KEY TAKEAWAYS
KEY TAKEAWAYS
America’s security and global influence in this 21st century will be significantly impacted by the world’s fastest-growing and changing region: Africa. A bipartisan consensus among U.S. foreign policy leaders is pressing the United States to intensify its engagements across the continent to counter rising violence and instability that is often rooted in poor governance and unmet human needs. Yet next year, America risks losing a powerful, cost-effective tool for building U.S.-African partnership, peace and prosperity. Last week, a gathering at USIP of African and U.S. business and policy leaders sharpened and bolstered critical arguments for renewing and enhancing this vital instrument: the African Growth and Opportunity Act (AGOA).
AGOA is a 24-year-old U.S. program that promotes duty-free trade with African nations that protect fundamental human rights and the rule of law. It has generated hundreds of thousands of jobs (including in the United States) through private investment, making it an effective tool for alleviating poverty and promoting rule of law, which together can help African nations build democracy and peace. This investment-driven strategy opens a path, beyond traditional U.S. and international development assistance, toward those goals and Africa’s necessary greater inclusion in the global economy. Also, AGOA is central to America’s strategic goal of building mutually beneficial partnerships in Africa as China and Russia use their own methods to pursue influence and interests across the continent.
Congress created and has twice extended AGOA with broad, bipartisan majorities. But the program’s authorization expires in September 2025, and proposals to extend and amend the program are pending in Congress. Representatives of the businesses that serve as the program’s vital engine voice urgency that AGOA should be renewed quickly to avoid interrupting the gains it has achieved.
U.S and African business and policy leaders gathered at USIP in late July as part of the AGOA Forum, an annual meeting among African and U.S. officials that aims to bolster AGOA’s impact. The USIP gathering, focused on the private sector, was co-sponsored by the Corporate Council on Africa and the U.S. Department of Commerce. USIP’s acting president, former assistant secretary of state for Africa George Moose, underscored the importance of AGOA, noting that research by USIP and others “demonstrates conclusively that economic underdevelopment is one of the most potent drivers of violent conflict across the continent.”
But to avoid damaging the U.S.-African trade fueled by AGOA — and the associated jobs, economic growth and stabilizing influence for dozens of African countries — policymakers must formalize AGOA’s extension as soon as possible, said Melissa Nelson, general counsel for SanMar Corporation, a clothing company based near Seattle that has invested heavily under the program. For a company like SanMar, “the development of an apparel piece … is a year and a half,” she told the USIP gathering, “and you’re looking at this expiration in September 2025.” To avoid scuttling orders in Africa now under consideration, with the attendant job losses, “We need an urgent renewal, now, ideally for a long period of time,” Nelson said. A renewal should preserve current AGOA rules that offer sufficient flexibility on sourcing of materials for products being exported to the United States, she added. Other speakers echoed the urgency of an early congressional reauthorization of AGOA.
Secretary of State Antony Blinken underscored the U.S. administration’s focus on working with Congress to reauthorize AGOA as “a platform for building more just societies, helping reduce poverty, protect our planet [and] defend the rights of our workers.” Already, he told the USIP audience, the program has formed “a key pillar” of American and African joint efforts to “create jobs, uplift communities on both sides of the Atlantic, and build stronger connections between our people.”
Among the 32 African countries and wide range of economic sectors currently eligible for AGOA, some are more active than others. South Africa, Tanzania and Kenya are among countries actively participating in AGOA trade with the United States. South Africa accounted for more than 70% of the $5 billion in non-energy products sold to U.S. purchasers in 2023, primarily passenger cars and auto parts. Textiles, including clothing, account for approximately 22% of non-energy U.S. product imports from AGOA countries in 2023.
U.S. trade statistics show an encouraging increase in trade with sub-Saharan Africa by more than 20% from 2019 through 2023 with the textile and automotive industries contributing more to growth than others ($1.1 billion and $1.9 billion, respectively). A refrain during the 2024 AGOA Private Sector Forum was the heightened potential for growth in agriculture and other sectors, particularly if economic foundations, such as U.S. and other private investments in digital infrastructure and transportation, continue to be laid.
Years of academic research and recurrent news headlines show that economic development and responsive governance are the vital foundations for peace and stability across Africa. Even where African nations have achieved solid rates of economic growth, further acceleration is required because of Africa’s young and growing population, set to nearly double by 2050. Already, more than a quarter of African youth are in neither jobs, school, nor training. The challenge is heightened by the readiness of authoritarian powers, notably Russia, to exploit African conflicts and instability.
Recurrent news headlines show that economic development and responsive governance are the vital foundations for peace … across Africa.
A further challenge is China’s ability to fill the void that the United States would create by letting AGOA expire. At AGOA’s inception in 2000, U.S. commerce with Africa exceeded China’s — but by 2022, China had increased its Africa trade 20 times, out-competing both the United States and Britain. China’s aggressive Belt and Road Initiative and related activities have made it Africa’s largest trading partner, with double the foreign direct investment of the United States (as of 2020).
Fortunately, the United States is expanding commercial engagements in Africa, partly with initiatives announced at the U.S.-Africa Leaders Summit in December 2022, including on infrastructure. Congress is considering bipartisan legislation to reform and extend the mandate of the U.S. International Development Finance Corporation (DFC), doubling its lending authority. That step would expand U.S. companies’ capacity to offer partnerships with an aim to avoid the heavy debt burdens for Africans that are built into many of China’s projects. The DFC is backing the Lobito Corridor Project in Angola to encourage U.S. investment in African mining, challenging China’s dominance of critical minerals in much of Africa. Yet AGOA remains the backbone of U.S. commercial partnership with many African countries, and its expiration would stunt U.S.-Africa commercial momentum. That would certainly please China while disappointing, even alienating, many Africans.
AGOA participants and policy thinkers have discussed ways to improve or “go beyond” AGOA — a topic of the USIP gathering. Some have suggested adding provisions to advance labor and environmental standards. Others advocate making AGOA more reciprocal by increasing U.S. companies’ access to African markets. One path toward this would be to negotiate free trade agreements with African partners, but such agreements have received less congressional support in recent years. Other reforms in pending AGOA legislation include streamlining the AGOA review process. As policymakers weigh options, AGOA’s continuation will rely on maintaining the strong, bipartisan support that it has had since its beginning.
The U.S. government could improve AGOA’s effectiveness by reinforcing some basic tools. The DFC has few personnel in Africa and a stronger presence would allow it to more effectively help U.S. companies compete on the continent, its CEO, Scott Nathan, told Congress in May. A similar reality faces the State Department. A USIP senior expert group reported in April on how the United States can build partnerships in Africa focused on critical minerals — and noted that the United States needs more vibrant, well-resourced commercial diplomacy on behalf of U.S. companies.
A bottom line is this: Africa’s rising challenges, and its great abundance of economic and human resources, position it to become a globally powerful, 21st-century engine of growth and stabilization — or a continent plagued by violent upheaval. A vital determinant between those different possibilities will be the continent’s access to large-scale investment that is committed to bolstering democracy, transparency, rule of law and the inclusion of the marginalized. Against this challenge, AGOA and the investment-for-peace strategy that it underpins, are central to advancing U.S. peace and security goals in Africa.