Cape Town – South Africa’s strained relations with the United States could lead to its exclusion from the African Growth and Opportunity Act (AGOA), affecting industries like automotive manufacturing and citrus exports.
According to Daily Investor, Meryl Pick, head of equities research at Old Mutual, noted that while the loss of AGOA would be significant for specific sectors, its overall economic impact would be minimal, as South Africa’s reliance on the agreement has declined over the past decade.
“The policy had actually become far less relevant in the last decade than it was when it began,” the report quoted Pick as saying.
Beyond trade, the biggest concern is the impact on investor confidence.
Old Mutual’s Izak Odendaal warned that losing AGOA and potential US tariffs could cut South Africa’s GDP growth by up to 0.7 percentage points, with the Reserve Bank lowering its 2025 growth forecast to 1.7%.
This comes amid an ongoing confidence crisis, driven by political instability and policy uncertainty, which has hindered investment more than issues like power shortages or logistics failures.
Meanwhile, the Democratic Alliance (DA) leader and Minister of Agriculture John Steenhuisen has called on South Africa to explore new markets following the United States’ decision to impose a 30% tariff on the country’s exports.
Follow African Insider on Facebook, Twitter and Instagram
