12 Apr 2025

The expiration of the African Growth Opportunity Act (AGOA) in September, coupled with the United States' recent announcement of a 37 per cent tariff hike present a complex landscape for African nations, particularly in the context of intra-African trade.

As highlighted in an interview recently, Botswana Manufacturers Export Association (BEMA) CEO, Ms Mmantlha Sankoloba said Botswana did not enjoy any significant benefits from AGOA, suggesting that local businesses might be less affected by the changes.

Ms Sankoloba underscored that the scenario offered an opportunity for African countries to enhance the trade relationships within the continent.

By strengthening regional value chains, she said African nations could bolster economic development and move toward a more integrated market.

This situation emphasises the importance of fully implementing the African Continental Free Trade Area, which aims to support free trade across member states and create a single continental market for goods and services, she said.

Moreover, Ms Sankoloba points to the necessity for African countries to diversify trade relationships, looking beyond traditional markets, particularly the US.

She identified BRICS nations, Brazil, Russia, India, China and South Africa as significant alternative markets for African exports, with China being particularly promising in this regard.

This shift from AGOA could thus serve as a catalyst for redefining and expanding trade partnerships on the continent and globally, she said.

Meanwhile, Botswana Investment and Trade Centre - Export Promotions and Development executive director, Mr Temo Ntapu highlighted the importance of diplomatic efforts at both bilateral and Southern African Customs Union (SACU) levels, to develop effective remedial measures.
He cautioned that while other nations might quickly eliminate tariffs on US products, a strategic approach was essential as such moves might not guarantee reciprocal actions from the US.

Mr Ntapu emphasised the need to incorporate service trade in negotiations with the US, which could present a favourable trade balance for Botswana and counterbalance US methodologies.

He advocated for the necessity of diversifying into new markets to mitigate current and future risks and suggested that Botswana and SACU should consider a reciprocal AGOA trade agreement that benefited both African nations and the US.

Mr Ntapu also noted the importance of analysing and addressing non-tariff barriers raised by the US to ensure smoother trade relations.

In context, while the expiration of AGOA and the accompanying tariff hikes pose challenges, they also provide an opportunity for African nations to reconfigure their trading landscape, fostering greater intra-African trade and exploring new global partnerships. Ends