Is AGOA Creating Investment or Just Exports?
Trade preferences are often evaluated through export figures. While these are important indicators, they do not tell the entire industrial story. For the CTA sector, a more productive measurement criterion is: What productive capacity has been created because of preferential access?
This changes the measurement framework. Instead of looking only at exports, policymakers should examine whether AGOA has contributed to investment in textile mills, apparel factories, industrial parks, energy infrastructure, logistics, machinery, skills, testing facilities, supplier networks, compliance systems, and export-support institutions.
This distinction matters because trade preferences can generate two very different outcomes. In the first, investors establish factories primarily to exploit temporary market advantages. Production remains relatively shallow, imported inputs dominate, and investment can move elsewhere when preferences become less attractive.
In the second, market access becomes the foundation for deeper industrial investment. Firms develop local suppliers, workers acquire specialized skills, textile capacity expands, logistics systems improve, and regional production networks emerge. The second model generates far greater developmental value.
The current AGOA transition therefore creates an opportunity to reconsider what Africa wants from the programme. The objective should focus beyond AGOA exports towards more productive investment associated with AGOA opportunities. This also changes the role of investment promotion agencies. Instead of marketing Africa primarily as a location for low-cost apparel assembly, investment strategies can increasingly target specific industrial gaps such as mentioned above. Such targeted investment can gradually strengthen the industrial depth behind exports.
The current U.S. policy debate makes this particularly relevant. When USTR announced the 2026 reauthorization, it explicitly stated that the United States intends to work with Congress to modernize AGOA and align the programme with the administration’s broader trade policy. USTR subsequently launched a public consultation on modernization, emphasizing the need to deepen U.S.-Africa economic ties, eliminate trade barriers, and create new opportunities for U.S. businesses.
African governments therefore have an opportunity to articulate what they want the next generation of AGOA to achieve. The conversation should extend beyond preference duration to include investment, technology transfer, regional value chains, industrial capacity, skills, supply-chain resilience, sustainability, and stronger two-way commercial relationships.