U.S.-Africa Trade at a Crossroads: A Moment for New Thinking

In 2000, when the African Growth and Opportunity Act (AGOA) passed, less than 1 percent of Africans had internet access, the continent’s overall GDP per capita was one-third of today’s, and over half of all African exports went to Europe and North America, primarily as raw commodities.

More than two decades later, AGOA’s early promise of market access and industrial diversification has produced uneven and limited results. At the same time, dynamics across the African continent have drastically changed—Asia dominates as a destination for African goods; internet access has increased to approximately 36 percent of the continent; and, while African exports still rely heavily on raw commodities, they are increasingly built on value addition, services, and digital integration.

The recent passage of AGOA by the House and Senate as part of a continuing budget resolution extends the trade preference program until December 31, 2028. Following this legislative success, what is needed is to take stock of shifting global trends and changes in the structure of the African economy, while broadening the examination of the U.S.-Africa trade relationship. AGOA’s extension provides an opening to proactively develop a future-forward policy framework, with goals aligned with African partners that can be realized within the next two years to match the scale of the commercial ambitions of the United States and African countries.

Changing Macro-Positions

AGOA was not specifically designed to compete with Chinese trade. The trade preference program was intended to support sub-Saharan African countries’ access to and integration into global markets, with the expectation that it would spur private-sector-led growth, international investment, and industrialization. Trade preferences under the program have supported real manufacturing growth in Kenya, Madagascar, Lesotho, and elsewhere, but they have been limited to sector- and country-specific gains.

Still, evaluating a foundational part of the U.S.-African trade relationship is hard without examining the current macro-environment. In 2025, China-Africa trade reached a record $348 billion, more than three times the roughly $104.9 billion in U.S.-Africa trade. However, these numbers cover the full continent, while AGOA trade preferences apply only to sub-Saharan Africa. Trade between the United States and sub-Saharan Africa is about equal to China’s trade with South Africa alone. Regardless of the geographic frame, China-Africa trade has grown significantly, while U.S.-Africa trade has remained relatively stagnant. Washington began the century with a commanding advantage. It now trades with the continent at a third of Beijing’s volume.

The gap is only increasing in the sectors most likely to define international relations going forward. On critical minerals, Chinese companies control the supply chain and global processing capacity for rare earths even though they directly own or operate only a small percentage of African mines. Chinese dominance remains as the U.S. government and American firms have increased negotiations for new access arrangements. On digital infrastructure, Chinese vendors such as Huawei and ZTE are commonly cited as having built an estimated half of Africa’s 3G and approximately 70 percent of its 4G networks. Chinese AI models are also emerging as local favorites due to their ease of use, low cost, and accessibility, while Chinese companies are reportedly offering free computing to companies and governments across the continent.

The data raises a bigger question surrounding U.S.-Africa trade policy. AGOA is focused on sub-Saharan African countries, treating Africa as a collection of individual markets rather than as increasingly integrated. Since 2000, when AGOA was signed, Africa has moved toward deeper integration through regional economic communities and, more recently, the African Continental Free Trade Area (AfCFTA).

Again, none of this means AGOA has failed on its own terms. Yet, from a broader perspective, relitigating AGOA provisions misses larger economic shifts and will not, by itself, create the trade relationship Americans and Africans want.

African-Led Commerce

Critical to the conversation are the diversity of African perspectives and initiatives to expand African commerce and support countries’ economic development goals. At the official level, trade ministers from AGOA-eligible countries have long called for renewing and enhancing the program. But they are seeking specific advances, including alignment with the AfCFTA so that AGOA and the AfCFTA reinforce rather than compete with each other, as well as expanded coverage in agriculture, textiles, and minerals.

Beneath that official position on AGOA, there are deeper structural debates. African leaders and economists increasingly describe a move toward economic autonomy and diversification anchored in the AfCFTA. These discussions are evident in deliberate efforts to increase intra-African trade, which increased to over $192 billion in 2023. Similarly, the Pan-African Payment and Settlement System, the continental payment infrastructure, is designed explicitly to reduce dependence on foreign currencies, reduce payment friction, and increase intra-African trade.

Some analysts go further, arguing that a deeper limitation is not market access but capital. They believe that the continent’s long-term interest lies in resilient, local economic systems, which require increased access to capital and diversified investment. Efforts to reform current credit rating processes, as well as the establishment of the African Credit Rating Agency by the African Union and the African Peer Review Mechanism, align with goals of securing more affordable credit.

A focus on the relationship between resilient local economies and capital reflects a desire to increase domestic value addition, moving African economies beyond raw mineral and unprocessed agricultural exports up the supply chain to capture a larger share of value. Over time, African economists argue, this will increase jobs, decrease exposure to global shocks, and build long-term wealth.

Yet, with intra-African trade still representing only 15 to 18 percent of the continent’s total trade, the aspiration toward self-reliance is still being developed, with opportunities to complement this vision.

Looking Long Term

AGOA has been a pillar of the U.S.-Africa trade relationship for a quarter century. If the legislation’s longevity, compounded by the challenges of enacting and updating the legislation over that period, is representative of the future legislative process, then a forward-looking perspective is required. The longer-term case for a restructured U.S.-Africa commercial framework needs to rest on three structural realities. 

Africa’s demographic trajectory is the first. By 2050, the continent’s working-age population will exceed 1.1 billion—the largest expansion of any labor market in the world. Sub-Saharan Africa alone will need to create an estimated 15 million jobs annually by 2030 just to absorb new entrants. AGOA’s manufacturing provisions generated real employment in select countries, but the scale required is categorically different. Any credible commercial framework must treat job creation as an explicit design criterion, centering on sectors with high labor absorption—light manufacturing, services, and the digital economy—rather than leaving employment gains as residual benefits.

Second, there is recognition of growing complexity, speed, and the need for coordination. Trade preferences address tariff barriers but leave a broader set of constraints on business access untouched. Standards compliance, regulatory complexity, trade finance, asymmetries between U.S. buyers and African small- and medium-sized enterprises, digital payment systems, and other factors represent frictions that duty-free access alone does not eliminate. A serious business access agenda requires a more holistic approach that includes investment facilitation, standards harmonization support, insurance and loan guarantees, and bilateral regulatory engagement, among other measures. Programs such as Prosper Africa the opportunities that arise when coordinated resources and engagement are mobilized. At a minimum, lessons from those experiences can provide a framework to spur thinking about future alternatives.

Finally, as African counterparts recognize and regularly point out, a significant, but not the only, structural bottleneck is capital. Insufficient capital limits the ability to turn market-access opportunities into competitive exports. AGOA was a market-access tool, not a finance instrument, and the combination of risk-averse private capital markets and limitations to public investment has left a significant gap. The U.S. International Development Finance Corporation (DFC), Millennium Challenge Corporation (MCC), Export-Import Bank of the United States (EXIM), and U.S. Trade and Development Agency (USTDA) represent meaningful instruments, but their deployment to Africa has been modest relative to the scale of the opportunity and the competition.

Toward New Thinking

Taken together, these trends suggest that Washington needs to expand the focus and scale of its commercial ambitions with African partners. African governments are not waiting for the outcome of AGOA’s modernization to determine their trade strategy, nor will AGOA’s two-year extension alone be the solution. African countries are pursuing continental integration, diversified partnerships, and tools such as alternative payment systems, regardless of the United States’ ultimate engagement.

While AGOA produced real gains in certain sectors and countries, the data suggest that ensuring a relevant, expanding commercial partner requires a trade preference program embedded within a broader framework of investment and trade facilitation. Washington needs to reckon honestly with the fact that African countries are building a trade future, in part, on their own terms.

The United States has the opportunity to build on institutions, tools, and learning to facilitate new trade partnerships. Trade preferences and market access are certainly part of the solution. However, what is needed, ultimately, is a broader framework that reflects where African integration is actually headed and how U.S. commercial and investment partnerships can advance it. The DFC, MCC, USTDA, and EXIM, among other institutions and mechanisms, remain strong instruments for trade, investment, and finance. What has been missing is the political coordination and sustained commitment to deploy them at the scale the moment demands. The question now is whether the United States can take this opportunity to build the relationship that the next quarter century requires.

Oge Onubogu is director and senior fellow of the Africa Program at the Center for Strategic and International Studies (CSIS). Aaron Stanley is deputy director and fellow of the Africa Program at CSIS.