Uncertainty over AGOA puts African apparel exports at risk

Lesotho’s economy is heavily reliant on its textile (& apparel) industry, which was largely built through AGOA incentives. The sector is the nation’s largest private employer, providing around 40,000 jobs—most held by women—and accounts for approximately 90 per cent of its manufacturing exports, according to Oxford Economics. Garments produced in Lesotho, including those for brands like Levi’s and Wrangler, represent a significant portion of exports to the US and contribute nearly 10 per cent to the country’s GDP of just $2 billion.

Last Thursday (July 10), Lesotho declared a national state of disaster following a sharp rise in youth unemployment and factory layoffs directly linked to the new tariffs. Factory owners such as Kobeli, which has already let go of 200 workers producing for the US market, warn of even more severe impacts if the trade restrictions continue.

With AGOA set to expire on September 15 this year, concerns are deepening across sub-Saharan Africa (SSA), particularly among textile and apparel producers who depend on duty-free access to the US.

Cornerstone of US-Africa trade

Enacted in 2000, AGOA is a non-reciprocal trade preference programme that allows eligible SSA countries to export over 1,800 product categories to the US market without incurring duties. While the programme spans various sectors—including agricultural goods, vehicles, base metals, and processed foods—the textile and apparel industry has been its most visible success story.

This is largely due to the third-country fabric provision, which enables African manufacturers to import raw materials (such as Chinese fabrics) and still qualify for AGOA’s duty-free status. This has been especially crucial for smaller, lower-income countries without strong upstream textile industries.

As of 2025, 32 African nations are AGOA-eligible, and many have built export industries around the benefits provided by the agreement.

Towards self reliance

Experts and policymakers across the continent meanwhile argue that African nations must stop relying solely on external preference schemes like AGOA.

The African Continental Free Trade Area (AfCFTA) has a framework to transform the continent’s trade landscape by reducing internal trade barriers and integrating African economies.

If effectively implemented, the World Bank projects it could boost intra-African trade by 81 per cent and lift 30 million people out of extreme poverty by 2025.

At the same time, many countries are preparing to diversify their trade relationships, deepening ties with China, India, the EU, and Gulf States while ramping up engagement with the Global South.

The AGOA programme has been instrumental in creating jobs, diversifying economies, and nurturing US-Africa economic ties. But the Trump administration’s aggressive trade policies—combined with reduced USAID funding and a broader inward turn—risk unravelling these hard-won gains.

If AGOA is not renewed or is replaced with a watered-down version, African countries will likely pivot towards regional integration, new global alliances and greater economic self-reliance.

While this could accelerate long-term reforms and diversification, the short-term costs will be high—in terms of jobs, revenue and stability.

ALCHEMPro News Desk (CG)