Roughly R14.8 billion. That is the value of South African exports to the United States affected by losing preferential access under the African Growth and Opportunity Act, according to independent economist Duma Gqubule, out of total exports to the US of R148 billion in 2025. His verdict: the exclusion is unlikely to deal a material blow to the economy, and the financial consequences have been overstated.
“The affected AGOA exports are 10% of total exports to the US, so that is R14.8 billion,” he said, arguing South Africans should not be hysterical about the decision. The loss of the tariff advantage, on his estimate, translates into a competitive disadvantage of around R500 million, a figure he considers small against the broader economy. Exporters are unlikely to lose the American market entirely. US consumers who favour South African products such as oranges and locally manufactured vehicles may keep buying them despite the added tariffs.
The bigger risks to export earnings lie elsewhere. Gqubule points to the wider tariffs imposed by US President Donald Trump on trading partners, which could hit South African exports harder than the loss of AGOA preferences. The strengthening rand presents an even greater challenge.
“The exchange rate has appreciated recently, and that’s going to have much more negative impact on exports than AGOA. So our rand is strong, and a good rand is not good for exports,” he said. A weaker currency, in his view, should form part of a broader competitiveness strategy. He points to Japan, China and other Asian economies that have used similar approaches to expand global market share.
On the policy response, Gqubule says the country should treat the trade developments as an opening to reinforce industrial policy and diversify export markets. South Africa currently spends about 0.3 to 0.4% of GDP on industrial policy, by his estimate, including business incentives channelled through the Department of Trade, Industry and Competition and the Industrial Development Corporation. That level of support, he argues, is inadequate if local firms are to compete internationally and reach alternative markets.
“If you want to industrialise our country, we have to have much stronger support from the National Treasury to be able to provide direct support for our exporters to conquer world markets and diversify,” he said. He cited China’s investment in its electric vehicle industry as evidence that substantial government incentives can help domestic industries develop new products and become competitive globally.
The structure of the export basket also drew his attention. More than half of South Africa’s exports consist of unbeneficiated minerals, and he argues the country should add value to agricultural and mineral products rather than relying on raw materials. “We have to diversify our export basket irrespective of AGOA. We need to diversify from the excessive dependence on mineral exports and unbeneficiated mineral exports,” he said, adding that manufacturing and services exports should expand alongside stronger trade relationships beyond traditional markets. The original report, published by Jacaranda FM, is available at https://www.jacarandafm.com/news/news/agoa-exclusion-unlikely-major-impact-sa-economy/.
Meanwhile, on the diplomatic tensions between Pretoria and Washington, Gqubule does not believe the AGOA exclusion should fundamentally alter the broader relationship with the United States. He also questioned some of Washington’s criticisms of South Africa’s black economic empowerment policies, noting that several American companies operating locally have participated in empowerment initiatives. His message to exporters and policymakers is that the focus should remain on strengthening productive capacity, supporting exporters and expanding international trade opportunities, rather than treating the loss of AGOA preferences as an economic catastrophe. Whether the National Treasury moves to provide that stronger support for exporters is now the open question.