,000 workers in the apparel sector according to OTEXA and the Lesotho National Development Corporation. For Lesotho, AGOA is not an element of trade strategy. It is the trade strategy. The apparel sector constitutes the dominant formal manufacturing employer in the country.
The achievements are real. Export-processing zones in Maseru and other urban centres brought factory jobs, foreign direct investment and wage income to an economy that had few alternatives. For young women especially, the garment factories represented access to formal employment that had not previously existed at scale. But the structural critique is also real. Fabrics and intermediate inputs for Lesotho’s garment factories are predominantly sourced from Asia. The production is final-stage assembly: cutting, sewing and finishing. Value capture at the upstream end of the supply chain, in textile weaving, fabric production and yarn spinning, occurs elsewhere. The domestic supplier ecosystem that would give Lesotho genuine industrial depth has not developed. Tariff preference attracted investment. It did not create the supply chain conditions that would have made that investment self-sustaining if the preference disappeared.
“Lesotho’s 34,000 apparel workers represent AGOA’s most honest manufacturing outcome: real jobs, real wages, real development impact. They also represent the programme’s most acute vulnerability. When the preference ends, the investment case for those factories ends with it. That is not a critique of the workers or their government. It is a diagnosis of what preference without industrial depth produces.”
Ethiopia’s AGOA story is the most instructive and the most painful in the programme’s twenty-five-year history. In the years before 2022, Ethiopia had become one of AGOA’s emerging industrial success cases. The country built a network of industrial parks, most notably the Hawassa Industrial Park in the Southern Nations region, which attracted garment manufacturers from East Asia and Europe drawn by low labour costs, government-subsidised facilities and AGOA’s duty-free access to the United States market. The parks were not merely factories. They were a development strategy: job creation, skills transfer, export diversification, foreign exchange generation.
On 1 January 2022, following findings of serious human rights violations connected to the Tigray conflict, USTR suspended Ethiopia from AGOA eligibility. Approximately 100,000 jobs in the industrial parks were affected according to ILO assessments. Manufacturers who had invested in Ethiopian production facilities on the basis of AGOA access faced the immediate unravelling of their business model. Some relocated operations to Kenya, Madagascar and other AGOA-eligible countries. Others exited Africa entirely, returning to Asian production bases that offered comparable labour costs without the political risk premium. Ethiopia’s AGOA suspension remained in place as of February 2026.
The Ethiopia case illustrates with precision the fundamental instability that conditionality introduces into long-term industrial investment. A garment factory is a commitment measured in decades: the infrastructure, the trained workforce, the supply chain relationships and the management systems do not amortise over one-year periods. AGOA, with its annual eligibility reviews and renewable legislative mandate, asks investors to make decade-horizon capital commitments against one-year political assurances. The AGOA Renewal and Improvement Act of 2024, which would extend the programme to 2041 and is currently in Congressional committee as of February 2026 with a one-year temporary extension in place, represents precisely the kind of durability that industrial investors require. Its prolonged journey through Congress is itself a signal of the political uncertainty that makes long-horizon factory investment in AGOA-eligible countries risky by design.
Understanding AGOA in 2026 requires understanding the trade environment in which it operates, and that environment has changed fundamentally since the Act’s enactment in 2000. China’s bilateral trade with Africa reached $282.1 billion in 2023 and approximately $295 billion in 2024 according to MOFCOM and General Administration of Customs data, representing roughly 20 per cent of Africa’s total merchandise trade according to UNCTAD. Total US goods trade with Sub-Saharan Africa was $46.8 billion in 2023, according to USTR and Census Bureau data, representing approximately 1.1 per cent of total US trade. The European Union’s trade with Africa reached $435 billion in 2023 according to Eurostat.
These numbers establish the competitive context in which AGOA operates. China trades with Africa at roughly six times the volume of the United States. The European Union, which retains its position as Africa’s largest trading partner by total volume, trades at more than nine times the US-SSA level. AGOA’s $9.6 billion, set against this backdrop, is not a marginal instrument in a US-led trade architecture. It is a modest instrument in a multipolar trade architecture where Chinese and European engagement dwarfs American commercial exposure to the continent. This is not an argument against AGOA. It is a necessary calibration of expectations. Preference regimes that represent a small fraction of a recipient region’s total trade cannot be the primary driver of industrial transformation, regardless of their design quality.
Chinese engagement in Africa has also introduced an alternative model of industrial development support that complicates the preference framework. Chinese-built industrial parks and special economic zones, financed through Belt and Road Initiative lending and built by Chinese construction firms, offer a form of upstream industrial infrastructure that tariff preferences do not. The model is not without its problems, including questions about debt sustainability, technology transfer, local employment intensity and the extent to which Chinese-funded infrastructure serves Chinese commercial interests rather than African developmental ones. But it addresses a constraint that AGOA does not: the infrastructure gap that makes preferential market access less valuable than it could be. An African manufacturer that lacks reliable electricity, efficient ports and logistics networks cannot fully exploit tariff preferences regardless of how generously they are designed.
The structural context in which AGOA operates is defined by a persistent and deepening manufacturing gap. Sub-Saharan Africa’s manufacturing sector contributes 10.5 per cent of GDP in 2024 according to World Bank WDI data, against 24 per cent for East Asia and the Pacific, 14 per cent for South Asia and 13 per cent for Latin America. Africa’s share of global manufacturing output is approximately 1.9 per cent according to UNIDO’s Industrial Development Report for 2024, a figure that understates Africa’s developmental challenge because it is set against a population that accounts for nearly a fifth of humanity and is growing rapidly.
Intra-African trade represents only 14.8 per cent of total SSA trade according to UNCTAD and AfCFTA data for 2024. This compares with an intra-EU trade share of approximately 60 per cent, an intra-USMCA share of around 40 per cent and an intra-ASEAN share of approximately 23 per cent. The low intra-regional trade share reflects not only tariff barriers but the broader infrastructure, logistics and regulatory fragmentation that makes cross-border commerce within Africa expensive relative to commerce with external partners. The infrastructure gap is substantial: AfDB’s African Economic Outlook 2024 estimates the annual infrastructure investment requirement at between $68 billion and $108 billion per year, against actual investment levels that fall well short of the lower bound.
Electricity access underlies many of these constraints. Approximately 50.6 per cent of Sub-Saharan Africa’s population has access to electricity according to IEA and World Bank data for 2024, meaning roughly 600 million people remain without access. Manufacturing competitiveness depends on reliable, affordable power. A garment factory that faces irregular electricity supply cannot meet the delivery schedules that export markets require. A battery precursor plant, a pharmaceutical manufacturer or a food processor is even more power-intensive. The infrastructure constraint is not incidental to Africa’s manufacturing gap. It is one of its primary causes.
Sub-Saharan Africa’s labour force stood at 485 million people in 2024 and is projected to reach 820 million by 2050 according to ILO and World Bank data. Between 11 million and 12 million people enter the SSA labour force annually, according to ILO’s World Employment and Social Outlook 2024. Africa’s total population is projected to reach 2.49 billion by 2050 according to UN DESA World Population Prospects 2024. Youth unemployment stands at 12.9 per cent officially, but underemployment, the condition of working in jobs that fail to utilise skills or generate adequate income, is estimated by the ILO at more than 40 per cent. These numbers define the stakes of the industrial development question in a way that trade statistics alone do not.
The apparel sectors of Lesotho, Kenya and Madagascar, however valuable in their own terms, cannot absorb labour at the scale that demographic reality demands. Lesotho’s 34,000 apparel jobs are real and important for the people who hold them. They are not a template for continental employment strategy. The same is true of Kenya’s $495 million in apparel exports. What Africa requires, if its demographic transition is to produce a dividend rather than a crisis, is the kind of broad-based, multi-sector manufacturing expansion that the East Asian economies achieved in the 1970s and 1980s: labour-intensive, export-oriented, progressively upgrading in value-added content as skills, infrastructure and supply chain depth develop. That expansion cannot be delivered by a single preferential access arrangement with a single market.
The African Continental Free Trade Area offers a different theory of industrial development, and one that addresses some of AGOA’s structural limitations directly. By reducing tariffs and, eventually, non-tariff barriers on intra-African trade, AfCFTA creates the possibility of a continental market of over a billion consumers that African manufacturers can serve without dependence on preferential access to external markets. The World Bank’s 2020 assessment, which remains the most comprehensive available, estimates that full AfCFTA implementation could generate a $450 billion increase in African GDP, a 7 per cent gain, and lift 30 million people from extreme poverty by 2035.
The political commitment is substantial. Fifty-four African Union member states have signed the agreement and 47 have ratified it, according to the AfCFTA Secretariat’s 2024 data. The gap between signature and economic transformation is, however, wide. Current intra-African trade at 14.8 per cent of total trade compares with 23 per cent for ASEAN, 40 per cent for USMCA and 60 per cent for the EU. Closing that gap requires not only tariff reduction but the development of the payment systems, customs harmonisation, regulatory convergence and, fundamentally, the transport and logistics infrastructure that makes cross-border commerce economically viable. A manufacturer in Dakar selling to a buyer in Nairobi faces port delays, irregular cross-border logistics and currency conversion costs that can negate tariff preferences entirely.
AfCFTA and AGOA are not in competition. They address different dimensions of the industrial development challenge. AGOA provides access to the world’s largest consumer market with the deepest purchasing power. AfCFTA provides the scale of regional demand that allows African producers to develop competitive supply chains before facing full global competition. The two are complementary instruments for an industrial strategy that needs both external market access and internal market depth. The mistake would be to treat either as sufficient on its own.
AGOA is scheduled to expire on 30 September 2025. The AGOA Renewal and Improvement Act of 2024, which would extend the programme to 2041 and incorporate modifications to the preferential structure, was in Congressional committee as of February 2026. A one-year temporary extension is in place. The uncertainty itself is an argument for renewal: every month that the legislative future of AGOA remains unresolved is a month in which investment decisions for AGOA-eligible production are deferred or redirected.
The renewal debate is also an opportunity to address AGOA’s structural limitations directly. Several reforms have been discussed that would make the preference regime more conducive to genuine industrial development. Longer-term durability would reduce the political risk premium that investors currently build into AGOA-dependent business models. Graduated conditionality, that distinguishes between democratic backsliding and isolated governance failures rather than applying binary suspension, would reduce the risk of the Ethiopia-scale disruption that wipes out industrial investment built over a decade. Expanded product coverage in areas such as digital services, business process outsourcing and higher-value manufactured goods would align the preference regime with the sectors where African economies have comparative advantages that extend beyond low-wage assembly. Complementary capacity-building, skills development, infrastructure co-financing and regulatory support, would address the upstream constraints that limit how much value African producers can extract from market access.
AGOA opened a door. That is worth acknowledging. For Lesotho’s 34,000 garment workers, for Kenya’s apparel exporters, for South Africa’s automotive sector, the preferential access to the United States market created real economic value that would not otherwise have existed. The programme’s defenders are right that trade preferences, at their best, create the conditions for industrial investment that domestic policy alone cannot generate. The numbers in apparel, however modest in aggregate, represent livelihoods that are real and mattered to the people who earned them.
The critique is not of the principle but of the scale, the design and the sequencing. A preference regime that delivered $100.2 billion in peak trade and $9.6 billion in its twenty-fifth year, predominantly in petroleum and automotive products from two countries, with apparel employment in single-digit percentages of the populations it was designed to serve, has not delivered structural industrial transformation. AGOA’s architects did not fail to envision the goal. They failed to design the conditions under which the goal was achievable. Tariff preference without infrastructure, without supply chain development, without long-horizon durability and without the institutional capacity to manage conditionality's side effects is a necessary but radically insufficient instrument.
Africa’s industrial future, if it arrives, will be built on electricity grids that work, ports that clear containers in days rather than weeks, domestic financial systems that lend to manufacturers at rates that make investment viable and regional supply chains dense enough to capture value upstream as well as downstream. It will also require access to external markets, and preferential access will remain valuable until African producers are competitive without it. But the sequencing matters. AGOA without the foundations is a market access scheme. AGOA with the foundations is a development catalyst. The difference is domestic policy, institutional capacity and infrastructure investment. Trade preference can open the door. The room beyond the door has to be built from inside.
AGOA’s trade peak of $100.2 billion in 2008 and its 2024 value of $9.6 billion are separated not by African failure but by the American shale revolution. The collapse demonstrates that a preferential access regime built predominantly on petroleum exports is exposed to energy market transitions entirely outside African control. Oil still constitutes 42 per cent of AGOA imports in 2024. Apparel and textiles, the sectors most directly relevant to Africa’s manufacturing development objectives, account for 13.5 per cent, or $1.3 billion. Lesotho’s 34,000 apparel jobs and Kenya’s $495 million in garment exports are the genuine industrial story of the programme. They are also the story’s scale problem: Sub-Saharan Africa’s labour force is 485 million today, growing to 820 million by 2050, adding 11 to 12 million workers annually.
Ethiopia demonstrates what conditionality costs when it is activated at scale. One hundred thousand industrial park jobs were lost following AGOA suspension on 1 January 2022 and remained lost as of February 2026. The programme’s legislative future adds a further layer of uncertainty: the extension-to-2041 bill remains in Congressional committee while a one-year temporary extension holds the framework in place. Industrial investment requires decade-horizon confidence. One-year extensions are not sufficient to build factories on. The African Continental Free Trade Area, with 54 signatories, 47 ratifications and a World Bank-estimated GDP potential of $450 billion by 2035, represents the complementary architecture that AGOA alone cannot provide. Current intra-African trade at 14.8 per cent of total trade compares with ASEAN’s 23 per cent and the EU’s 60 per cent. Africa’s $68 billion to $108 billion annual infrastructure gap and 50.6 per cent electricity access rate are the binding constraints that preference regimes cannot address by design.
AGOA’s defenders and its critics are both partially right. The programme has created real jobs, real export revenue and real industrial investment in a set of countries where those outcomes would not have materialised without it. It has not, in twenty-five years, transformed Africa’s share of global manufacturing output, which stands at approximately 1.9 per cent. The question for renewal is not whether to preserve preference but whether to design it as an industrial strategy rather than a market access concession. Longer durability. Graduated conditionality. Complementary infrastructure co-financing. Expanded sector coverage. Without those changes, AGOA’s next twenty-five years will produce the same mixture of genuine but limited gains in apparel and automotive, persistent exclusion of the majority, and vulnerability to political and energy market forces entirely beyond African control. Access opens the door. The continent has to build what lies beyond it. That building is a domestic task. But external partners can at least stop rearranging the doorframe every twelve months.