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Effective January 1, 2027, South Africa will no longer benefit from the African Growth and Opportunity Act (Agoa). This decision was announced on November 2 by the United States, citing concerns over trade and investment barriers, corruption, and US national security. Rwanda, like South Africa, will lose its preferential access two years earlier than expected.

While economists note that Agoa's direct impact on South Africa's economic growth is expected to be minimal, potentially less than 1% of total exports, the real concern lies in the broader implications for investor confidence and the bilateral relationship with the US.

Chief Economist Johann Els from PSG Financial Services explained that while Agoa's contribution is limited, the loss could send a negative signal to investors and affect confidence, investment, and relations with the US. The Bureau for Economic Research's Lisette IJssel de Schepper pointed out that South African exporters can continue selling their products to American customers, but those benefiting from Agoa may face higher import duties.

While Agoa does not remove existing tariffs on certain sectors, it could eliminate the most-favored-nation (MFN) duty, which is a significant advantage.

The US currently accounts for about 7% of South Africa's merchandise exports. However, the impact varies across industries. Automotive manufacturing, once a major beneficiary of Agoa, has seen much of its advantage diminished by additional US tariffs. Agriculture, valued at approximately $504 million in 2025, shows resilience despite tariff uncertainties.

While this sector's ability to absorb further shocks depends on diversification and securing better trading conditions, individual exporters may face substantial consequences.

De Schepper emphasized that while South Africa can diversify its export markets, this is neither an immediate solution nor a reason to abandon established relationships. While China and India are major buyers of South African commodities, the US remains a crucial market for specific manufactured and agricultural products. The loss of Agoa may have varying effects on different industries and communities, with potential impacts on employment and domestic economic activity.

The real concern is not just the extent of the export revenue loss but its distribution and the resulting impact on various sectors and people. The direct tariff shock from Agoa's exclusion is expected to be smaller than other recent US trade measures, but the overall economic impact and individual consequences could still be significant.