Web Exclusive | October 2016
Lesotho to localise textile manufacturing
The Government of Lesotho aims to localise the textile manufacturing industry of Africa, which is currently dominated by foreign investors. For this purpose, Joshua Setipa, Lesotho’s Minister of Trade and Industry has promised to provide subsidised factory spaces as well as credit lines to local garment manufacturers.
The textile sector of Lesotho is the largest employer in the country’s private sector with over 40,000 workers. Foreign investors may shift base to other countries like Cambodia after 10 years and thus Lesotho will not be able to achieve the sustainability that it wants, believes Setipa.
Agreements like the US Africa Growth and Opportunity Act (AGOA) encourage foreign firms to invest in the garment manufacturing industry of Lesotho. Introduced in 2000, the agreement allows more than 6,400 products manufactured in sub-Saharan African countries to be exported duty-free to the US. Lesotho benefitted from the agreement and increased its garment exports to the US from $140 million in 2000 to $330 million in 2015. Currently, the country exports close to 80 per cent of its textiles and garments to the US, out of a production of over 100 million garments annually.