For over 2 decades, African exporters have enjoyed preferential access to the U.S market through the African Growth and Opportunity Act (AGOA). From cocoa in Ghana, to textiles from Lesotho and flowers from Kenya, African countries have had the opportunity to compete at the global level without the burden of tariffs. This major economic lifeline increased trade and investment in more than 30 eligible countries, leading to job creation and accelerated growth.

As of September 2025, AGOA has expired despite broad bipartisan support for its renewal. This marks the end of an era and the start of a new chapter for African businesses, pending the U.S. government’s decision on renewal. The question should no longer be about whether AGOA will be renewed but about how African SMEs can thrive without it. 

Why AGOA Mattered

AGOA didn’t solve all of Africa’s economic challenges, but it provided a comparative advantage for African countries, including 

Preferential Market Access: More than 30 countries benefited from duty-free access to the U.S market, boosting exports of agricultural products, textiles and light manufacturing. 

Boosting SME Growth: Reduced trade barriers enabled SME’s to compete at the global level, creating opportunities and boosting their growth. 

Increased Investment: African countries attracted investment into industries such as apparel and agro-processing. 

For many SMEs, AGOA provided a platform to put their products on shelves across the United States. 

The Post AGOA Reality 

With the end of AGOA, the benefits of which were diluted by recent U.S tariff impositions, African exporters will be exposed to the Most Favoured Nation tariffs, which range from 10 to 30% for many of the previously covered products. This brings some difficulties, such as:

Reduced Competitiveness: African products will be less competitive globally compared to those of Asian countries, primarily due to higher production and logistics costs. 

Supply Chain Realignment: U.S buyers may reconsider their sourcing strategies and pivot sourcing to other regions. 

Revenue Erosion: SMEs operating on thin margins will face increased financial pressure and reduced profitability. 

Additionally, U.S trade policies are gradually tilting towards sustainability, governance and ESG compliance, raising the requirements for market access. 

How African SME’s Can Adapt and Thrive 

The end of AGOA does not mean the end of opportunities; it is a call for African businesses to innovate, diversify and strengthen resilience. SMEs can adapt and thrive by:

1.  Embracing Intra-African Trade under AfCFTA

SMEs can access a market of more than 1.3 billion people with a combined GDP of approximately $3.4 trillion through the African Continental Free Trade Area (AFCFTA). With reduced tariffs and harmonised trade rules, SMEs should prioritise regional supply chains and build a customer base in Africa. 

2. Target Market Diversification 

Market diversification will be essential for survival. Regions such as the Middle East and Asia are expanding trade relations with Africa. SMEs should explore new export markets and reduce reliance on the U.S. 

3. Invest Value Addition

Instead of exporting agricultural products in their raw form, SMEs should consider adding value through further processing into semi-finished or finished products. This will enable businesses to attract higher prices and be less vulnerable to tariff changes. 

4. Pursue Compliance with Global Standards

The global business environment is rapidly evolving. Supply chain sustainability and traceability are gaining momentum across several regions and industries. Compliance with ESG benchmarks and a demonstration of ethical practices are no longer optional but a requirement for access into high-value markets. 

5. Use Digital Trade and Logistics

Digital platforms like Kobo360 and Flutterwave enable SMEs to reduce costs and access cross-border customers more efficiently. Investing in digital trade infrastructure can fast-track access into untapped markets and offset the loss of preferential tariffs. 

Conclusion: Beyond AGOA

The end of AGOA is a turning point for innovative and resilient SMEs. While it marks the end of an era for African-U.S. trade relations, the deeper truth remains: preferential trade is not the foundation of long-term competitiveness. For SMEs in Africa, the path forward lies in regional integration through AfCFTA, value addition across industries and strategic diversification of markets and capabilities. 

Businesses that adapt now will not only survive the post-AGOA era, but they will also lead Africa’s next phase of economic growth.    

_{Featured image source: vecteezy.com}