South African President Cyril Ramaphosa has warned that losing preferential access to the United States market could have devastating consequences for the country’s economy, urging businesses to prepare for possible exclusion from a key African trade programme.
Ramaphosa said his government was exploring alternative export markets to cushion the impact of a potential withdrawal of South Africa’s benefits under the African Growth and Opportunity Act (AGOA), amid worsening relations between Pretoria and Washington.
AGOA allows eligible African countries to export certain goods to the US duty-free. The programme has been renewed by the US Congress until the end of 2028, but the extension still requires the signature of President Donald Trump.
South Africa, the programme’s largest beneficiary, faces uncertainty over its continued eligibility as concerns about its relationship with Washington intensify.
Ramaphosa acknowledged the potential economic consequences of losing the trade privileges, describing the impact as “devastating”. However, he urged South Africans not to panic, stressing the need for preparedness and efforts to diversify export destinations.
The automotive industry is among the sectors most exposed to the potential loss of preferential access, as South African vehicle manufacturers rely on duty-free entry into the US market to remain competitive.
Industry estimates suggest that approximately 86,000 jobs at vehicle manufacturers are directly linked to the trade arrangement, with the figure rising to about 125,000 when subcontractors are included.
The possible withdrawal of South Africa’s benefits therefore raises concerns about employment, export earnings and the broader performance of the country’s automotive sector.
Under the applicable timeline, any exclusion taking effect from January 1 would have to be announced by November 2.
The uncertainty has increased pressure on the South African government to secure continued access to the US market while developing alternative trade partnerships to reduce its dependence on the programme.
