U.S. Election Results Poised to Impact South Africa’s AGOA Trade Benefits and Economic Future. Image: Daily Maverick
(The Post News)– As the United States approaches its presidential elections, South Africa is closely following a contest that might have far-reaching consequences for the country’s economy, which is heavily reliant on the special trade terms offered under the African Growth and Opportunity Act (AGOA). AGOA, a U.S. trade program, grants duty-free market access to African countries, including South Africa, and the election results depend on whether Donald Trump or Kamala Harris secures the presidency, as both candidates have different approaches to trade agreements.
The chief economist at Investec, Annabel Bishop, cautioned that a win for Trump could endanger AGOA due to his focus on “America First” policies, potentially disrupting trade flows and jobs, IOL News reported. Benguela Global Fund Managers’ Chief Investment Officer, Zwelakhe Mguni, shared with the SABC that the primary concern is not any specific policy of Donald Trump or Kamala Harris, but rather the potential for a repetition of the controversial 2020 election. He claims that a Kamala Harris government will most likely carry on Biden’s policies.
With the current term of AGOA set to expire in 2025, companies in South Africa that rely on the jobs created by AGOA may benefit from stability if a Harris-led administration were to extend it with similar or better terms, allowing South African businesses to thrive in the US market. In September 2024, President Ramaphosa underscored the importance of the United States as the second largest destination for South Africa’s exports at the SA-US Interactive Business Forum. He mentioned that bilateral trade had totaled USD 17.6 billion. Between 2019 and 2023, total exports to the US accounted for 8% of all South African exports, while under AGOA and GSP, it accounted for 25% of global exports.
As election results draw near, South Africa is left to ponder its economic future under the new U.S. administration. As the world watches the U.S. electoral outcome, AGOA’s future—and its profound impact on South Africa’s economy—awaits a crucial decision from American voters.
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