raymondparson

MEDIA STATEMENT · 3 NOVEMBER 2026

Prof Raymond Parsons
Economist, NWU Business School, North-West University

Commenting on the US decision to exclude South Africa from the African Growth and Opportunity Act (AGOA) from January 1, 2027 NWU Business School economist Prof Raymond Parsons says:

‘Although the widely anticipated removal of South Africa’s AGOA preferences by the US on January 1, 2027, will have a minimal impact on the domestic economy as a whole, specific sectors like agriculture and the motor industry will inevitably be negatively affected. The automotive and agricultural industries are poised to bear the brunt of the AGOA exclusion. While only about 10% of South Africa’s exports to the US are currently subject to AGOA, South Africa’s exit still puts thousands of jobs at risk in these sectors.

Although the loss of AGOA preferences is highly regrettable and the specific sectoral impact may be painful, the situation is manageable if the right market adaptations are made. Addressing the negative economic consequences of losing AGOA preferences will therefore continue to require close collaboration between government and the relevant business interests to identify alternative trade strategies.

Additionally, despite the AGOA decision, non-AGOA trade relations with the US remain far more substantial, with the overwhelming bulk of SA’s exports to that country falling outside AGOA preferences. This trade then drives the vast majority of existing bilateral economic ties between SA and the US. The non-AGOA trade relationships are therefore reinforced by a robust footprint that goes beyond trade balances. The AGOA result still means that the core economic pipeline of trade and investment connecting SA and the US remains intact, and must continue to be nurtured.

Nonetheless, the AGOA exit also now reinforces two things. First, SA must accelerate its market diversification strategy in a changing geoeconomic world that offers new opportunities. Enlarging and diversifying trade options includes expanding East Asian market access to growing economies there, as well as further leveraging economic opportunities through the African Continental Free Trade Agreement (AfCFTA). Secondly, the government must aim to make the domestic economy more internationally competitive by reducing the costs of doing business in SA. This in particular encompasses expediting logistics reform, especially in rail and port facilities, that will help to offset the AGOA loss by keeping SA globally competitive’.