Two U.S. Senators, one Republican and one Democrat, have introduced the African Growth and Opportunity Act (AGOA) Renewal and Improvement Act of 2024. This legislation aims to renew AGOA, with several key changes designed to enhance its effectiveness and impact. There is still room for improvement.

Key updates in the new bill and a few comments

Extension: The bill proposes to extend AGOA until 2041. Previously renewed in 2008 and 2015, AGOA was set to expire in 2025. This proposed extension is longer than previous renewals and provides much-needed continuity and certainty for businesses and countries.

Review, Enforcement, & Reporting: The frequency of country reviews is set to decrease from annually to biennially, addressing some of the uncertainties associated with regular reviews. However, the bill maintains the President’s authority to conduct an out-of-cycle review of any country at any time and extends this authority to Congress.

Rules of Origin, Regional Integration, and AfCFTA: The bill modifies the rules of origin to allow sourcing from North African AfCFTA members to count toward the requirement that 35% of a product’s value originates in the region. It also eliminates the need for textile visas, significantly reducing certification and monitoring costs. Instead, U.S. Customs and Border Protection (CBP) will send verification teams to at least four AGOA beneficiaries each year to ensure compliance.

Income-Based Graduation: Countries can retain their eligibility for five years after achieving high-income status. This provision is particularly important for the few upper middle-income countries in Sub-Saharan Africa.

Looking Ahead

While the bill represents significant progress and could potentially boost trade and development in countries with higher utilization rates, there are areas that still require attention. For instance, the bill’s support for integration and AfCFTA could be more robust. Currently, 17 countries are not eligible for the program (See eligibility table below) , many of whom have lost eligibility more recently. This selective preference could limit integration and the development of regional value chains. If the goal is to support integration, the preference should be based on subregions without discrimination.

The bill’s emphasis on supporting AGOA utilization through technical capacity building and shifting some enforcement requirements towards Sub-Saharan Africa could enhance capabilities and further promote its utilization and development of industries in the region. This by itself, however is a significant positive development for businesses and countries who has been unsure about the future of AGOA. Of course, it still has to pass through congress to become a law.

Further Reading

For those interested in learning more about AGOA, the following works offer in-depth analysis and perspectives on AGOA and its impacts; the first three by me and colleagues at the World Bank, the last and most recent one by Justin Sandefur and Arvind Subramanian from the Center for Global Development (CGD)) (click links to open):

• Uncertainty in Preferential Trade Agreements: Impact of AGOA Suspensions on Exports
• Africa in the New Trade Environment: Market Access in Troubled Times
• Are trade preferences a Panacea? export impact of the African growth and Opportunity Act
• Long-Distance Industrial Policy for Africa

Here is a link to access the bill: AGOA Renewal and Improvement Act of 2024

The table below provides a list of AGOA eligible and non-eligible countries in 2024.

Table 1. AGOA Eligibility, 2024
Eligible Countries		Non-eligible countries
1	Angola	1	Burundi
2	Benin	2	Burkina Faso
3	Botswana	3	Cameroon
4	Cabo Verde	4	Central African Republic
5	Chad	5	Equatorial Guinea**
6	Comoros	6	Eritrea
7	Rep. of the Congo	7	Ethiopia
8	Dem. Rep. of Congo	8	Gabon
9	Cote d’Ivoire	9	Guinea
10	Djibouti	10	Mali
11	Eswatini	11	Niger
12	The Gambia	12	Seychelles**
13	Ghana	13	Somalia ***
14	Guinea-Bissau	14	South Sudan
15	Kenya	15	Sudan*
16	Lesotho	16	Uganda
17	Liberia	17	Zimbabwe
18	Madagascar
19	Malawi
20	Mauritania
21	Mauritius
22	Mozambique
23	Namibia
24	Nigeria
25	Rwanda+
26	Sao Tome & Principe
27	Senegal
28	Sierra Leone
29	South Africa
30	Tanzania
31	Togo
32	Zambia

⁺ AGOA apparel benefits suspended by POTUS effective July 31, 2018. *Sudan has not requested designation as AGOA beneficiary country.** Equatorial Guinea and Seychelles graduated from GSP and AGOA. *** Somalia first expressed interest in consideration for AGOA eligibility in 2023.