Africa Daily – "Is Africa’s trade relationship with the United States under threat?"

Date: February 17, 2025
Host: Alan Kasuja, BBC World Service

Overview

This episode explores the uncertain future of Africa’s trade relationship with the United States, focusing on the Africa Growth and Opportunity Act (AGOA) and how changing US politics—particularly under President Donald Trump’s 2025 administration—could impact African economies. With examples from South Africa, Eswatini, and Uganda, host Alan Kasuja examines both the direct business implications and the broader diplomatic dynamics at play. Guests include South African businessman Hlahlad Dlamini, Eswatini economics lecturer Sanele Sibiya, and Ugandan coffee farmer Robert Kabushenga.

Key Discussion Points and Insights

1. Background and Immediate Concerns ([00:48]-[03:15])

• AGOA Explained: AGOA, launched in 2000, allows qualifying Sub-Saharan African countries tariff-free access to the US market to foster economic growth.
• Recent Shifts: The threat of non-renewal under the Trump administration, in the context of trade disputes and shifting political alliances, casts uncertainty on the future of AGOA.
• Precedent: In 2023, President Biden removed Uganda, Central African Republic, Niger, and Gabon from AGOA due to non-compliance, notably after Uganda’s anti-homosexuality law.

2. South Africa: A Major AGOA Beneficiary at Risk ([03:57]-[10:45])

Guest: Hlahlad Dlamini (Johannesburg; Maneli Pets)

• Business Impact:

  • The US is the largest market for Dlamini’s pet food business, once accounting for 80–85% of revenue (now 20–25% post-COVID).
  • South Africa’s proteins—ostrich and venison—have been key for entry into US and EU markets.

• Market Position:

  • "The US makes up 2/3 of the global pet industry, which is pretty crazy to just let that sink in."
    — Hlahlad Dlamini ([06:34])

• Political Risk:

  • South Africa’s stance on Israel at the ICJ and broader foreign policy could put its AGOA status in jeopardy.
  • Dlamini is cautiously optimistic: "I think there’s potentially a lot of noise and bluster around some of these tariffs... the practicality of doing it across the entire industry would be pretty hard... I’m hoping that the pets industry is not sitting within that basket." ([08:07])

• Contingency Plans:

  • Dlamini's business has backup strategies (local, regional, and Asian markets): "We do have a plan B and a plan C... COVID really turned the business on its head. People lose jobs... It has a knock-on impact." ([09:46])

3. Eswatini: Missed Opportunities and Economic Dependence ([10:45]-[14:05])

Guest: Sanele Sibiya (University of Eswatini)

• Sectoral Impact:

  • "If you look at quite a chunk of the sugar that Eswatini exports, you know, quite a big chunk of it does go into the US market and Agoa actually facilitates that occurring." ([10:58])
  • The textile sector, in particular, hoped for AGOA-driven revival, but progress is slow.

• Underutilization:

  • Despite over a thousand export lines available, Eswatini utilizes only one or two under AGOA—mainly sugarcane.
    — "Right now it’s just the sugarcane line. One or two lines." ([12:00])

• Wider Context:

  • Many African countries lack the capacity or preparedness to fully exploit AGOA opportunities.

• If AGOA Ends:

  • Eswatini would feel strong negative effects, especially in sugar and newly invested sectors like beef. The government would likely seek renegotiation, as it did after a previous suspension. ([12:30], [13:45])

4. Uganda: AGOA’s Limited Economic Impact and Strong Diplomatic Value ([14:10]-[19:14])

Guest: Robert Kabushenga (Coffee Farmer, Uganda)

• Trade Reality:

  • "The assumption is that because of Agoa, we experienced an explosion of trade and growth. No, we didn’t. There were really small volumes from cottage industries... We didn’t have the scale... We even tried so hard to set up a textile industry... and we completely failed." ([14:38])

• Who Benefited?

  • AGOA's true economic benefits are concentrated in countries with scale—Kenya, Lesotho, Ethiopia, South Africa.

• Diplomatic Leverage:

  • "Uganda positioned itself as a champion of AGOA... to be seen as an American ally... But you didn’t see steps taken to grow the volumes of trade between us." ([15:46])
  • For Uganda, AGOA provided more diplomatic leverage than genuine trade growth.

• Continental Impact:

  • Many African countries lack the capacity to use AGOA. Even with opportunity, utilization remains marginal, similar to Eswatini.
  • "So really AGOA wasn’t addressing those types of issues. Those issues are handled in a direct and bilateral way." ([17:38])

• US Priorities:

  • AGOA is less significant in US policymaking than assumed: "They [Trump administration] don’t care, Alan. This is the new reality that we’re going to have to face and it is a fantastic opportunity for us to redefine our position away from the US trying to tell us who we can or cannot be because they really don’t care about US foreign [policy]." ([19:14])

Notable Quotes & Memorable Moments

• Hlahlad Dlamini ([06:34]):

  • "The US makes up 2/3 of the global pet industry, which is pretty crazy to just let that sink in. One country makes up 2/3 of the global pet market, so we'd be foolish to ignore such a large and fast growing industry."

• Sanele Sibiya ([10:58]):

  • "In the absence of Agoa, we would actually see some negative impacts in terms of economic activity."

• Robert Kabushenga ([14:38]):

  • "The assumption is that because of Agoa, we experienced an explosion of trade and growth. No, we didn’t."
  • "For us, we used it purely for diplomatic leverage politically in the US so that we could get closer to the US establishment and be seen as a US ally." ([15:46])
  • "[The Trump administration] don't care, Alan. This is the new reality... it is a fantastic opportunity for us to redefine our position away from the US trying to tell us who we can or cannot be." ([19:14])

Timestamps for Important Segments

• [00:48] – AGOA overview and recent US political moves
• [03:57] – South Africa’s role and Hlahlad Dlamini’s business
• [10:45] – Eswatini’s narrow utilisation of AGOA, Sanele Sibiya’s insights
• [14:10] – Uganda’s AGOA experience, Robert Kabushenga’s analysis
• [19:14] – US administration’s attitude and Africa’s diplomatic choices

Episode Summary

The episode provides a sharp analysis of the fragility in Africa–US trade relations, especially under shifting American politics. Although AGOA has opened tariff-free access to the US, its success has been uneven, with only a handful of countries reaping substantial economic gains. Lack of capacity and preparedness hampers most African countries' abilities to utilize these opportunities. South Africa stands to lose the most if relations with the US sour, particularly over contentious international issues. Meanwhile, for countries like Uganda, AGOA offered more diplomatic value than real economic change.

The guests clearly convey that Africa must reassess its dependency on AGOA and the US, prepare contingency plans, and push for wider capacity-building to truly benefit from global trade opportunities—regardless of political storms in Washington.