What Nigeria failed to learn from AGOA

With the African Growth and Opportunity Act (AGOA) now expired (on September 30), Sub-Saharan Africa is taking stock of its gains. For Nigeria, however, the picture is sobering: despite being the second-highest earner from the trade pact over its 25-year period, the nation’s export strength remains heavily reliant on its divinely endowed liquid resource.

“Africa had a lot of gains from AGOA. Some nations utilised it, Nigeria didn’t,” said Obiora Madu, an export consultant in Nigeria for over 30 years.

When the United States introduced the non-reciprocal trade pact, the idea was to strengthen trade relations with Sub-Saharan Africa by granting duty-free access to some 6,800 products from the region. The opportunity would allow African countries to expand their manufacturing base and diversify exports beyond raw materials. And some countries did.

“So many African countries were making money from textiles, apparel, arts, crafts, manufacturing,” Madu said, referencing countries such as South Africa, Kenya, Lesotho, Madagascar, and Mauritius, which developed strong textile and apparel, automotive, and agricultural industries through AGOA, improving their supply chains and international market competitiveness.

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Though Nigeria qualified for the same incentives, it made limited use of them. Records show the country was the second biggest revenue beneficiary of AGOA. Still, its export profile remained concentrated in crude oil, which already benefitted from low ‘most favoured nation (MFN)’ rates. So, for a quarter of a century, only small volumes of agricultural and semi-processed products such as cocoa, ginger and cashew entered the U.S. market from Nigeria.

“Look at Nigeria’s figure, 90 percent plus of it is oil. Yes, it could be one of the items in the figures covered under AGOA, but it was not part of the reason AGOA was set up,” Madu further said.

From 2022 to 2024, Nigeria earned approximately $5.4 billion from exports to the U.S. However, 90 percent of the revenue came from energy-related products, for which only 48 percent entered the U.S. under AGOA, according to official U.S. trade statistics. Ghana fared better.

“A certain company in Ghana makes only stockings, The firm manufactures the stockings and send them to the U.S.,” Madu noted.

In Lesotho, where the natural resource is abundant, apparel manufacturers have utilised AGOA to build one of the largest textiles and garment manufacturing industries in sub-Saharan Africa. The industry contributes approximately one-thirds of the country’s GDP and employs about 40,000 workers. Madagascar’s textile and apparel industry provides employment for nearly 60,000 people.

“Nigeria has Aso Oke (a hand-woven ceremonial cloth of the Yorubas). Imagine if we exported that.” Madu added.

A part of Nigeria’s underutilisation problem, manufacturers say, is a general lack of knowledge on the proper utilisation of AGOA for non-oil exports, coupled with tedious procedures.

“Getting the documentation correct was a great upheaval on its own,” said Benedict Obhiosa, executive secretary of the Manufacturers Association of Nigeria Export Group (MANEG), who added that the number of trained and certified AGOA experts is not nearly enough.

“I am an AGOA advisor, but I got trained and certified less than two years before the scheme expired,” Obhiosa said. He blamed the authorities for ‘hoarding’ the knowledge and skills needed to maximise the scheme.

“Even during sensitisation, people were not fully taught and materials were not openly shared with participants. As this was the case, most willing manufacturers could not take advantage of the scheme to penetrate the American market,” Ben said.

But knowledge is only half the equation. Madu said Nigeria does not have a ‘solid export culture’ to meet international standards and get ahead of the competition.

“You need to bring down the cost of doing business. You need to be competitive in the market. We lack all these,” he said.

If AGOA is to be revived, he said, sensitising the manufacturers will be the ‘first, second, and third thing’ to do for Nigeria to be able to take advantage of the scheme. Yet, Madu said Nigeria should ‘not yearn for it’ until operational costs drop and the country builds up local production.

“At a certain point in the season, local prices of some commodities are higher than the international market prices. Is that how we are going to benefit from those international opportunities?” he asked.

When Jumoke Oduwole, Nigeria’s trade minister, was asked by international media about the prospects of a trade future with the U.S. shortly after it put a 15 percent tariff on the country, she expressed no worry, noting that “there are other markets.”

But Nigeria is repeating AGOA’s mistakes elsewhere.

Read also: Non-oil sector contributes 95.9% as GDP rise to 4.23% in Q2

In 2023, the United Kingdom launched the Developing Countries Trading Scheme (DCTS), erasing duties on over 3,000 primary and semi-processed products from Nigeria and 36 other countries.

The Nigeria-British Chamber of Commerce (NBCC) said that 99 percent of Nigeria’s non-oil export products qualify for this free-tariff status. However, the results have been largely underwhelming, with crude oil still bringing in the bulk of Nigeria’s FX revenue from the UK, amid declining exports.

While existing data conflict, both official sources seen by BusinessDay acknowledged a decrease in Nigeria’s exports to the UK since 2023.

“For me, it is a function of multiple factors. There are other trading partners in the game like India. which have equally signed preferential trading agreements with Britain. So there is a lot more competition in the market today,” said Ray Atelly, who was the president of the NBCC when the scheme took off.

“This means that with or without DCTS, our non-oil export volumes would drop if we do not take counter measures in a rapidly evolving global market.”

Atelly said that “until local production increases significantly, it may be difficult for farmers to be convinced to go through the rigours of exporting to the United Kingdom, when they easily sell in the local markets and regularly bank impressive proceeds,” Atelly told BusinessDay.

He noted that Nigeria must meet local demand for listed items such as cashew nuts, yam, palm oil, plantain, cotton, tomatoes, and seafoods before thinking of exporting.

The farmer must also feel safe, as fleeing farmers means fleeing profits, which worsens food inflation and raises local prices. “This whittles down the incentive that export offers farmers,” he said

Nigeria, according to Oduwole, is pursuing its “integration strategy across Africa with the African Continental Free Trade Agreement (AfCFTA).”

Exports to Africa rebounded in the second quarter (Q2) of 2025, after a decline in the first quarter (Q1) when Nigeria’s exports to African dropped by N2 billion from the fourth quarter (Q4) of 2024.