AGOA Extension Offers 1-year Reprieve, Structural Reforms Crucial – Pan African Manufacturers

The Pan African Manufacturers Association (PAMA) has described the one-year extension of the African Growth and Opportunity Act (AGOA) as a critical but limited reprieve.

In its monthly report on Sunday in Lagos, its president, Mansur Ahmed, has urged African governments and manufacturers to use the window to reposition the continent for sustainable industrial growth and global competitiveness.

The president of the United States of America, Donald Trump, had on Feb. 3 signed a law extending the U.S. trade programme to Dec. 31, following its lapse in September 2025.

The U.S. trade preference programme grants eligible African countries duty-free access to more than 1,800 product lines.

Ahmed noted that while the extension through Dec. 31, stabilised near-term trade flows, it fell short of providing the predictability required for capital-intensive industrial investments.

According to him, the extension is a temporary stabiliser, not a strategic solution.

He said the short planning horizon created by one-year renewals discouraged long-term investment and weakened Africa’s competitiveness relative to other regions with more predictable trade arrangements.

“Over-reliance on trade preferences without deeper industrial upgrading remains a structural vulnerability,” he said.

Ahmed said the extension preserved duty-free access for critical product lines, including textiles and apparel, agro-processing, light manufacturing and intermediate goods.

He added that it prevented immediate disruption to Africa–U.S. trade relations.

He, however, stressed that 2026 should be treated as a decisive transition year for shaping a more durable “AGOA 2.0”.

According to him, the framework should be anchored on value-added manufacturing, skills development, technology transfer and stronger standards compliance.

Citing global trade trends, Ahmed said developing economies increasingly drove global goods trade growth in 2025, supported by expanding South–South trade, even as U.S. import demand softened.

He referenced World Bank Group reports showing notable economic growth across several African economies in 2025, including Nigeria at 4.2 per cent as evidence of the continent’s resilience amid global uncertainty.

“Nonetheless, Africa’s manufacturing base remains largely concentrated in low-value, low-productivity activities, with limited integration into higher segments of global and regional value chains, ” he said.

Ahmed said the tariff disruptions experienced in 2025 underscored how quickly preference-dependent trade models could be exposed to external policy shifts.

He called for alignment between AGOA and the African Continental Free Trade Area (AfCFTA) to use the U.S. market as a platform for scaling regional value chains rather than fragmenting them.

The PAMA president urged African governments and manufacturers to collectively advocate a multi-year AGOA renewal that matched industrial investment cycles.

He said Africa must pursue reforms that reward local value addition and support small and medium-scale manufacturers with export finance and compliance infrastructure.

He also emphasised the need to diversify export destinations, improve infrastructure and energy reliability, harmonise standards and customs procedures under AfCFTA.

Ahmed called for the implementation of targeted industrial policies to crowd in private investment into export-oriented manufacturing value chains.

He advised manufacturers to prioritise productivity, cost efficiency and quality upgrading through selective automation, adoption of international certifications and participation in regional industrial clusters.

He maintained that the AGOA extension represented strategic time gained rather than strategic success secured, warning that intensifying global competition, rising compliance requirements and higher logistics costs would shape Africa’s trade environment in 2026 and beyond.

According to him, African manufacturing leadership must use the one-year reprieve to shift from dependence on preferential access toward building competitive, resilient and globally integrated industrial systems.