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By Lwazi Dlamini and Karabo Ngoepe
Eswatini’s inclusion in the African Growth and Opportunity Act (AGOA) has been renewed, allowing the country to continue benefiting from duty-free access to U.S. markets until 2025.
This milestone ensures the sustained growth of the country’s export trade and secures opportunities for 39 local companies actively participating in the program.
Retention Announcement
According to a statement issued by U.S. Trade Representative spokesman Sam Michel on December 21, the decision to retain Eswatini’s eligibility under AGOA followed an annual eligibility review. This review concluded that the list of participating and non-participating countries would remain unchanged for 2025.
ichel’s announcement confirmed that Eswatini’s compliance with AGOA’s requirements ensured its continued participation in this landmark trade initiative.
Eswatini, which has been a member of AGOA since its inception 23 years ago, exported goods worth $23.5 million (approximately E423 million) to the United States in 2022.
The country is one of over 30 African nations benefiting from AGOA’s trade provisions, alongside other regional players like Namibia, South Africa, and Mozambique.
A Diverse Export-Oriented Economy
Eswatini’s economy is heavily driven by export-oriented industries, which contribute 80% of the nation’s GDP. Dominated by agriculture and manufacturing, Eswatini has strategically leveraged its membership in regional trade blocs such as the Southern African Development Community (SADC), the Southern African Customs Union (SACU), and the Common Market for Eastern and Southern Africa (COMESA) to access larger markets.
Despite its small population of just over 1.3 million, Eswatini has positioned itself as a competitive player in global trade. Approximately 90% of the country’s imports come from or through South Africa, which also serves as the destination for 65% of Eswatini’s exports.
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Trade with the United States accounts for a smaller portion, with U.S. exports representing less than 1% of Eswatini’s imports and Eswatini’s exports to the U.S. accounting for 1.5% of total exports. The U.S. maintains a trade surplus with Eswatini of $7 million.
Commitment to AGOA Compliance
Eswatini government spokesperson Alpheous Nxumalo emphasized the country’s commitment to upholding AGOA’s requirements and maintaining strong diplomatic ties with the United States.
This commitment ensures the stability and predictability of trade relations between the two nations.
Business leaders like Sonia Paiva have highlighted the importance of international trade agreements for economic growth. Paiva stressed that participation in AGOA provides businesses with critical advantages such as duty-free market access and the removal of import tariffs.
She also cautioned against the economic risks of exclusion, particularly given Eswatini’s high unemployment rate, which disproportionately affects the youth.
“We cannot afford to be excluded from such agreements, as the country faces the highest unemployment rate to date, affecting over 50% of our population, mainly youth.
We urge our government to implement policies that protect export businesses and ensure compliance with trade agreements,” Paiva stated.
The Role of EIPA
The Eswatini Investment Promotion Authority (EIPA) welcomed the renewal of AGOA, praising the government’s efforts in creating a conducive environment for trade and investment. EIPA CEO Sibani Mngomezulu described the renewal as a critical achievement that would enhance Eswatini’s export potential.
“The retention of Eswatini under AGOA ensures that local businesses can continue to enjoy preferential trade terms when exporting to the U.S. market.
This lays the foundation for increased exports and aligns with EIPA’s mandate to attract, promote, and facilitate local and foreign investment and trade for economic development,” said Mngomezulu.
Key Export Sectors
In 2022, Eswatini’s exports under AGOA amounted to $23.5 million. The primary export categories include sugar, textiles and apparel, nuts and processed food, handcrafts, and cosmetics. These sectors play a pivotal role in driving economic growth and job creation.
Sugar remains the dominant export product, reflecting Eswatini’s agricultural strengths. The textile and apparel sector also stands out as a major beneficiary of AGOA, providing employment opportunities and contributing to the diversification of the country’s export base.
The Global Context
The renewal of Eswatini’s AGOA membership comes at a time of uncertainty in global trade. With Donald Trump set to return to the White House in January 2025, his administration’s approach to international trade agreements is under scrutiny.
Trump’s past rhetoric has signaled a preference for protectionist policies, raising questions about the future direction of AGOA.
Since its establishment in 2000 under the Bill Clinton administration, AGOA has played a transformative role in fostering economic relations between the United States and sub-Saharan Africa.
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The act provides duty-free access to U.S. markets for eligible African countries, covering 1,800 product categories, in addition to 5,000 other categories included under the U.S. Generalized System of Preferences.
Declining AGOA Exports
Despite its significance, AGOA-based exports have declined sharply from a peak of $66 billion in 2008 to $9.3 billion in 2023. This decline reflects broader challenges in global trade and shifts in U.S. trade policies.
During Trump’s first term, AGOA exports hit record lows, with total exports to the U.S. falling to $8 billion in 2019. Automotive exports were particularly hard-hit, dropping from $1.5 billion in 2016 to $344 million in 2019. However, under the Biden administration, AGOA exports rebounded, with automotive exports reaching $1.7 billion in 2023.
The Path Forward
As AGOA approaches its expiration date in September 2025, its renewal will require Congressional approval. While the act has historically enjoyed bipartisan support, its future remains uncertain.
Trump’s recent pledge to impose tariffs on imports from major trading partners, including BRICS nations, underscores his administration’s hardline approach to trade.
However, there is potential for AGOA to expand its scope, particularly in critical mineral trade. In 2020, Trump signed Executive Order 13817, emphasizing the importance of securing reliable access to critical minerals for U.S. economic and national security.
African countries, including AGOA beneficiaries, possess significant reserves of critical minerals such as copper, platinum, and cobalt. Expanding AGOA to promote trade in these minerals could deepen U.S.-Africa trade relations and attract investment in regional supply chains.
Eswatini’s continued participation in AGOA underscores the importance of the trade program in driving economic growth, creating jobs, and fostering international trade partnerships.
The country’s strong export performance and commitment to compliance highlight its readiness to leverage AGOA’s benefits for sustainable development.
As the program’s 2025 expiration date approaches, Eswatini’s stakeholders must remain proactive in advocating for its renewal and exploring new opportunities within the framework of the trade agreement.
By doing so, Eswatini can ensure that its businesses and citizens continue to reap the rewards of this vital economic partnership with the United States.
