Economy

MBABANE – Since the country attained AGOA status in 2000, Eswatini has made significant trade strides.

The African Growth and Opportunity Act (AGOA), signed into law by former US President Bill Clinton, enabled the kingdom to ship to the American market duty-free.

Trade statistics compiled by the USA Census Bureau reflect that Eswatini’s exports to the USA totalled US$1 969.442 billion since the year 2000. This is the equivalent of E35.442 billion in the current exchange rate.

In the year 2000, Eswatini shipped goods amounting to E946.8 million, according to trade statistics filed by the USA Census Bureau.

Most of the goods sold to the USA were textiles and apparel.

In its first year, the kingdom suffered a trade deficit. The United States managed to export goods to the Eswatini amounting to E1.207 billion.  It meant the US’s exports exceeded imports from Eswatini by E261 million ($14.5 million).

However, in 2001, the country began to export more than it imported from the USA, with goods reaching the sum of E1.170 billion. There was no trade deficit incurred in 2001 until 2014. Since 2014, the Kingdom’s imports from the USA have been exceeding the exports in monetary terms.

From 2002 to 2010, Eswatini’s exports to the USA were above $100 million (E1.8 billion).

The good years were 2004 and 2005 when monarchy’s exports totalled E3.580 billion and E3 578.40 billion, respectively. The figures were calculated using the current rate method.

According to the South African Reserve Bank, the US dollar has traded between a six- to eighteen-fold premium against the South African Rand (equivalent to the Lilangeni) from 2003 to 2025.

It must be said that September 30, 2025, marks yet another critical deadline for AGOA, which was last renewed in 2015 by the Barack Obama administration. It has been in effect for a total of 25 years since its inception in 2000 by the Clinton administration.

AGOA has been very pivotal to US-Africa trade relations. It may expire without a renewal at the end of this month.

In anticipation of this deadline, a bipartisan Bill, the AGOA Renewal and Improvement Act, was introduced by Senators Chris Coons (Delaware) and James Risch (Idaho) in April 2024 to extend the programme to 2041. Despite the introduction of this bipartisan Bill, the Australian Institute of International Affairs states that the fate of AGOA remains uncertain in the face of seismic shifts in American trade policy with Africa and the rest of the world. 

The Institute notes that the consequences of inaction on the Bill will be severe, undermining American economic influence, African development and shared geopolitical interests. 

Lesotho is in the same predicament as it depended heavily on AGOA, with ministers in that country nursing hopes that US President Donald Trump may renew the programme for a year.

Africa-US trade agreements

Meanwhile, the Office of African Affairs has been developing and coordinating USA trade and investment policy for the 49 countries of sub-Saharan Africa.

It leads the negotiation and implementation of USA trade and investment policies and objectives in the region. The administration seeks both to expand markets for USA goods and services in sub-Saharan Africa and to facilitate efforts to bolster African economic development through increased global, regional and bilateral trade.

Sub-Saharan Africa was considered as presenting many opportunities for USA businesses as an emerging market for American exports.

According to the International Monetary Fund (IMF), many of the fastest growing economies in the world are in sub-Saharan Africa.

By providing duty-free entry into the United States for almost all African products, AGOA has helped expand and diversify African exports to the United States, while at the same time fostering an improved business environment in many African countries through the application of eligibility requirements.

In 2015, the USA Congress extended AGOA through 2025. The Africa Office works closely with other USA agencies that support capacity building to increase utilization of the AGOA programme. The office is coordinating the US Government for the negotiation and implementation of the African Continental Free Trade Area.

Africa Trade Summary

According to the US Trade Representative (the Office of African Affairs), US goods and services trade with Africa totalled an estimated E1 888.20 trillion ($104.9 billion) in 2024, up 8.3 per cent ($8.0 billion) from 2023.

The office reported that USA total goods trade with Africa were an estimated E1.296 trillion ($72.0 billion) in 2024.  

It also revealed that USA goods exports to Africa in 2024 were E583 billion ($32.4 billion), up 12.9 per cent ($3.7 billion) from 2023.

The Office of African Affairs disclosed that USA goods imports from Africa in 2024 totalled E712.8 billion ($39.6 billion), up 2.7 per cent ($1.0 billion) from 2023.  

The office reported that USA goods trade deficit with Africa was E129 billion ($7.2 billion) in 2024, a 27.0 per cent decrease ($2.7 billion) over 2023. 

It said USA total services trade (exports plus imports) with Africa totalled an estimated E592.2 billion ($32.9 billion) in 2024.

According to the Office of African Affairs, USA services exports to the Africa in 2024 were E345.6 billion ($19.2 billion), up 11.4 per cent ($2.0 billion) from 2023.

It explained that the USA services imports from Africa in 2024 were E246.6 billion ($13.7 billion), up 9.9 per cent ($1.2 billion) from 2023.

The USA services trade surplus with Africa was E99 billion ($5.5 billion) in 2024, a 15.3 per cent increase ($724 million) over 2023.

It must be emphasised that since its enactment in 2000, AGOA has been at the core of USA economic policy and commercial engagement with Africa.

AGOA has been providing eligible sub-Saharan African countries with duty-free access to the USA market for over 1 800 products, in addition to the more than 5 000 products that are eligible for duty-free access under the Generalised System of Preferences (GSP) programme.

To meet AGOA’s rigorous eligibility requirements, the Office of African Affairs stated that countries must do the following –

• Establish or make continual progress toward establishing a market-based economy.
• The rule of law, political pluralism and the right to due process.

It is also required that countries eliminate barriers to USA trade and investment, enact policies to reduce poverty, combat corruption and protect human rights.

By providing new market opportunities, AGOA has helped bolster economic growth, promoted economic and political reform, and improved U.S. economic relations in the region.

It is said that 32 countries are eligible for AGOA benefits in 2024. In 2015, Congress passed legislation modernizing and extending the program to 2025.

The African Growth and Opportunity Act (AGOA), signed into law by former US President Bill Clinton, enabled the kingdom to ship to the American market duty-free. (Pic: Colorado Newsline)