The clock is officially ticking on the Africa Growth and Opportunity Act (AGOA), and uncertainty about the trade preference program’s future is already eroding U.S. imports from sub-Saharan African (SSA) nations.
Office of Textiles and Apparel (OTEXA) data from April revealed a concerning trend: imports from AGOA beneficiary countries decreased by more than 23 percent in value and nearly 22 percent in quantity compared to the same period last year. Just 1.7 percent of all U.S. global apparel imports came from AGOA members in the first four months of this year, down from 2 percent during the first four months of 2023.
By contrast, with U.S. imports from China cooling off, 2023 saw Asian suppliers gobbling up market share. Vietnam, Bangladesh, India, Indonesia and Cambodia are picking up China’s slack; collectively, the five countries accounted for 43 percent of U.S. apparel imports last year.
With those stats as a backdrop, Dr. Sheng Lu, professor and director of graduate studies in the Department of Fashion and Apparel Studies at the University of Delaware, said Africa’s opportunity for growth into a leading apparel sourcing hub hinges on the swift and long-term renewal of AGOA.
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In a study released this week, Lu analyzed the region’s capabilities and capacity to take on more apparel sourcing from Asia as China continues to shed market share. “The SSA region was often regarded as one of the most popular alternative sourcing destinations thanks to its large population, relatively low labor costs, and shorter shipping distance to U.S. ports compared to most Asian [sourcing hubs],” he wrote.
But despite the U.S. government’s aim to boost trade with Africa through the creation of AGOA 24 years ago, growth has been slow-going. The trade deal, which allows a multitude of products from nearly three dozen sub-Saharan African countries to enter the U.S. duty free, creates substantial financial incentives to source from members, but “empirical trade data shows that U.S. apparel imports from SSA members have stagnated over the past decades without evident growth,” the report said.
The reasoning for that is multifaceted. The academic examined 10,000 apparel SKUs—half from SSA countries, and half from Asian suppliers—and noted stark differences in the characteristics of the products available.
According to Lu, the results showed that U.S. fashion companies tend to source “simple and basic apparel categories containing African cultural elements and targeting the luxury and premium market segment” from Africa, like knitwear, T-shirts and slacks. More established apparel sourcing countries in Asia, by comparison, are able to produce everything from low-cost mass-market clothing to luxury goods, outerwear, swimwear and activewear.
Additionally, U.S. apparel imports from SSA countries were mostly made with cotton and polyester, while Asian imports were much more diverse, containing fiber types ranging from nylon to rayon, viscose, wool and recycled textiles.
“Theoretically [SSA suppliers] should have no problem with textile raw materials, because the AGOA rules of origin are very liberal; developing countries there can use the third-country fabric rule, which means they can really import materials from anywhere in the world,” Lu told Sourcing Journal Monday.
But in practice, liberal rules of origin haven’t solved the “fabric access problem” for African nations looking to produce apparel. “If you cannot make them locally, you have to rely on importing all these raw materials—it’s not practical in the end, and it can be extremely costly, both in terms of production costs and time,” he added.
Complex products like outerwear incorporate highly technical fabrics and components, and importing all those parts and pieces is a near impossibility for many African producers. Advanced materials can also require different machinery and assembly techniques than SSA producers are equipped to provide. “Unlike Asia or even compared to Central America, the labor force in Africa needs more training and more skill sets to engage in making more sophisticated products.”
According to Lu, liberal rules of origin simply can’t, and won’t, supersede the need for AGOA members to develop their own textile manufacturing capabilities. “Without a robust local textile manufacturing sector, SSA countries would encounter significant challenges in diversifying their product offerings to include more complex and versatile clothing categories,” he believes. The research also suggests that building a more verticalized supply chain in SSA could be a boon to business, helping African nations become more nimble and cost-competitive.
That’s where AGOA reenters the chat. “When we’re talking about AGOA, it’s not just about offering the duty free benefits, it’s about giving an assured business environment that can drive more investment to be made into the region,” Lu said. “These investments can be in building new production capabilities, sourcing capabilities, or the commitment of sourcing orders from the region.”
U.S. companies are unlikely to continue to invest in building out the SSA supply chain—or commit to purchasing from AGOA members for their forthcoming collections—if they’re not sure whether the preference program will exist in 15 months, he believes.
AGOA may not be a perfect program—there have been rumblings about the need for revisions to social and environmental standards, for example—but without it, the region is sure to falter in its mission to become an apparel sourcing hub for the Western world, Lu said. He would like to see the trade law renewed for a longer period—say 20 years. “The more we can create a stable and foreseeable market outlook, the more likely we can drive more needed investment to the region,” he added.
Those that are skeptical of AGOA’s efficacy need look no further than Ethiopia. The country, which saw its AGOA eligibility rescinded in 2022, has seen its exports to the U.S. market drop precipitously since then. American apparel imports from Ethiopia took a nosedive in 2024, dropping 40 percent from last year.
At U.S. Senate Committee on Finance hearing last week, lawmakers discussed the revitalization and renewal of trade preference programs like AGOA, with witnesses making the case for its swift renewal.
Melissa Nelson, general counsel and corporate secretary for Washington-based SanMar Corporation, told Senate leaders that more than 10,000 U.S. and SSA jobs tied to the company’s products rely on the program’s continuation. Last year, SanMar imported more than 58 million pieces from AGOA countries to be finished in the U.S.
“If you look inside the label of one of our shirts there’s a good chance that would say made in Ghana or made in Madagascar, but the vast majority of the value of that shirt is created in the United States—and it all depends on having access to AGOA.”
Nelson said building a supply chain in SSA has taken much time and investment from SanMar, underscoring the need for a long renewal period. “The product development cycle when sourcing from even an established factory in these countries is close to 18 months, and with the program set to expire next September, we are already within that window and making business decisions with the expiration date in mind,” she said.
“There is so much potential in vertical integration, but companies are hesitant to invest when the benefits of AGOA could expire before a return on investment,” she added. “The region has phenomenal potential, but businesses need the stability of a long term renewal to create a sustainable manufacturing base.”