Turning the threat of AGOA Withdrawal into an opportunity for trade diversification

The United States Government’s announcement on November 2, 2026 of its intention to terminate Rwanda’s participation in the African Growth and Opportunity Act (AGOA), effective January 1, 2027, presents a challenge to Rwanda’s export sector but also an opportunity to accelerate trade diversification and economic transformation. The decision does not mean that Rwandan goods will be banned from entering the US market or that bilateral trade will end. Rather, qualifying Rwandan products may lose preferential tariff treatment and become subject to ordinary US customs duties. Rwanda should therefore continue diplomatic engagement with the United States while preparing businesses for the possible withdrawal. Understanding Rwanda’s AGOA exposure According to UN trade data, Rwanda’s exports under AGOA declined from $5.25 million in 2021 to approximately $4.08 million in 2023, representing a decrease of 22.3 per cent. Compared with Rwanda’s $3.001 billion in merchandise export revenues in the 2024/2025 fiscal year, the 2023 AGOA figure represents approximately 0.14 per cent. Although the direct national-level exposure appears relatively small, this does not reflect all Rwandan exports to the US. US imports from Rwanda were approximately $43 million in 2025. The potential impact could nevertheless be significant for individual exporters, particularly those dependent on American buyers. Higher tariffs could increase costs, reduce profit margins, lead to contract renegotiations, decrease orders and threaten employment. Rwanda therefore needs a company-level assessment to identify affected products, businesses, contracts, workers and investment. AGOA provides eligible African countries with preferential access to the US market. Losing eligibility would remove these preferences but would not prevent trade from continuing. The actual impact will depend on the ordinary tariff applicable to each product. Exporters must verify their Harmonized Tariff Schedule (HTS) classifications, applicable duties and contractual responsibilities with US importers. Importantly, the withdrawal does not automatically affect Rwanda’s imports from the United States, which will continue under applicable Rwandan and East African Community customs arrangements. Trade diversification route Rwanda should strengthen regional integration through the East African Community (EAC), COMESA and AfCFTA while recognising regional political and security challenges. Although the Democratic Republic of Congo has historically been an important trading partner, insecurity in eastern DRC has disrupted commercial activities and created transport, payment and security risks. Burundi also presents accessibility challenges due to political and border constraints. Uganda, Kenya and Tanzania offer opportunities for agricultural products, processed foods, manufactured goods and services. However, businesses must assess actual demand, competition, logistics, product standards and payment conditions before redirecting exports. Beyond Africa, potential markets include China, the United Arab Emirates, the Netherlands, Germany and the United Kingdom. Coffee, tea, horticulture, processed foods and manufactured products could benefit from targeted market development. Nevertheless, these destinations must be evaluated based on verified demand and commercial feasibility. What next? Government institutions should identify AGOA-dependent exporters, verify product-specific tariffs, support contract renegotiations, continue diplomatic engagement with the US and provide trade-finance assistance to viable businesses. Exporters should not abandon the American market without assessing whether they can remain competitive. In the medium term, Rwanda should identify two or three realistic alternative markets for each priority export product, strengthen business-to-business partnerships, support SMEs in obtaining international quality certifications and improve access to export finance. Alternative regional transport corridors should also be assessed. For the long term, Rwanda should prioritise domestic value addition through processing, packaging, branding and product development. Investment in competitive manufacturing, ICT-enabled services, skills, affordable energy, logistics, standards infrastructure and export-oriented industries will strengthen productivity and competitiveness. More importantly, a national export diversification programme should establish clear targets, institutional responsibilities, financing arrangements and measurable indicators. These should include export values, affected businesses, new markets, domestic value addition, employment, export concentration and transport costs. Regular monitoring of international trade policies, regional security and logistical challenges will ensure evidence-based decisions. The proposed AGOA withdrawal is not the end of Rwanda–US trade but a call to strengthen economic resilience. Rwanda must protect existing exporters, pursue diplomatic engagement, diversify markets realistically and increase domestic production and value addition. Ultimately, sustainable resilience will depend not simply on finding alternative markets but on building a competitive, productive and diversified economy capable of supplying quality goods and services to international markets. The objective should be to transform the immediate challenge into an opportunity for long-term economic transformation. The writer is an economist and markets system development expert.

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Turning the threat of AGOA Withdrawal into an opportunity for trade diversification