South Africa should prepare for the possibility of losing preferential access to the United States market under the African Growth and Opportunity Act, President Cyril Ramaphosa has said.
Ramaphosa also urged the country to look for alternative markets to reduce the potential impact of exclusion from the trade programme. He described the possible consequences as “devastating” but cautioned South Africans against panicking.
AGOA extension awaits signature
AGOA allows eligible African countries to export certain goods to the United States without paying duties. Congress has renewed the programme through the end of 2028, but the extension is still awaiting the signature of US President Donald Trump.
South Africa is AGOA’s largest beneficiary. However, the country’s eligibility has come under scrutiny in Washington. It is not yet clear whether Trump has signed the extension or whether South Africa will ultimately be excluded from the programme.
Any exclusion that takes effect on January 1 would need to be announced by November 2, according to the reported timeline.
Automotive industry faces major exposure
The South African automotive industry is particularly exposed because vehicles made in the country benefit from duty-free access to the United States under AGOA.
Industry estimates cited in the report indicate that around 86,000 jobs at South African car manufacturers are directly linked to the trade agreement. The figure rises to 125,000 when subcontractors are included.
The estimates have not been independently verified in the available information, and the organisations that produced them were not identified.
Ramaphosa’s call focuses on preparing for a possible loss of access rather than confirming that exclusion will occur. The president has not specified which alternative markets South Africa is considering.
The uncertainty comes as South Africa weighs the implications of Washington’s scrutiny and the pending decision on the AGOA extension. For the country’s exporters, the programme remains an important route into the United States market, particularly for the automotive sector.
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