MBABANE – South African goods could flood shops in Eswatini if the United States withdraws the neighbouring country from a preferential trade programme.
Economist Thembinkosi Dube said the move could leave South Africa with excess goods previously destined for overseas markets, some of which could find their way into Eswatini.
His comments follow reports that the United States intends to remove South Africa from the African Growth and Opportunity Act (AGOA), a programme that provides qualifying sub-Saharan African countries with preferential access to the United States market for eligible products.
Dube said South Africa could face an oversupply of goods if it lost access to the US market under the programme.
He said Eswatini could consequently experience an influx of South African products in local shops.
However, he indicated that the situation might be temporary, depending on whether South Africa secured alternative export markets.
“Maybe for six months or 12 months we might see these commodities that they were shipping flooding the market,” he said.
Dube said the potential impact would not be limited to Eswatini, as other countries importing goods from South Africa could experience similar developments.
He said Eswatini’s reliance on South African imports meant that changes in the neighbouring country’s export markets could affect local businesses and consumers.
“Most of these shops in Eswatini are mostly owned in South Africa and definitely we are going to have an impact as a country,” he said.
Dube said an increase in the supply of South African goods could also lead to lower prices for similar products and substitutes in Eswatini.
He explained that, under normal market conditions, increased supply could put downward pressure on prices.
The potential price reductions would, however, depend on whether the goods previously destined for the United States were redirected to Eswatini and subsequently sold in the local market.
On the other hand, University of Eswatini Economics Lecturer Sanele Sibiya said South Africa’s possible exclusion from AGOA could bring investment and jobs to Eswatini, but also threaten its economy.
He said the country’s close economic ties with South Africa meant any disruption to its neighbour’s trade with the United States could have consequences for local businesses.
However, he said Eswatini could also benefit if South African companies moved some of their production to the Kingdom to retain preferential access to the American market.
Sibiya said South Africa’s exclusion would not necessarily have a direct impact on Eswatini because the two countries belonged to the Southern African Customs Union (SACU).
“South Africa getting kicked out of AGOA does not have any direct impacts for the Kingdom,” he said.
He explained that SACU operated a common external tariff for goods entering the customs union, while member countries could negotiate export arrangements with other trading partners.
However, he warned that South Africa’s dominant position within SACU could complicate negotiations between smaller member countries and the United States.
According to Sibiya, difficulties could arise if the countries were required to negotiate reciprocal tariff arrangements with the US while maintaining their common customs arrangements.
He said disagreements over these arrangements could disrupt regional trade and affect smaller economies, including Eswatini.
Despite these risks, Sibiya identified a potential opportunity for Eswatini to attract companies seeking continued access to the American market.
He said businesses that previously exported goods from South Africa under AGOA preferences might consider relocating production to countries that remained eligible.
Eswatini could be among the destinations considered, particularly by South African companies already operating in the Kingdom.
However, Sibiya cautioned that retaining AGOA eligibility would not, on its own, guarantee investment.
He said companies would have to compare the cost of producing and transporting goods from Eswatini with the cost of continuing to export from South Africa under any new tariff arrangements.
If production and transport costs in Eswatini were too high, relocating operations might not make commercial sense.
“Hence competitiveness is a critical factor in attracting this investment,” he said.
His assessment suggests that the country’s ability to benefit would depend on whether manufacturers could operate profitably while meeting the requirements for preferential access to the US market.
Sibiya also raised the possibility that South African multinational companies already operating in Eswatini could increase local production rather than establish entirely new factories.
He said this could support exports, economic growth and employment in the short term.
However, he cautioned that such gains might not last. Sibiya said political developments in the United States could influence how businesses responded to South Africa’s possible exclusion.
He pointed to the US midterm elections and the possibility of future changes in American trade policy.
According to the economist, companies might hesitate to move factories or invest in new production facilities if they believed South Africa’s exclusion from AGOA could be reversed.
He said the uncertainty could discourage businesses from making costly relocation decisions.
Sibiya also identified China as a possible alternative market for South African exporters. He said market-access arrangements involving China could allow some South African producers to redirect exports rather than relocate production to another country.
However, the extent to which exporters could take advantage of such arrangements would depend on the applicable trade conditions and their ability to secure buyers.
If South African businesses found alternative markets, the incentive to shift production to Eswatini could diminish.
Sibiya warned that the greater risk for Eswatini would arise if South African exporters failed to find replacement markets and the country’s economy weakened.
South Africa is Eswatini’s major trading partner, making developments in its economy important to local businesses.
He said weaker economic activity in South Africa could reduce demand for goods from Eswatini, affecting domestic production and economic growth. His assessment presents two possible outcomes for the Kingdom.
The proposed withdrawal comes after the United States confirmed its intention to terminate South Africa’s eligibility for AGOA from January 1, 2027.
As previously reported by the Times of Eswatini, US Trade Representative Jamieson Greer said President Donald Trump had notified Congress and the governments of South Africa and Rwanda of the proposed move.
The US administration cited barriers to American trade and investment, corruption and national security and foreign policy concerns among the reasons for its position on South Africa.
The development comes against a background of close trade relations between Eswatini and South Africa.
In December 2025, the Times of Eswatini reported that an Eswatini Investment Promotion Authority (EIPA) study had identified South Africa as the destination for 89 per cent of Eswatini’s textile exports, while the United States accounted for 7 per cent.
The study also reported that the textile and apparel industry supported approximately 20 000 jobs.
In October 2025, this publication reported that Minister for Commerce, Industry and Trade Manqoba Khumalo had expressed optimism about Eswatini’s position amid uncertainty over AGOA.
Khumalo said Eswatini’s comparatively favourable tariff position could attract businesses seeking access to the American market.
He also disclosed that Eswatini’s exports under AGOA had reached approximately E1.2 billion in 2024, with apparel accounting for most of the value.
Separately, the Times reported a World Bank warning that changes in global trade policies could affect Eswatini’s textile and apparel industry through higher costs, disrupted supply chains and weaker export demand.
