Lesotho gives up on its garment industry

Lesotho’s garment industry may be on its way out, putting at risk a key customer for road freight transport operators into and out of the country. With no rail service and minimal air freight movement in the country, factory inputs and exported finished products have moved primarily by road since the US African Growth and Opportunity Act created the nation’s textile industry. Agoa gives Lesotho’s exports preferential access to the American market and led to extensive manufacturing investment in the country by Asian firms. But Agoa is set to expire in 2015, and with the Lesotho product deemed uncompetitive in other markets, government is looking to other industries for economic development. All raw materials that go into garment-making are imported, and government does not support the creation of local firms to produce these inputs. A World Bank official in Lesotho was quoted in the press saying government had “given up” on the garment industry, and would eliminate subsidies. “We need to diversify away from textiles into other areas,” said Lesotho PM Pakalita Mosisili earlier this year. Agriculture, horticulture, water management and tourism are four industries that government is interested in supporting to replace the garment industry.