Tanzania’s access to US market in jeopardy after AGOA expiration

Currently, 32 countries are eligible for this preferential treatment under AGOA, of which 21, classified as “lesser developed countries” by the US, also receive special textile and apparel preferential treatment.

Tanzania, being one of the beneficiary countries, is hopeful for the renewal of the trade pact to enable local industries to continue exporting to the US.

Dr. Hashil Abdallah, the Permanent Secretary at the Ministry of Industry and Trade, stated that the government is now relying on regional blocs, such as the East African Community (EAC), to urge the US Congress to extend the deal.

“If the programme is not renewed, many local industries and businesses could face significant setbacks,” he said, adding that some Tanzanian companies are already benefiting from AGOA. “If it ends, they could lose access to the US market and encounter serious business challenges.”

AGOA allows over 1,800 products, including garments, agricultural goods, and minerals, to enter the US market without tariffs. In 2023, US imports under AGOA were valued at nearly $10 billion, according to US statistics.

“Through regional blocs, we are requesting and urging Congress to extend this law so that we can continue trading in the US without affecting businesses and industries that have found markets for their products,” Dr Abdallah added.

Independent economist Oscar Mkude expressed concerns about the clarity of AGOA's future. Although negotiations had begun earlier, US President Donald Trump’s tariff policies disrupted progress, leaving a clear framework for renewal uncertain.

 “It’s possible, but not very likely,” Mr Mkude said. “We may have to continue trading with the US under normal market conditions, which include higher tariffs.”

According to him, Tanzania’s key exports under AGOA in 2023 included gold ($51.1 million), agricultural products ($28 million), and garments ($11 million). “Still, total exports to the US make up only 1.86 percent of Tanzania’s overall exports, amounting to about $210 million out of over $10 billion to the rest of the world,” he noted.

Dr Abel Kinyondo, a Senior Lecturer at the Dar es Salaam University College of Education (DUCE), emphasised the critical importance of understanding the country's production capabilities to drive sustainable economic growth.

 He pointed out that increasing the country’s capacity for value addition is essential. “Signing multiple trade agreements, including AGOA, holds little significance if we do not have competitive products or services to offer in exchange,” Dr Kinyondo explained.

He stressed that without enhancing domestic production and improving value addition, such agreements cannot fully benefit the country's economy.

He further highlighted the need for strategic investments in local industries and innovation to boost Tanzania’s export potential and ensure meaningful participation in global markets.

The expiration of AGOA would make it more expensive and challenging for African goods, especially textiles and garments, to compete in the US market.

Countries like Kenya and Madagascar would face steep increases in tariffs. For instance, Kenya’s average tariff on exports to the US would nearly triple from 10 percent to 28 percent, while Madagascar’s would double to 23 percent.

AGOA has not only aided African exporters but also benefited US companies by providing access to cheaper raw materials and encouraging American investment in Africa.

The trade deal has supported job creation, improved supply chains, and strengthened economic ties between the US and Africa.

On March 30, President Samia Suluhu Hassan urged then-US Vice President Kamala Harris to consider extending AGOA to provide African countries with greater opportunities for trade expansion.

“African nations, including Tanzania, are requesting that this agreement be extended for 10 years to assure sustainability for investors conducting business here,” said President Hassan.