Malawi retains eligibility for US Agoa trade preferences

The Malawian government has announced that the country has retained its eligibility for preferential access to the United States market under the African Growth and Opportunity Act (Agoa) in 2027. This development comes as 19 African countries, including Zimbabwe, South Africa, Uganda, Burundi, and Rwanda, face exclusion from the trade programme.

According to the Ministry of Industrialisation, Trade, Business and Tourism, Malawi intends to utilise its continued eligibility to support export diversification, value addition, and manufacturing growth. The ministry's spokesperson, Patrick Botha, expressed optimism that the country will maximise this opportunity through enhanced collaboration with the private sector and close working relationships with relevant ministries, departments, and agencies.

Data from the past 23 years show that Malawi is ranked 15th among 35 eligible African countries in Agoa preference utilisation. Since the programme's inception in 2000, Malawi has exported goods worth approximately $1.55 billion to the United States. The country's exports to the US primarily comprise agricultural commodities, including tobacco, sugar, tea, and nuts.

The Malawi Confederation of Chambers of Commerce and Industry's business environment director, Lucky Mfungwe, noted that countries excluded from Agoa will experience reduced export performance, foreign exchange earnings, employment, and economic activity. However, Mfungwe also stated that Malawi can increase its exports to the US market through product diversification, value addition, and increased production capacity.

To achieve sustained export growth, Mfungwe emphasised the need for investment in agricultural modernisation, irrigation, agro-processing, energy generation, transport, and logistics infrastructure. He stressed that realising these opportunities depends on Malawi's ability to substantially increase its productive capacity and develop resilient and efficient production systems capable of withstanding various shocks.

Mfungwe also suggested that Malawi should pursue market diversification through the African Continental Free Trade Area, a market of over 1.3 billion people and $3 trillion in gross domestic product, to reduce reliance on preferential trade arrangements. Agoa was last renewed in 2015, and its future was uncertain due to significant changes in US trade policy concerning Africa and other regions.

Before the expiry of the trade pact in September 2025, Malawi's exports to the US were duty-free. The country's retention of Agoa eligibility is seen as a positive development, especially as it pursues increased production for export markets to narrow its trade deficit.

Key points

• Malawi retains Agoa eligibility, allowing for continued duty-free exports to the US market.
• 19 African countries, including Zimbabwe and South Africa, will lose access to Agoa preferences.
• Malawi aims to utilise its Agoa eligibility to support export diversification, value addition, and manufacturing growth.