After 24 years, the African Growth and Opportunity Act (AGOA) which allows over 7,000 products to be exported to the U.S., duty-free, comes to an end after President Trump directly hit African countries with tariffs on American imports on Wednesday.
The U.S. protectionist measures will hit the African continent hard, especially countries that have benefited from AGOA, with goods from Lesotho attracting 50 percent tariffs, followed by Madagascar and Mauritius with 47 and 40 percent respectively.
South Africa, Botswana, Angola, Libya, Algeria and Côte d’Ivoire also face higher import tariffs. Nigerian exports will be hit too – at a rate of 14 percent.
Kenya, Ghana, Ethiopia, Tanzania, Uganda, Senegal and Liberia were among those countries whose exports to the US will be subject to the baseline tariff of 10 percent because the U.S. is not running a trade deficit with them.
In 2024, the U.S. Congress had put forward proposals that would see AGOA – a crucial lifeline for many African economies that offers opportunities to access the vast American market, extend till 2041.
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But Trump’s aim at countering what he sees as unfair trade practices inflicted on the United States by other countries has brought an end to the trade pact.
While Nigeria did not take full advantage of the African trade pact with the U.S. in the last 24 years, especially in non-oil exports, the country is still the continent’s major exporter of petroleum products to America.
“We didn’t benefit from AGOA because we are not competitive. It is not just to export at zero-duty but to compete favourably,” Segun Kadir-Ajayi, director general of the Manufacturers Association of Nigeria (MAN), said in February during the Presidential Luncheon for Media.
“We need to do a lot domestically to make our products competitive so we can compete favourably in those markets,” Ajayi added.
According to data from the National Bureau of Statistics (NBS), Nigeria exported N5.52 trillion worth of goods to the U.S. in 2024, while importing N4.44 trillion billion, leaving the U.S. with a trade deficit of N1.08 trillion.
Given Nigeria’s heavy dependency on crude oil exports, the country’s economy could be severely impacted.
There are concerns that Nigeria faces significant risks in addressing the uncertain economic situation, potentially worsening the country’s already fragile economic conditions if proactive policies and measures are not implemented.
Also, reduced imports of fossil fuels from Nigeria by the U.S. could lead to a decrease in crude oil revenues. At the same time, increased U.S. exports could create additional competition for Nigeria in global export markets, potentially undermining its competitive advantage, especially with the termination of AGOA.
