Growth and Opportunity for Africa — The World Bank Africa Growth and Opportunity: Research in Action Conference

Florizelle Liser and Laird Treiber

No 11277, Policy Research Working Paper Series from The World Bank

Abstract: This paper examines whether the African Growth and Opportunity Act—the United States’ unilateral trade preference program for Sub‑Saharan Africa—has served as an effective instrument for development and what its modernization should entail. The study synthesizes 25 years of the African Growth and Opportunity Act experience using U.S. International Trade Commission and related trade statistics, complemented by sectoral and country case studies. The findings indicate that while overall U.S.–Africa two‑way trade remains modest ($48.7 billion in 2024, below its 2008 peak), the African Growth and Opportunity Act’s impacts have been more substantial in non‑oil sectors where tariff preferences are largest. In textiles and apparel—facing most favored nation tariffs of roughly 15-32 percent—the African Growth and Opportunity Act has supported more than 1 million formal jobs, with women comprising 75-90 percent of plant workforces in several countries. Regional value chains have deepened, notably in Southern Africa’s automotive industry, where South Africa’s African Growth and Opportunity Act–eligible auto exports (~$2.6 billion) integrate components from neighbors such as Botswana and Lesotho. Nonetheless, supply‑side bottlenecks, limited firm awareness, and uncertainty from time‑limited reauthorizations and annual eligibility reviews have constrained uptake. The policy implications are threefold: (i) reauthorize the African Growth and Opportunity Act on a long horizon to reduce uncertainty and encourage investment; (ii) align with the African Continental Free Trade Area by facilitating regional cumulation and considering inclusion of North Africa; and (iii) evolve toward a more reciprocal—but still preferential and development‑oriented—framework that couples market access with support to address logistics, standards, and competitiveness constraints.

Date: 2025-12-18
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