THE statement by Minister of Trade, Industry, and Business Development, Mokhethi Shelile, underlines an urgent reality that many in our country cannot afford to overlook: the African Growth and Opportunity Act (AGOA) is far more than a trade concession or a benevolent gesture from the United States.
It is, as Mr Shelile rightly emphasizes, a mutually beneficial trade framework — a two-way street that has tangible economic implications for both Africa and the US.
Lesotho’s dependence on AGOA, particularly through the textile and apparel sector, cannot be overstated. According to Mr Shelile, approximately 12,000 direct jobs are at risk if AGOA is not extended, alongside another 40,000 indirect employment opportunities tied to logistics, transport, housing, and retail.
For a small, landlocked country like Lesotho, where employment opportunities are already limited, such a loss would not just be numbers on a spreadsheet — it would be a societal shock, affecting families, communities, and the broader economy.
Some projections even suggest that Lesotho’s GDP could contract by up to 6% if the agreement lapses permanently. While the final figure requires independent verification, the direction is clear: the stakes are high.
Mr Shelile’s recent mission to Washington D.C. underscores the seriousness with which Lesotho approaches this issue. Alongside other cabinet members and officials, he engaged directly with US lawmakers, including the Ways and Means Committee, the Finance Committee, and congressional players critical to AGOA’s future. Crucially, he highlighted a point that often gets lost in public discourse: AGOA is not charity.
The Minister indicated that a likely outcome is a one-year extension, providing a temporary reprieve and an opportunity to redesign AGOA to align with the US’s “America First” mantra.
While a short-term extension is better than nothing, it does little to instil long-term confidence for investors, factory owners, and workers in Lesotho.
Lesotho’s textile sector suffers from long production and logistics cycles — six weeks for raw materials to arrive from China, and additional weeks for manufacturing, shipping, and delivery to the US. The delayed payment system, with revenue only realised after products sell in US stores, compounds the challenge, making cash flow management a critical concern for factory owners. This is a reality that short-term legislative extensions cannot fully address.
The potential lapse of AGOA also has severe trade implications. Without duty-free access, Lesotho’s exports would revert to Most Favoured Nation rates, with cotton garments facing 16.5% tariffs and man-made fibres attracting 32%. Combined with reciprocal tariffs imposed under previous US administrations, the effective cost could rise to nearly 47% for synthetic garments.
Such tariffs would render Lesotho’s products uncompetitive in the US market overnight. The message is clear: AGOA’s continuation is not a matter of convenience; it is a survival issue for the textile industry and the broader economy.
Recognising the risks of over-reliance on a single market, Mr Shelile said Lesotho is actively exploring alternative markets. The Southern African Customs Union (SACU) presents immediate opportunities, particularly with recent industrial policy adjustments requiring 80% of garments to be sourced locally.
The African Continental Free Trade Area (AfCFTA) also holds long-term potential, though logistical barriers remain. Addressing these barriers — streamlining border procedures, harmonising customs systems, and ensuring predictable regulatory frameworks — will be essential for Lesotho to fully benefit from intra-African trade.
Ultimately, AGOA is not a gift; it is a strategic economic partnership that Lesotho must protect and leverage.
But reliance on external markets alone is inherently risky. The government’s proactive engagement with SACU and AfCFTA is a prudent step, yet it must be matched with domestic policies that enhance production efficiency, improve access to capital, and encourage local entrepreneurship. Without such measures, Lesotho’s economy remains vulnerable to global trade shifts over which it has little control.
AGOA’s fate is more than a Washington legislative matter; it is a test of Lesotho’s economic resilience and strategic foresight.
Mr Shelile’s mission reminds us that trade agreements are about relationships, negotiation, and mutual benefit — not charity. Lesotho must seize this moment to safeguard existing jobs, diversify its markets, and build a more self-reliant economy.