South Africa’s impending removal from the African Growth and Opportunity Act (AGOA) is being treated largely as a diplomatic confrontation between Pretoria and Washington. For Zimbabwe, however, the implications are considerably wider. The decision exposes the vulnerability of an economy whose trade, manufacturing supply chains, fuel supplies, agricultural inputs and distribution networks remain deeply connected to its southern neighbour.
By Brighton Musonza
The immediate question is how South African exporters will absorb the loss of preferential access to the United States. The more important question for Zimbabwe is what happens when the largest economy in Southern Africa is forced to reorganise its trade relationships, redirect exports and reconsider the structure of its industrial supply chains.
Zimbabwe cannot afford to view this as somebody else’s trade dispute. Its economic relationship with South Africa is too substantial, too concentrated and too important to domestic production for the consequences to remain on the other side of the Limpopo.
Washington has notified Pretoria of its intention to remove South Africa from AGOA with effect from 1 January 2027. The programme, established in 2000, provides eligible sub-Saharan African countries with preferential access to the US market for thousands of products. South Africa became its largest beneficiary, building export industries around access to American consumers, particularly in automotive manufacturing, agriculture, food processing and selected industrial products.
The Southern African Agri Initiative estimates that 62,000 direct jobs could be at risk following the proposed withdrawal. Aluma Capital chief economist Frederick Mitchell has put the potential exposure considerably higher, estimating between 125,000 and 576,000 direct and indirect jobs. The wide range reflects different assumptions about the effects across supply chains, and should not be interpreted as a confirmed forecast of job losses.
The scale of the potential disruption is nevertheless significant. South Africa’s automotive industry, citrus and deciduous fruit producers, wine exporters and advanced manufacturing businesses have developed commercial relationships around the US market. Some agricultural producers have invested in orchards and production capacity specifically to serve American buyers. Redirecting those products to other destinations is not necessarily straightforward.
But the economic consequences will not stop at South Africa’s borders.
Zimbabwe’s exposure is much larger than the AGOA trade itself
Zimbabwe’s vulnerability begins with the structure of its external trade. South Africa is not simply a neighbouring country with which Zimbabwe exchanges goods. It is a major source of the machinery, fuel, food, chemicals, vehicles, plastics, steel and other industrial inputs that keep Zimbabwean businesses operating.
World Trade Organisation data, drawing on UN Comtrade, shows that South Africa supplied approximately 39.5% of Zimbabwe’s merchandise imports in 2024, equivalent to about US$3.77 billion. It also accounted for 27.6% of Zimbabwe’s exports, worth approximately US$2.05 billion.
Those figures reveal a relationship that is both commercially important and structurally imbalanced. Zimbabwe buys substantially more from South Africa than it sells there, leaving local businesses dependent on South African manufacturers, wholesalers and distribution networks for a considerable proportion of their requirements.
The composition of imports matters as much as the total value. Zimbabwe’s purchases from South Africa include cereals, machinery, mineral fuels, vehicles, plastics, iron and steel, electrical equipment and fertilisers. These are not merely consumer products that can be replaced without consequence. They are inputs into agriculture, mining, manufacturing, construction, transport and retail.
A disruption to South African production or distribution could therefore reach Zimbabwe through several channels. If manufacturers face higher costs, weaker export demand or reduced investment, those pressures may eventually be reflected in supplier prices, delivery times and the availability of industrial inputs.
This does not mean AGOA’s withdrawal will automatically make South African goods more expensive in Zimbabwe. The programme governs preferential access to the US market, not South African exports to Zimbabwe. The transmission would depend on how individual companies respond, whether they lose orders, how they reorganise production and whether the costs of adjusting their businesses are passed on to customers.
That distinction is important. Zimbabwe should prepare for possible spillovers without confusing a US trade preference decision with a direct tariff imposed on Zimbabwean imports.
The risk of a weaker South African industrial economy
The more immediate danger is that South African businesses exposed to the US market could experience weaker demand, lower margins and pressure to reduce operating costs.
The South African automotive sector illustrates the problem. Vehicle manufacturing is built around extensive supplier networks involving components, metals, plastics, logistics, engineering services and specialised labour. A reduction in export competitiveness can affect businesses well beyond the final vehicle assembly plants.
Zimbabwean companies supplying industrial materials, packaging, engineering services or other inputs into South African production networks could face indirect exposure where their customers are linked to affected export industries.
Agriculture presents another transmission channel. South Africa is a major regional producer and distributor of food. Its agricultural economy is connected to Zimbabwe through imports, wholesale markets, transport operators, packaging businesses and cross-border trade.
If South African fruit and agricultural exporters redirect products towards African markets after losing preferential access to the US, Zimbabwe could experience increased competition from imported produce. Local farmers and processors may face pressure in products where South African producers have advantages in scale, financing, technology and distribution.
This could be particularly challenging for Zimbabwean horticultural businesses seeking to expand commercial production. The country has ambitions to grow exports of citrus, avocados, blueberries, macadamia nuts and other high-value agricultural products. However, building a competitive export industry requires more than favourable growing conditions. It requires reliable logistics, cold-chain infrastructure, certification, access to finance and consistent market demand.
South Africa already possesses much of that commercial infrastructure. If its exporters intensify their search for regional customers, Zimbabwean producers will have to compete against companies with established supply chains and greater economies of scale.
The outcome could be a more competitive regional market, but not necessarily one in which Zimbabwean businesses automatically gain.
The opportunity hidden in South Africa’s trade difficulties
There is, however, another side to the argument. A restructuring of South African supply chains could create opportunities for Zimbabwean manufacturers and service providers capable of meeting the requirements of regional businesses.
South African companies may increasingly examine alternative sourcing arrangements, particularly where they can reduce costs, improve supply security or establish production partnerships elsewhere in the region.
Zimbabwe has an existing industrial base that could support some of this activity. Food processing, metal fabrication, packaging, chemicals, engineering, textiles, agricultural processing and mining-related manufacturing offer potential areas for deeper commercial cooperation.
The opportunity is not necessarily to replace South African manufacturers. It is to become a more useful part of their regional production networks.
For example, a Zimbabwean company producing packaging materials, industrial components or processed agricultural products could seek supply contracts with South African businesses. Mining companies operating across the region could also benefit from more integrated engineering, maintenance and equipment supply networks.
This is consistent with the direction of discussions at the South Africa–Zimbabwe Business Forum in August 2026. ZimTrade urged Zimbabwean companies to look beyond conventional exports and pursue opportunities in manufacturing, industrial supply chains, technology partnerships and regional distribution.
That is the correct strategic direction. Zimbabwe has spent too long treating exports largely as the movement of finished goods across borders rather than as an opportunity to participate in the production systems of larger regional economies.
However, investment will not follow political declarations. South African businesses will not relocate production or enter long-term supply agreements simply because Zimbabwe is geographically close. They will examine electricity reliability, currency and payment risks, taxation, labour productivity, infrastructure, border efficiency and the predictability of government policy.
Zimbabwe must compete on commercial terms.
The danger of becoming a dumping ground
One of the less discussed consequences of the AGOA decision is the possibility that South African exporters will redirect goods towards markets where they already have established commercial relationships.
Zimbabwe is an obvious destination because of its proximity, existing transport corridors and established distribution networks.
That could benefit consumers through greater product availability and competitive pricing. But it could also intensify pressure on domestic manufacturers already struggling with high production costs, expensive finance, unreliable electricity and competition from imports.
The distinction between healthy competition and the destruction of local productive capacity is important.
Zimbabwe needs imported machinery, raw materials and intermediate goods to support industrialisation. It does not need a trade structure in which local manufacturers are unable to compete with imported finished products because domestic production costs remain persistently higher.
If South African businesses redirect excess production into Zimbabwe, local firms could lose market share in sectors where they have the capacity to produce competitively. The result could be increased import dependence, reduced industrial utilisation and further pressure on employment.
Government therefore needs to monitor import trends carefully, while respecting regional trade commitments and avoiding arbitrary protectionist measures. The objective should be to improve the competitiveness of domestic producers, not to shelter inefficient businesses indefinitely.
Zimbabwe cannot simply inherit South Africa’s AGOA advantage
There is also a misconception that South Africa’s removal from AGOA could create an automatic opening for Zimbabwean exporters in the United States.
It will not.
Zimbabwe has not been designated an AGOA beneficiary. The withdrawal of South Africa’s eligibility does not automatically transfer its preferential access to another country. Zimbabwean exporters cannot claim AGOA treatment simply because they operate in the same region or supply goods previously exported through South African businesses.
Any attempt to use regional production arrangements to access preferential treatment would also have to comply with applicable rules of origin and US customs requirements.
This is an important limitation because it places the opportunity in the correct context. Zimbabwe may be able to supply South African businesses, attract investment into regional production or develop alternative export markets, but it cannot assume that South Africa’s lost trade preferences will become its own.
The country would need to pursue its own trade diplomacy and improve the competitiveness of its exports if it wants to expand access to international markets.
The regional trade imbalance is a strategic weakness
Zimbabwe’s dependence on South Africa also raises a broader question about the country’s industrial and trade policy.
A country that imports a substantial proportion of its manufactured goods from one trading partner is exposed to developments in that partner’s economy, even when the original shock occurs in a completely different market.
South Africa’s AGOA difficulties are an illustration of this vulnerability. A diplomatic dispute with Washington could influence the commercial decisions of South African manufacturers, agricultural exporters and investors. Those decisions could then affect Zimbabwe through prices, orders, employment, logistics and the availability of goods.
Zimbabwe’s 2024 trade figures underline the challenge. South Africa supplied nearly US$3.8 billion of imports, while Zimbabwe exported about US$2.05 billion to the market. The relationship is not inherently unhealthy; proximity and established infrastructure make South Africa a natural trading partner. The problem is the limited capacity of Zimbabwe’s domestic industrial base to supply more of its own requirements and compete for a greater share of regional demand.
The country must therefore distinguish between reducing dependence on South Africa and reducing trade with South Africa. The latter would be neither practical nor economically desirable. The objective should be to build productive capacity so that Zimbabwe can trade with its neighbour from a stronger commercial position.
That means producing more of the goods it currently imports, increasing the value added to mineral and agricultural exports, and developing businesses that can supply regional manufacturers.
Zimbabwe’s export structure remains heavily concentrated in primary commodities and mineral products. More value addition in minerals, tobacco, horticulture and other agricultural products would help diversify export earnings and create stronger links between mining, manufacturing and services.
SADC and AfCFTA need to become commercial instruments
The AGOA dispute also places renewed emphasis on the importance of regional trade integration.
The Southern African Development Community and the African Continental Free Trade Area provide frameworks through which businesses can expand markets, establish production partnerships and reduce some of the barriers to regional commerce.
But regional agreements alone cannot create competitive industries. Their value depends on whether companies can move goods across borders efficiently, obtain predictable customs treatment, secure payments and operate within consistent regulatory systems.
For Zimbabwe, the Beitbridge border remains central to this discussion. Delays, administrative costs and transport inefficiencies raise the cost of doing business with South Africa. A more efficient border environment would benefit exporters, importers, logistics companies and manufacturers on both sides.
The same applies to rail infrastructure, road networks, warehousing and access to reliable energy. Regional trade integration will remain largely theoretical if businesses cannot move goods at competitive cost.
Zimbabwe should also pursue stronger commercial links with Zambia, Mozambique, Botswana and other regional markets. Diversification does not require abandoning South Africa. It requires ensuring that South Africa is not the only practical route through which Zimbabwean businesses can source inputs, sell products or reach international markets.
The investment question
Perhaps the most important long-term consequence is what the AGOA dispute reveals about the relationship between trade policy and investment confidence.
South Africa’s access to the US market was not simply about the value of goods exported under preferential tariffs. It helped support investment decisions, production capacity, employment and long-term commercial relationships.
When access becomes uncertain, companies reassess where they manufacture, where they source inputs and which markets justify additional capital expenditure.
Zimbabwe should pay attention to that process.
The country has mineral resources, agricultural potential and a geographical position that could support regional manufacturing. Yet those advantages will not attract investment without credible property rights, predictable taxation, reliable energy, efficient transport and a stable framework for repatriating returns.
Investors compare locations. If South Africa becomes less attractive for particular export-oriented activities, Zimbabwe could be considered as an alternative production base. But that would require a demonstrable improvement in the investment environment, not simply the existence of a neighbouring country’s difficulties.
The lesson is that investment is attracted by competitive conditions, not by another economy’s misfortune.
A test of Zimbabwe’s economic strategy
South Africa’s impending AGOA removal is ultimately a reminder that trade access is never guaranteed. Preferential arrangements can be withdrawn, political relationships can deteriorate and established export markets can become less predictable.
For Zimbabwe, the danger is not that it will lose AGOA benefits it does not possess. It is that an important trading partner could face a period of industrial adjustment, with consequences for the businesses and consumers connected to its economy.
There are opportunities in the disruption, particularly in manufacturing partnerships, agricultural processing, regional distribution and industrial supply chains. But capturing them requires a more competitive domestic economy.
Zimbabwe needs to move beyond the rhetoric of import substitution and export diversification towards a practical industrial strategy built around productivity, investment and value addition. It must make it easier for businesses to produce locally, source competitively, cross borders efficiently and sell into regional markets.
South Africa’s trade difficulties could create openings for Zimbabwean companies. They could also expose the weaknesses of Zimbabwe’s own production base and intensify competition from redirected imports.
The difference between those two outcomes will be determined by Zimbabwe’s ability to respond commercially.
The real lesson from the AGOA dispute is therefore not that Zimbabwe should celebrate South Africa’s setback. It is that the country must build an economy capable of benefiting from regional opportunities without being destabilised by every shock experienced by its largest trading partner.
About the writer
Brighton Musonza is a Zimbabwean business and economic commentator, writer and media entrepreneur, and the founder of The Zimbabwe Mail. He holds an MBA and a BSc in Business Management, with additional professional training in business analytics, finance and digital transformation.
His commentary focuses on Zimbabwe’s economy, regional and international trade, financial markets, investment, industrial development and public policy. He examines economic developments through the lens of business strategy, macroeconomics, institutional governance and the practical realities facing businesses and investors.
Based in the United Kingdom, Musonza writes about Zimbabwe’s economic transformation, the country’s position in Southern Africa, and the opportunities and challenges shaping its engagement with international markets. His work aims to encourage informed debate, challenge conventional assumptions, and promote a deeper understanding of the economic forces shaping Zimbabwe’s development.
Editorial Disclaimer
The views and opinions expressed in this article are those of the writer, Brighton Musonza, and do not necessarily represent the official position of The Zimbabwe Mail, its editors, associates or contributors.
This article is intended for general information, economic commentary and public discussion. While reasonable care has been taken to present information accurately and draw on relevant sources, economic data, projections, estimates and policy developments may change. Interpretations and assessments of potential economic consequences represent the writer’s analysis and should not be treated as established outcomes.
The article does not constitute financial, investment, legal or commercial advice. Readers, businesses and investors should undertake their own independent research and seek appropriate professional advice before making decisions.
The Zimbabwe Mail welcomes informed debate and differing perspectives on the issues discussed.
