Why Is Renewing AGOA Strategic for U.S.-Africa Minerals Diplomacy

Critical Questions by Gracelin Baskaran

Published September 3, 2025

The African Growth and Opportunity Act (AGOA), first signed into law by President Bill Clinton in 2000, is a unilateral U.S. trade preference program set to expire in September 2025. Its pending reauthorization has sparked debate over whether-and how-it should be extended and reformed. A failure to extend AGOA could have larger ramifications at a time when the United States is doubling down on its commercial diplomacy-and more specifically, its mineral diplomacy efforts-with Africa.

Q1: What is the strategic role of AGOA nations in reshaping critical mineral supply chains?

A1: There are 33 African countries eligible to participate in AGOA. Many of these countries-such as the Democratic Republic of the Congo (DRC), Madagascar, Malawi, Mauritania, Mozambique, Namibia, South Africa, Tanzania, and Zambia-are among the world's most well endowed with critical minerals.

In fact, five of the world's top fifteen destinations for rare earths exploration in the past year were AGOA beneficiaries: South Africa, Malawi, Uganda, Tanzania, and Angola. Together, they have roughly 50 high-grade rare earths deposits. Moreover, Madagascar, Mozambique, and Tanzania cumulatively hold graphite reserves on par with China's, even though China accounted for 77 percent of global graphite output in 2023. According to internal calculations, AGOA beneficiary countries also hold 70 percent of the world's manganese, 89 percent of the world's platinum group metals, 54 percent of cobalt, 23 percent of graphite, and 10 percent of copper. Much of this resource wealth remains untapped, underscoring the vast potential for deepening U.S.-Africa supply chain partnerships in critical minerals. The U.S. International Development Finance Corporation (DFC) has financed-or is preparing to finance-mineral projects in a number of AGOA countries, including Angola, Mozambique, Tanzania, and Zambia.

Q2: What is AGOA's impact on critical minerals supply chains?

A2: AGOA offers limited tariff advantages to the mining sector, since most minerals already face relatively low tariffs. Its real value lies in the realm of soft power. In June 2025, China announced that it would expand market access by removing tariffs on all imports from 53 African nations. If the United States were to let AGOA expire and reimpose tariffs on African exports, it would send a damaging signal about the future of U.S. commercial diplomacy on the continent. When African governments see comparable opportunities from both the United States and China in the mining sector, they will be more likely to lean toward Beijing.

Q3: Why is renewing AGOA crucial for building long-term minerals diplomacy?

A3: AGOA is important for building commercial diplomacy. While mining generates significant revenue, it is not a major source of employment. Compared to sectors like manufacturing, agriculture, or services, mining has a much lower labor multiplier. Modern operations are highly mechanized, relying more on advanced technology and machinery than on large workforces. The jobs that are created are typically specialized-geologists, engineers, and metallurgists-limiting wider employment opportunities. Yet Africa urgently needs large-scale job creation, as its population of 1.4 billion is expected to grow to 2.5 billion by 2050. Mining alone is not positioned to meet this demand.

By contrast, AGOA has supported the expansion of more labor-intensive industries, such as textile manufacturing and agriculture. Namibia illustrates this potential. With more than 7.7 million cattle, sheep, and goats, its livestock sector is substantial. After spending 15 years working to meet stringent safety and logistical standards, Namibia became the first African nation to export beef to the United States in 2019. Exports reached 860 tons in 2020 and are projected to grow to 5,000 tons by 2025. Namibia's Meatco has significantly benefited from duty-free access to the U.S. market through AGOA. Given the infancy of the beef export relationship with the United States, a disruption to AGOA could risk its sustainability and undermine capital investments within the sector.

Sustaining a positive economic relationship with Namibia is key to advancing minerals diplomacy, particularly given its significant mineral wealth. The country is home to the world's fourth-largest uranium reserves-resources that could support the U.S. nuclear renaissance. Today, Namibia hosts three active uranium mines-Rössing, Husab, and Langer Heinrich-all of which have significant Chinese ownership through entities such as the China National Uranium Corporation, China General Nuclear Power Group, and the China Africa Development Fund. The Lofdal heavy rare earths project, partly owned by Japanese investors, produces around 2,000 tons of rare earth oxides annually and contains some of the world's most valuable heavy rare earth metals. In addition, Namibia is on track to become Africa's third-largest lithium producer by 2026.

Namibia's vast resource base, combined with its reputation as one of Africa's most politically stable and well-governed nations, positions it well to develop a growing industrial processing ecosystem. But allowing AGOA to lapse would deal a serious blow to Namibia's labor-intensive beef industry and could undermine future U.S. minerals diplomacy in this resource-rich nation, further ceding ground to China.

Zambia is another important jurisdiction for minerals diplomacy. In the last few years, the U.S. government opened its first-ever Commercial Service Office at the U.S. Embassy in Lusaka and launched a Tripartite Alliance with Zambia and the DRC to advance raw material extraction, processing, and battery manufacturing. The DFC has also provided support to a U.S. company developing one of Zambia's largest copper projects.

Deepening minerals diplomacy will depend on strengthening the bilateral economic relationship. Interviews with Zambian stakeholders reveal mounting frustration among voters that the mining sector is failing to deliver meaningful benefits to the population. Zambia's heavy reliance on copper as its dominant export, coupled with limited economic diversification, has left the country highly exposed to commodity price swings. Expanding U.S. investment into other industries, such as agriculture, textiles, and manufacturing, could ease pressure on the mining industry while simultaneously strengthening Zambia's broader economy and employment generation efforts. Such diversification would generate shared benefits, improve public perceptions of mining, and lessen the risk of abrupt policy shifts that complicate operations for U.S. firms. The tax benefits derived from AGOA are an important investment incentive. In 2022, 55.3 percent of Zambia's exports to the United States went through AGOA, making its renewal vital to sustaining U.S.-Zambia commercial diplomacy.

More broadly, the expiration of AGOA would likely prompt many African countries to reassess their economic diplomacy strategies. Without preferential access to the U.S. market, governments may find it more attractive-or even necessary-to expand commercial and strategic partnerships with China, which has already established itself as the dominant player in Africa's trade, infrastructure, and minerals sectors. In the critical minerals space in particular, Beijing's willingness to provide financing, infrastructure, and guaranteed offtake agreements could accelerate African alignment with Chinese interests, potentially sidelining U.S. efforts to build resilient, diversified supply chains.

Q4: Is AGOA congruent with the Trump administration's Africa approach?

A4: It is. Since 2016, U.S. policy toward Africa under the Trump administration has placed a strong emphasis on commercial diplomacy, with critical minerals at the forefront. A major step came in 2018 with the creation of the DFC, which made its first equity investment in the critical minerals sector the following year. In 2023, a review was undertaken of the effectiveness of the President's Advisory Council on Doing Business in Africa (PAC-DBIA), an initiative launched during the Obama administration with the mandate to advise the U.S. president, through the commerce secretary, on strategies to expand the United States' commercial engagement across Africa. The review found that the Trump administration convened more PAC-DBIA meetings than either Obama or Biden.

Since returning to office, Trump's Africa policy has been characterized by senior officials emphasizing business and trade over aid. U.S.-Africa engagement has increasingly focused on critical minerals. One major initiative has been a "minerals-for-security" proposal in which President Félix Tshisekedi offered the United States access to the Democratic Republic of the Congo's resources in exchange for security support. Following negotiations in Washington and Doha, the DRC and Rwanda signed a peace agreement in Washington, D.C., on June 27, 2025. Attention is now turning to advancing mineral cooperation and broader regional economic integration. In July 2025, the DFC approved financing for two critical minerals projects in sub-Saharan Africa. According to its announcement, these investments are intended both to spur regional development and to strengthen U.S. critical mineral supply chains vital for energy, defense, and advanced technologies.

The challenge for the Trump administration is balancing AGOA, which is a unilateral trade preference program, with its strong preference for more bilaterally beneficial economic statecraft instruments.

Q5: What could AGOA 2.0 look like?

A5: AGOA can become more bilaterally beneficial. Linking a unilateral trade preference program with a mining investment incentive could significantly boost capital flows into Africa's mining sector. Such a framework could unlock greater capital flows into Africa's mining sector, while ensuring that off-take agreements from new projects are secured with the United States and its allies.

A useful precedent for an investment incentive came from the Inflation Reduction Act's Section 30D tax credit, which offered up to $7,500 for the purchase of a new electric vehicle if its batteries met specific sourcing requirements for critical minerals and manufacturing. To qualify for the minerals portion of the credit, a portion of the battery's mineral content had to be extracted or processed in the United States or a country with a U.S. free trade agreement (FTA). This enabled graphite mined in Mozambique to qualify, since it was processed in Louisiana-yielding benefits to Mozambique's economy while strengthening graphite security for the United States.

Although the 30D provision was recently eliminated, future tax incentives of this kind could be powerful tools to attract mineral investment in AGOA-eligible countries, with the extracted resources routed to the United States or allied partners for processing. The incentive should be industry agnostic, so minerals sourced for defense, semiconductors, and energy would be eligible for the incentive. However, in the meantime, ensuring AGOA's renewal without interruption is essential to signal the strength and continuity of the U.S.-Africa economic relationship.

Gracelin Baskaran is director of the Critical Minerals Security Program at the Center for Strategic and International Studies in Washington, D.C.

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