The loss of preferential access to the U.S. market could jeopardise economic growth in several Sub-Saharan African nations at a time when the region’s recovery is still precarious, according to the World Bank, which has warned that the expiration of the United States’ African Growth and Opportunity Act (AGOA) in late 2025 poses a serious threat to African exports.
Sub-Saharan Africa’s economic growth increased slightly from 3.7 percent in 2024 to a projected 4.0 percent in 2025, according to the World Bank’s most recent Global Economic Prospects report.
Reduced inflation and higher-than-anticipated commodity prices, especially for coffee, gold, and other precious metals, contributed to the recovery by increasing fiscal income in a number of nations.
The Bank emphasised that growth in the area is still uneven and below long-term norms, making many countries susceptible to shocks from the outside world.
The possible loss of AGOA stands out as a significant negative risk in this precarious recovery. AGOA has supported export-led growth and job creation, especially in manufacturing and agriculture, by enabling qualified African nations to export thousands of goods to the US duty-free for more than 20 years.
The World Bank cautioned that the expiration of AGOA will reduce the competitiveness of African exports in the U.S. market if the program is not renewed.
The paper identifies a number of nations that are particularly susceptible to losing access to U.S. markets, even while it acknowledges that the majority of Sub-Saharan African economies have little direct exposure to global trade fragmentation.
Côte d’Ivoire, Kenya, Lesotho, Madagascar, Mauritius, and South Africa were identified as economies that rely heavily on the U.S. market for goods and commodity exports and would therefore face the greatest risks if AGOA preferences are not renewed.
The World Bank clarified that in the absence of AGOA, these nations’ exports would probably be subject to increased tariffs, which would weaken their competitiveness and perhaps result in lower export volumes.
Employment might be severely impacted by such a result, especially in labour-intensive industries like textiles, clothing, and agro-processing, where millions of jobs rely on access to foreign markets.
The caution is issued in the midst of more general concerns about international commerce. The World Bank warned that growing trade barriers or greater policy uncertainty might significantly impair export performance in Sub-Saharan Africa, even though its baseline predictions assume that current bilateral tariff levels remain stable throughout the forecast period.
Since 2024, official development support has drastically decreased, which has limited budgetary flexibility and decreased governments’ ability to mitigate the effects of external shocks.
With increased investment and export growth, the World Bank predicts that Sub-Saharan Africa’s economy would rise to 4.3 percent in 2026 and 4.7 percent in 2027.
The Bank stressed, however, that these forecasts are highly dependent on a stable international environment and notable advancements in security, especially in vulnerable and conflict-affected nations. It cautioned that these estimates might be derailed for a number of export-dependent nations if AGOA is not extended.
Although the anticipated improvement, the region’s per capita income growth is predicted to average just 2 percent per year in 2026 and 2027, which the World Bank claims is insufficient to provide enough employment to accommodate the region’s fast expanding labour force. Sub-Saharan Africa is expected to have 270 million young people by 2025, making it crucial to keep access to important export markets.
According to the World Bank, if AGOA is prolonged, global growth proves to be higher than anticipated, commodity prices stay stable, and regional integration keeps deepening, Africa’s economic prospects might improve. Improvements under the African Continental Free Trade Area and more duty-free access to China may also aid in reducing external concerns. However, the Bank emphasised that African exports, employment, and efforts to reduce poverty would suffer greatly if AGOA expired without an extension.
