South Africa – Dual Alignment

Introduction:

South Africa has long pursued a policy of non-alignment, maintaining relationships with Western powers while deepening its engagement with BRICS and other emerging economies. Despite recent political tensions,¹ substantial economic ties remain on both tracks, as indicated by trade figures under the African Growth and Opportunity Act (AGOA) and financing through the BRICS-established New Development Bank (NDB).

AGOA:

The African Growth and Opportunity Act is a preferential agreement between the United States and eligible sub-Saharan African countries that allows duty-free access to the U.S. Market, fostering economic growth and improved relations amongst nations.² According to the Office of the U.S. Trade Representative, AGOA eligibility is conditioned on progress toward market-oriented economic policies, democratic governance, rule of law, and human rights protections.³

AGOA has been reauthorized through the end of the year, granting South Africa, the largest beneficiary of the agreement, to continue benefiting from preferential access to the U.S. market.⁴ While 2026 data is ongoing, the 2024 and 2025 numbers indicate a sharp decline in imports under the agreement.

AGOA imports from South Africa totaled roughly $4.07 billion in 2024 before falling to $1.75 billion in 2025.⁵ The downward trend has continued in 2026 with imports under AGOA totaling $599 million between January and July.⁶ South African auto exports were the largest source of imports under the Act, but plunged nearly 75% in 2025, from 25, 544 vehicles in 2024 to roughly 6, 500.⁷

Importantly, the decline in AGOA trade did not initially correspond to a decline in overall U.S. imports from South Africa. In 2024 to 2025, total imports increased from $14.59 billion to $15.97 billion⁸ and revenue for both imports and exports of goods and services went up 10%, a nearly $2.6 billion increase.⁹ The decline in the covered trade should therefore not on its own be read as an equivalent contraction of the broader relationship, although the downward trend under the act suggests political actions such as trade tariffs¹⁰ threatening benefits rather than a declining partnership.¹¹

As a unilateral U.S. trade preference program, these benefits remain subject to American policy decisions and periodic eligibility reviews. Although Congress has extended AGOA through 2028, the eligibility of each country in the agreement is reviewed annually by the White House. There is speculation as to whether South Africa’s eligibility will remain intact or whether the country will be removed when decisions are made at the end of this year.¹² The fear stems from the past few years of worsening relations between the two countries and ongoing political tension. Nothing of this has been yet confirmed and the country continues to receive benefits, however if South Africa were to be excluded, $20.5 billion worth of bilateral trade could be at risk and South Africa would certainly be affected.¹³

BRICS:

BRICS has become a major force in the last two decades and continues to make efforts as a forum for political and economic cooperation among emerging economies and Global South countries. Differing entirely from AGOA which is a distinct preferential trade agreement, BRICS instead acts as an international institution of emerging states, seeking to coordinate its members’ economic and diplomatic policies and founding new financial organizations to decrease dependency on the U.S. dollar.¹⁴ Founded in 2009 by four original members – Brazil, Russia, India, and China – South Africa joined two years later, signifying their role in the institution. Today, there are 11 official member states, as well as additional partner countries, now comprising more than 25% of the global economy and almost 50% of the global population.¹⁵

The New Development Bank reflects BRICS members’ efforts to expand the role of emerging economies in international development finance. Established as an additional source of infrastructure and sustainable development financing, the Bank offers an alternative funding channel alongside traditional multilateral development institutions such as the World Bank and the IMF. It hopes to increase South-South cooperation by offering loans and other financial services to support private projects in member countries that contribute to development efforts. By focusing on a smaller number of members compared to these other global organizations, BRICS hopes to make access easier, thus eliciting support.¹⁶

NDB disbursements to South Africa have fluctuated considerably from year to year while maintaining an ongoing financial relationship. In 2025, the Bank disbursed $301 million to South Africa, accounting for nearly 11.15 percent of its $2.71 billion annual disbursements across all member states.¹⁷ This marked a substantial increase from the $76 million disbursed in 2024.¹⁸ Of the years examined, 2023 recorded the highest disbursements, with a total of $535 million, almost 16 percent of the total the bank dispersed,¹⁹ illustrating the variability of annual financing rather than a linear upward trend.

Although annual disbursements fluctuate, the scale of outstanding financing ($3.81 billion at the end of 2025²⁰) and continued approval of new projects indicate sustained engagement between South Africa and the NDB. That engagement has continued into 2026. In September, South Africa’s government signed a $1 billion loan agreement with the Bank aimed at improving urban infrastructure.²¹ While the disbursement has yet to take place, the agreement indicates continued expansion of South Africa’s partnership with the NDB and BRICS.

As political tensions cause relationships to shift, potential changes to South Africa’s AGOA eligibility could increase the importance of its economic relationships with emerging powers, particularly China. BRICS serves as an important platform for China’s broader strategic objectives, including expanding the influence of emerging economies in international governance and promoting alternatives to traditionally Western-dominated institutions. The Chinese government has been a significant advocate of BRICS expansion and the attempt to shape its political significance and international influence. Beijing has publicly opposed protectionism in international trade and restrictions on economic cooperation, proposing a greater role for developing states in economic governance.²² China’s role in supporting South Africa’s entry into BRICS further reflects its interest in strengthening relationships with emerging economies. South Africa, meanwhile, has sought to rebalance trade with China, which is currently its largest individual trading partner.²³ Nevertheless, in regards to the NDB, its multilateral structure and distinct financing mandate mean that greater BRICS engagement would not necessarily compensate for reduced access to the U.S. market.

Conclusion:

Taken together, the figures indicate South Africa’s dual economic engagement rather than a straightforward shift from one partnership towards another. Even as AGOA trade has declined, the United States remains a substantial commercial partner, while NDB financing continues to support South African development. The two relationships remain operating in concurrence: participating in U.S. linked trade structures while expanding engagement with emerging economies’ financial institutions.

The distinction between AGOA and the NDB is fundamental to South Africa’s dual alignment. One cannot merely replace the other, and South Africa’s existing relationship with each suggests a continuance of strategic cooperation and multi-directional foreign policy, even as geopolitical tensions introduce uncertainty into these partnerships.

Notes & References

Notes