Wednesday August 26, 2028

Why the proposed extension of U.S. trade preferences should be treated as a window to deepen Africa’s textile value chains, regional sourcing, and industrial competitiveness.

Introduction

The debate over the future of the African Growth and Opportunity Act (AGOA) has entered another critical phase. On 8 August 2026, the U.S. Senate approved legislation by 90–6 that would extend AGOA’s preferential treatment through 31 December 2028. The measure was incorporated into the broader Continuing Appropriations and Extensions Act, 2027. It now moves to the next stage of the U.S. legislative process before the extension can become law.

The Senate’s latest action would provide a more substantial period of certainty and this is critically important for African exporters, particularly those in the textile and apparel sector. But the significance of the proposed extension goes beyond the question of whether African exporters will retain preferential access to the U.S. market for another two years. The more consequential question for Africa’s industrial future is what the continent does with that additional time.

The proposed 2028 extension should be understood as an industrial window, not just a trade-policy reprieve. Africa has an opportunity to use the additional period of preferential access to strengthen textile manufacturing, deepen regional sourcing, develop supplier ecosystems, improve industrial infrastructure, attract long-term investment, and build capabilities that remain commercially relevant even if AGOA changes again after 2028.

AGOA Has Moved From Crisis to Conditional Certainty

The latest Senate action marks an important shift in the trajectory of AGOA, but it is important to distinguish greater certainty from permanent certainty. AGOA was established in 2000 as a preferential trade framework designed to expand U.S. market access for eligible sub-Saharan African countries while encouraging economic development, trade, and investment. Its eligibility framework also links trade preferences to broader policy conditions, including progress toward market-based economies, the rule of law, poverty reduction, anti-corruption measures, and protection of internationally recognized worker rights.

For more than two decades, the programme has provided a preferential foundation for African exporters seeking access to the U.S. market. Its importance has been particularly visible in sectors such as apparel, agriculture, footwear, and selected manufactured products. However, the programme’s recent history has demonstrated the vulnerability created by policy uncertainty. AGOA’s previous authorization ended on 30 September 2025. It was not until February 2026 that legislation was enacted restoring the programme, and even then the authorization ran only through 31 December 2026. The restoration was retroactive to the date of expiration, helping address the immediate disruption but leaving businesses with a relatively short planning horizon.

The proposed extension would preserve important apparel-related provisions. The legislative text extends duty-free treatment for qualifying apparel and continues the third-country fabric provision, which allows certain apparel produced in lesser-developed beneficiary countries to qualify for duty-free treatment even when specified yarns or fabrics are sourced from outside the AGOA region. That provision is especially important for African apparel manufacturers because the region’s textile supply base remains incomplete. The proposed extension therefore provides two forms of continuity: continuity of preferential market access and continuity of the rules that have helped make African apparel exports commercially viable.

But there is an important caveat. The Senate has approved the extension, but the process is not yet complete. This implies that 2028 is still a deadline and it may be a more distant deadline than the one African manufacturers faced in 2025 and 2026, but it does not eliminate the fundamental question of what happens after the preference period ends.

Why the Apparel Provisions Matter So Much

The textile and apparel sector occupies a distinctive position within the AGOA framework because apparel has historically been one of the areas where the programme’s preferential access and rules of origin have had a direct effect on manufacturing investment.

The importance of the apparel provisions lies partly in the structure of Africa’s existing textile industry. In many countries, the downstream garment industry is more developed than the upstream textile base. Manufacturers can assemble garments competitively using available labour and factory infrastructure, but they may lack sufficient domestic capacity in spinning, weaving, knitting, dyeing, finishing, and the production of other intermediate inputs.

This creates a structural gap between apparel export capacity and textile manufacturing capacity. AGOA’s apparel rules have helped manufacturers operate within that gap. The third-country fabric provision is particularly important because it allows qualifying apparel producers in certain beneficiary countries to use imported fabrics while retaining preferential treatment for eligible exports. The U.S. Trade Representative has explained that such provisions were designed in recognition of the limited regional fabric supply available to many African manufacturers.

From the perspective of an individual garment manufacturer, this can be a major competitive advantage. A factory does not have to wait for an entire domestic textile ecosystem to emerge before it can participate in the U.S. market. It can source fabric internationally, manufacture garments locally, and use preferential access to compete for U.S. orders. This can support employment, foreign-exchange earnings, manufacturing experience, and the development of export-oriented production capabilities.

The wider industrial question, however, is more complicated. If African apparel manufacturers remain structurally dependent on imported fabrics, the growth of garment exports does not necessarily translate into proportional growth in upstream African value addition. The factory may be located in Africa, the workers may be African, and the finished garment may be exported from an African port, but a significant share of the economic value embedded in the product can still originate elsewhere.

This is why the third-country fabric provision should be understood in two ways simultaneously. It is an enabler of African apparel competitiveness but it can also reveal the incompleteness of African textile value chains.

These are not contradictory conclusions. In fact, they point toward the same policy challenge. Africa should preserve the ability of manufacturers to participate in global apparel markets while simultaneously using that market access to build the upstream capabilities that can gradually reduce structural dependence on imported inputs.

The objective should not be to eliminate imported inputs immediately. That would be neither realistic nor necessarily economically efficient. Textile production is a global industry, and competitive manufacturing ecosystems will continue to source some machinery, fibres, chemicals, fabrics, and specialized inputs internationally. The strategic objective is instead to determine which parts of the value chain Africa can competitively develop at regional scale.

For some countries, that may mean expanding cotton production and ginning. For others, spinning may be the most viable opportunity. Another country may have stronger potential in textile manufacturing, dyeing and finishing, or garment production. Others may be better positioned as logistics, recycling, design, or specialized supplier hubs. This is where the AGOA opportunity intersects with the broader AfCFTA agenda.

AGOA provides access to a major external market. AfCFTA can provide the framework for African countries to combine their capabilities and build regional production networks.

The 2026–2028 Window: What Should Africa Build?

If the proposed extension becomes law, African exporters will have greater visibility over U.S. market access through December 2028. Kenya’s government, for example, has already described the proposed extension as providing greater predictability for manufacturers, while emphasizing the importance of preserving the third-country fabric provision for its apparel industry. 

That additional certainty should translate into a different investment conversation. Instead of asking how to protect existing apparel factories until the next AGOA deadline, policymakers should ask what productive capabilities can realistically be built before that deadline arrives. The answer should encompass not only factories, but also the infrastructure, suppliers, skills, technologies, and institutions that allow factories to operate competitively.

The first priority is textile manufacturing capacity. Africa cannot deepen its apparel industry indefinitely without strengthening the stages that sit upstream of garment production. Spinning, weaving, knitting, dyeing, finishing, and other textile processes require substantial capital and technical expertise, but they are also where a significant portion of industrial value is created. The objective should be to identify commercially viable capabilities and build them at sufficient scale to serve domestic and regional markets.

The second priority is regional supplier development. A competitive apparel industry needs access to fabrics, yarns, trims, accessories, packaging, chemicals, machinery maintenance, testing, and other services. Where these inputs are unavailable locally, manufacturers often have little choice but to import them. Building regional supplier ecosystems would allow more of the value associated with apparel production to remain within Africa while reducing some exposure to long and vulnerable international supply chains.

The third priority is industrial infrastructure. Reliable energy, water, wastewater treatment, logistics, industrial parks, testing laboratories, and digital systems are not secondary considerations. They determine the operating environment in which manufacturers make investment decisions. Recent African initiatives increasingly recognize this ecosystem requirement. The AfCFTA Secretariat, for example, has highlighted integrated and vertically connected manufacturing ecosystems, investment mobilization, sustainable industrial infrastructure, and regional production networks as practical priorities for the continental CTA value chain.

The fourth priority is skills. Textile industrialization requires technicians, engineers, machine operators, production managers, quality specialists, designers, maintenance professionals, and increasingly workers with digital and sustainability capabilities. Investment in machinery without investment in the people who can operate, maintain, adapt, and upgrade that machinery will produce limited industrial depth.

The fifth priority is investment pipelines. Africa needs to move beyond broad statements that the continent is open for textile investment and identify specific, commercially credible projects. This is already beginning to emerge. The WTO-backed Partenariat pour le Coton has launched the Africa Textile Invest platform as a single access point for country information, industrial zones, and investment opportunities in the cotton-to-textile-and-garment sector.

Finally, Africa needs better trade and investment intelligence. Governments and investors should be able to identify which products have growing demand in the U.S. and African markets, where supply gaps exist, which countries possess complementary capabilities, and where investment can generate the greatest value addition. Trade preferences are most useful when they are combined with accurate intelligence about where commercial opportunities actually exist.

The 2026–2028 period should be perceived as a capacity-building window with the goal of building the industrial capabilities that make preferential access more valuable and make African manufacturing more resilient when the rules eventually change.

AGOA and AfCFTA Should Not Be Treated as Separate Agendas

AGOA and AfCFTA operate at different levels, but their strategic value to African textile industrialization can be complementary. AGOA provides eligible African exporters with preferential access to a major external market, while AfCFTA is designed to deepen the continental market and facilitate greater regional integration. The industrial opportunity lies in connecting the two.

For too long, African trade strategies have often treated export markets and domestic or regional industrial development as separate objectives. An apparel manufacturer might be encouraged to export to the United States, while regional sourcing, African supplier development, and intra-African trade are treated as separate policy questions. This separation misses the opportunity to use external demand to strengthen regional production.

A more integrated model would work differently. African manufacturers could use access to the U.S. market to generate demand for production, while sourcing an increasing share of competitive intermediate inputs from within Africa. A garment producer in one country could source fabric from another. A textile mill could source cotton from a neighbouring producer. A recycling facility could serve several manufacturing hubs. Logistics companies could develop regional networks connecting production centres to both African consumers and overseas export gateways.

This is consistent with the broader direction of AfCFTA implementation. The AfCFTA Council of Ministers has emphasized that the continental agenda is now shifting from negotiating the architecture of the agreement toward implementation and measurable outcomes for businesses and citizens. The African Union’s latest publication, Integrating Africa: From Threads to Hubs, similarly identifies stronger regional value chains, reduced behind-the-border trade frictions, deeper implementation of regional agreements, and investment in regional infrastructure as priorities for capturing greater value within Africa. 

The potential is particularly significant because intra-African trade already has a different composition from Africa’s trade with the rest of the world. According to the African Union, more than 60% of intra-African trade consists of manufactured goods, while approximately 85% of Africa’s total trade flows outside the continent. This suggests that regional integration can provide an important platform for expanding manufacturing and retaining more value within African economies.

For the textile sector, this means AGOA and AfCFTA can perform different functions within the same industrial strategy. AGOA can provide external demand while AfCFTA can provide regional scale. The U.S. market can create incentives for export-oriented production, while the African market can provide demand for intermediate goods, machinery services, fabrics, garments, uniforms, home textiles, and other products. Regional sourcing can also make African manufacturers less dependent on distant suppliers while allowing different countries to specialize according to their capabilities.

The proposed extension can also influence investment decisions by providing greater visibility over the future market environment. This matters because textile investments are rarely short-term decisions. A spinning mill, textile factory, industrial park, energy project, or supplier-development facility may require significant upfront capital and several years before investors recover their investment.

The proposed extension through 2028 therefore provides a more useful planning horizon than the short-term renewal that followed AGOA’s 2025 expiration. But the investment signal has limits. A two-year extension is still relatively short when compared with the life cycle of major industrial assets. Investors considering a new textile mill or integrated manufacturing cluster will need to assess what happens after 2028. This is why the most important investment response to AGOA should be investment that improves underlying competitiveness.

Governments should use the AGOA window to attract investment into capabilities that have value beyond the preference itself. This means prioritizing projects that strengthen textile production, industrial infrastructure, supplier networks, technology, skills, logistics, and environmental performance.

Beyond 2028: What Happens When Preferences Become Less Certain?

Indeed, the United States has already signalled that the future of AGOA is likely to involve modernization. In April 2026, USTR formally sought public comments on modernizing AGOA, stating that a modernized programme should deepen U.S.-Africa economic ties, eliminate barriers to trade, and create opportunities for U.S. businesses. 

This means African policymakers should not plan around a simple assumption that AGOA will eventually return to a long, predictable authorization period with essentially unchanged rules. The future could involve different eligibility requirements, greater emphasis on reciprocity, changes to market-access provisions, stronger conditions, or new approaches to the U.S.-Africa trade and investment. The exact outcome remains uncertain, but the direction of debate is clear enough to justify preparing for a more demanding trading environment.

This makes post-AGOA competitiveness an important industrial-policy objective. African manufacturers need to be able to compete on factors such as productivity,product quality, speed to market, reliable energy, logistics, scale, skills, technology, sustainability, regional sourcing,  and supply-chain resilience. Trade preferences can enhance these advantages, but they cannot substitute for them.

The implication is that the period leading to 2028 should be treated as a transition period. Governments and manufacturers should ask what capabilities must be in place before the next major trade-policy decision is made. A useful test would be: If AGOA preferences were reduced tomorrow, which African textile investments would remain commercially viable? The answer would reveal where genuine competitiveness exists and where industrial policy still needs to intervene.

A New Framework for Using Trade Preferences

This leads to a broader question: how should African policymakers evaluate trade preferences in the future?

The conventional approach is relatively straightforward. If preferential access increases exports, the programme is considered successful. But that measure is insufficient for an industrializing continent, a more useful framework would assess whether trade preferences generate a sequence of increasingly deeper economic outcomes.

• Stage 1: Market Access – The first function of AGOA is to provide African exporters with access to the U.S. market under preferential conditions. This remains valuable. Without demand, investment in export-oriented manufacturing becomes difficult.
• Stage 2: Investment – Market access should then be converted into investment. Governments should use preferential access to attract manufacturers, suppliers, infrastructure providers, technology companies, and investors.
• Stage 3: Value Addition – The next objective should be increasing the amount of value retained within Africa. That means progressively developing spinning, textile manufacturing, dyeing and finishing; garment manufacturing, packaging, logistics, technical services; and other supporting industries.
• Stage 4: Regional Integration – Once productive capabilities begin developing, AfCFTA can connect them. Inputs should move across African borders where regional sourcing is commercially viable. Countries should specialize rather than duplicate inefficiently. This is where the concept of a continental textile industry becomes meaningful.
• Stage 5: Competitiveness – The fifth stage is the most important. African manufacturers should progressively compete because they are productive, efficient, innovative, reliable, and well integrated. Trade preferences should accelerate the journey toward competitiveness rather than become a permanent substitute for it.
• Stage 6: Resilience – Finally, African textile industries need diversified markets. The objective should be to serve African consumers, U.S. buyers, European markets as well as other global markets. A manufacturer with several viable markets is less vulnerable to changes in one trade programme.

Conclusion: Africa Should Use AGOA, Not Depend on AGOA

AGOA has played an important role in demonstrating that African countries can participate in global apparel manufacturing. It has helped create export markets, attract investment, generate employment, and establish commercial relationships between African producers and U.S. buyers. U.S. government data show that AGOA-supported trade has included significant apparel exports, with total U.S. imports under AGOA and GSP reaching $9.7 billion in 2023, including approximately $1.1 billion in apparel. 

But the programme has also exposed a deeper industrial challenge. Africa has demonstrated that it can export garments, it has not yet demonstrated that it can consistently capture a sufficiently large share of the industrial value chain behind those garments. This is the challenge the proposed 2028 extension should help address.

If enacted, the extension will provide African manufacturers with more time and greater certainty. But time only becomes strategically valuable when it is used to build something that lasts. The next two years should therefore be used to strengthen the missing capabilities: spinning and textile production; dyeing and finishing; industrial infrastructure; skills; supplier ecosystems; technology; logistics; investment pipelines; regional sourcing; and industrial coordination.

AfCFTA provides the opportunity to connect these capabilities across borders. Its importance is that it creates a larger market which can allow African countries to specialize, integrate, and achieve the scale that individual national markets often cannot provide. Recent research on African textile and apparel value chains similarly argues that a continental value chain should build on differentiated regional strengths rather than assume that every country will develop the same capabilities.

AGOA, meanwhile, can remain an important external market opportunity. It would be a strategic mistake to treat the two frameworks as alternatives, they are potentially complementary. Africa should therefore ensure that when that deadline arrives, it has a stronger industrial base than it had when the current window opened. The most important measure of AGOA’s next phase should consequently be the productive capacity built during those years.

Africa should use AGOA aggressively, strategically, and intelligently. But it should not build an industrial future that depends on it. The real opportunity is to turn preferential market access into permanent productive capability and to use AGOA as a bridge toward an integrated African textile economy that can compete long after the preference itself changes.