The African Growth and Opportunity Act (AGOA), America's flagship trade framework with Africa, is trapped in an outdated model designed for a different era and faces expiration on December 31, 2026, according to a new report from the Milken Institute. The report argues that while Congress created AGOA in 2000 with broad bipartisan support, the program "never fundamentally reshaped trade flows, unlocked major investments, or positioned America as Africa's economic partner of choice."
The report presents no specific utilization statistics or dollar figures for current AGOA performance, focusing instead on structural shortcomings. It identifies that AGOA remains "under-resourced and fragmented" without coordination across government agencies or alignment with strategic supply chains. The program expanded exports and jobs in several countries but suffered from inconsistent implementation, unfunded country plans, and declining US engagement over time. Financing for American small and medium-sized enterprises investing in Africa remains "effectively nonexistent," according to the analysis.
The report finds that "trade preferences alone cannot drive industrial transformation" and criticizes AGOA for being "oversold." The authors argue that "the United States cannot build resilient supply chains, compete with China, or expand American manufacturing without a stronger economic partnership with Africa." They note that while "China understood long ago that Africa would shape future supply chains," Washington is only beginning to respond. The report emphasizes that uncertainty undermined impact through "short reauthorizations, annual eligibility reviews that removed eligibility after large US investments had been made, and shifting interpretation of criteria" that discouraged investment.
The failures stem from AGOA's design as a passive preference system rather than an active partnership, the report explains. The program wasn't reinforced with complementary tariffs on third countries or combined with investment incentives and financing. African countries with raw materials for apparel, for instance, overwhelmingly import those inputs rather than developing domestic capacity. The report points to current US engagement on critical minerals as proof that targeted sectors, coordinated agencies, dedicated resources, and political accountability can work. Without these elements, AGOA became what the authors describe as a "development program on autopilot" rather than a strategic economic tool.
The report recommends transforming AGOA from unilateral preferences into an investment-led partnership focused on strategic sectors where opportunities exceed $1 billion over five years. Priority areas should include critical minerals and batteries, solar cells, pharmaceuticals, automotive parts, and apparel—industries where Africa has raw materials and nascent manufacturing capacity but China dominates supply chains. The authors propose a jointly capitalized $500 million AGOA Fund to provide financing under $5 million to US businesses entering Africa, modeled on the US-Ukraine Reconstruction Investment Fund. Eligibility would shift from annual reviews to multiyear status tied to clear benchmarks, and goods produced by Chinese-owned companies would lose AGOA benefits. The bottom line: "The next generation of global supply chains is being built now. America cannot afford to sit this one out."