Africa-Press – South-Africa. The extension of the African Growth and Opportunities Act (AGOA) will bring much-needed relief to South Africa’s agricultural and manufacturing sectors—but the government’s new BEE policies are tightening the screws and could cause even more damage.
US President Donald Trump this week signed a one-year extension of AGOA, effective retroactively from September 2025 and expiring in December 2026.
While it was not the three-year or longer extension that many stakeholders had hoped for, the retroactive application and non-exclusion of South Africa allows local industries to breathe a sigh of relief.
According to Aluma Capital Chief Economist, Frederick Mitchell, it was an unexpected twist in the AGOA saga, given South Africa’s sour relationship with the United States and concerted efforts to kick the country out of the agreement.
Nevertheless, “this extension is critical for South African exporters who have been grappling with various challenges, particularly a hefty 30% reciprocal tariff on goods exported to the US instituted in August 2025,” he said.
For South African exporters, the AGOA agreement has traditionally facilitated duty-free access to the US market, thereby supporting various sectors such as agriculture and manufacturing.
South Africa has been the biggest beneficiary of the programme, exporting goods worth over R300 billion between 2019 and 2024.
However, Michell warned that, even with the extension, South Africa’s industries remain under severe pressure, given the existing US tariffs that undermine many of the benefits.
“As a result, businesses in these sectors face the grim prospect of losing market share in the US due to the high tariffs. Firms may experience closures and significant job losses, exacerbating an already challenging employment landscape,” he said.
Not only are industries facing external pressure from US tariffs, but they are also under siege from local government policies, tightening the screws on trade.
“While the AGOA extension provides a temporary lifeline for South African exporters, it is evident that substantial reforms are needed to ensure sustainable growth and competitiveness in both the agricultural and manufacturing sectors,” he said.
“Addressing regulatory burdens, fostering an enabling environment for investment, and balancing transformation objectives with economic realities are paramount.”
Government adding more hurdles
DTIC Minister, Parks Tau
Mitchell noted that the agricultural sector, one of the country’s biggest employers with around 920,000 workers, is a vital part of South Africa’s economic fabric.
“However, recent governmental policies have introduced additional layers of complexity,” he said.
He pointed to new Broad-Based Black Economic Empowerment (B-BBEE) requirements, which stipulate that agricultural exporters must meet specific racial criteria to access export permits.
This refers to a January gazette that noted that BEE credentials will play a role—alongside historical market share and export volumes—when dividing export permits to the European Union.
This would impact exports such as wine, sugar, and fruit.
“Critics argue that these measures unfairly disadvantage white-owned farms and could stifle the very growth that South Africa desperately requires,” Mitchell said.
Moreover, proposed amendments to water-use licenses, which would require a significant portion of shareholding to be allocated to black South Africans, threaten the operations of established agricultural producers, he added.
“Both sets of policies risk harming the food security and sustainability of an industry that not only serves domestic needs but also has vital export markets, including the EU, where specified quotas allow for predictable access.”
On the manufacturing side, local industries are grappling with a range of problems, including high and rising electricity costs, high taxes, and stringent labour laws.
Prospects for growth remain fraught, Mitchell said.
“The closures of key manufacturers like ArcelorMittal and GoodYear highlight the urgency for addressing systemic issues within the sector,” he said.
“Transitioning towards a more competitive manufacturing landscape is essential to halt the alarming trend of de-industrialisation that threatens job security for countless families.”
Source: businesstech
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