Written By Duncan Onyango
On 3 February, President Donald Trump signed a law extending the African Growth and Opportunity Act (AGOA), the preferential trade agreement between the US and African countries, through to December 2026. The agreement had lapsed in September 2025. I choose to read this renewal as a signal, however modest, to the world that African trade still matters.
That signal came amid a great deal of noise. At last month’s gathering of global business and political leaders in the Swiss ski resort of Davos, an uncomfortable reality loomed large: the global trade system is in turmoil. Tariffs are no longer exceptional. They are imposed, adjusted, and sometimes withdrawn at short notice by the world’s largest economy, the United States. In response, many trading partners have retaliated with measures of their own. With protectionism also on the rise, a dark cloud hangs over what is often described as the world’s biggest talking shop.
Against this gloomy backdrop, AGOA’s renewal offers Africa a rare ray of sunshine. But here is the uncomfortable truth that too few are willing to acknowledge: AGOA is necessary, but it is not sufficient. Policy creates permission; it does not, by itself, create trade. Preferential access only matters if businesses can actually use it.
And increasingly, they cannot rely on the old model to make that happen.
The old grant model is dead
When USAID ceased operations in 2025, a hard truth became impossible to ignore: the era of predictable, large-scale development grants is over. As Canadian Prime Minister Mark Carney put it plainly in Davos, “The old order is not coming back. Nostalgia is not a strategy.”
For African trade infrastructure and trade finance, this is a reckoning. The continent’s trade challenges will not be solved by grants alone. They require practical financing structures — for ports and corridors, for industrial parks, and for small and medium enterprises (SMEs) that sit at the heart of African trade. Above all, Africa now needs partners willing to test new models, because that is the world we are in.
What this means in practice
For governments:
Critical trade infrastructure, border posts, logistics hubs, industrial parks, can no longer wait indefinitely for donor approval. Instead, these assets must be structured on a cost-recovery basis. Faster border crossings justify user fees that fund maintenance and upgrades. Trade corridors can function like expressways: businesses pay to move goods more efficiently. Industrial parks, too, should be built and operated commercially, maintained properly, while generating sustainable revenue.
For development finance institutions:
Blended finance is no longer optional. Catalytic capital, first-loss equity, and subordinated debt are essential tools to crowd in commercial investors. This is how scale is unlocked, without reverting to grant dependence.
For banks and investors:
African trade is emerging as a credible asset class. Border and corridor fees generate predictable cash flows. Industrial parks generate rental income. SME trade finance generates returns. These are not abstract development concepts; they are investable opportunities.
For SMEs:
The old reality was often brutal. Banks said no, not because the business lacked opportunity, but because it lacked collateral. That model is beginning to change. Digital platforms such as EASETRADE use transaction data to assess creditworthiness, rather than fixed assets. This approach works in other regions and is now being adapted for African markets, offering SMEs a genuine pathway into formal trade and finance.
The opportunity
In Davos, the dominant theme was rupture, of trade rules, of aid models, of long-standing assumptions. But ruptures create opportunity for those willing to act differently.
If you share the conviction that Africa’s trade will be unlocked not by grants, but by genuine partnership between development and commercial capital, then Trade Catalyst Africa is ready to build with you.
