Rwanda’s exporters could face higher costs and reduced competitiveness in the United States from January 1, 2027, following Washington’s decision to terminate the country’s eligibility under the African Growth and Opportunity Act (AGOA).
The decision means Rwandan products will lose preferential tariff treatment under the US trade programme, although they will remain eligible to enter the American market subject to applicable tariffs.
Washington cited concerns relating to trade and investment barriers, political pluralism, human rights and the rule of law, as well as Rwanda’s alleged involvement in the conflict in the Democratic Republic of Congo (DRC).
Senior Investment Attorney and Aims Capital managing partner Alloys Mutabingwa said the loss of preferential access would reduce the competitiveness of Rwandan exports.
“The goods will still be exported to the US market, but with tariffs,” Mutabingwa said.
He explained that additional tariffs could reduce exporters’ revenues and make their products less attractive to US buyers compared with goods from countries that retain preferential access.
Textiles and agricultural exports face potential pressure
The change could affect several export sectors, particularly textiles, apparel and agricultural products that benefit from AGOA preferences.
Mutabingwa said the overall economic impact could be limited because Rwanda conducts more significant trade with East African and other African markets than with the United States.
However, the loss of preferential access could also influence investment decisions. Rwanda may become less attractive to companies seeking to use the country as a production base for duty-free exports to the US, compared with other AGOA-eligible African economies.
Previous trade dispute highlights market risks
Rwanda’s latest AGOA setback follows a 2018 suspension of duty-free access for its apparel exports after Kigali restricted imports of second-hand clothing.
According to Mutabingwa, the earlier dispute demonstrated the vulnerability of African exporters to changes in US trade policy and reinforced the need to diversify export destinations.
He identified Asia, China and Europe as alternative markets for Rwandan and other African exporters, arguing that businesses should avoid excessive dependence on a single trading partner.
Diplomatic engagement could shape future access
Mutabingwa expects the restrictions to be temporary and potentially subject to future diplomatic negotiations.
Restoring Rwanda’s AGOA eligibility would require addressing the concerns raised by Washington, including those related to governance and regional security.
On tensions between Rwanda and the DRC, Mutabingwa called for balanced third-party mediation that takes account of the security concerns of both countries.
“The security concerns in the DRC are also the security concerns in Rwanda,” he said, arguing that an objective approach was needed to address the regional dispute.
The loss of AGOA benefits places renewed attention on Rwanda’s export-market diversification and its trade relationship with the United States. The impact will depend on the tariffs applied to affected products, exporters’ ability to absorb additional costs and whether diplomatic engagement leads to a restoration of preferential access.