This caution comes amidst a fragile diplomatic relationship with the US.

During its recent meeting, the Reserve Bank's monetary policy committee decided to maintain the repo rate at 7.5%, citing prevailing global risks.

Chief Economist at RMB, Isaah Mhlanga, acknowledged the potential impact of losing AGOA benefits but assured that, from a macroeconomic standpoint, it would not be catastrophic.

"A loss of access to our exports to a significant market such as the US will always have a negative impact on our economy. It, however, accounts for less than 2% of our total trade, so it’s not catastrophic at a macroeconomic level," Mhlanga explained.

He further highlighted that certain sectors, including agriculture, particularly citrus and wine farmers, and the automotive industry, would bear the brunt of the impact due to their reliance on US markets under AGOA.

--SABC/ChannelAfrica--