Hopolang Mokhopi 

THE M150 million loan package for the textile industry announced by the government last week could be the panacea to the continued hemorrhaging of jobs in this crucial sector. 

The textiles industry – the largest public sector employer – which at its peak accounted for more than 50?000 jobs – has been in dire straits since the onset of the Covid-19 pandemic in 2020. 

Many factories have closed with thousands of jobs having been lost since then. 

Trade, Industry and Business Development Minister, Mokhethi Shelile, said last week the government was now facilitating loans to textile factories through the Lesotho National Development Corporation (LNDC) and Standard Lesotho Bank to save them from further closures. 

While the Lesotho Textile Exporters Association said it could not immediately comment without first understanding the full details of the loan package, other industry players canvassed said it could be the panacea to halt the sector’s downward spiral. 

While commending the government for the move, they said a lot will depend on the details of the loan package including interest rates and other repayment terms. They also urged the government to move fast to explain the full details of the package and the criteria for selecting beneficiaries.? 

Mr Shelile said the government had come up with the package to avert the high rate of factory closures. 

“The government, through the LNDC and the Standard Lesotho Bank, has set aside M150 million to provide funding for operators in the textiles industry, so they can purchase the materials they need to fulfill existing orders,” Mr Shelile said. 

“This?will solve the current problems faced by the textile industry and some factories will soon be reopened.” 

The minister noted that unlike other countries like Ethiopia and Kenya involved in the full value chain including?designing, Lesotho’s textile industry only operated on a Cut, Make and Trim (CMT) system,?contributing to its losses. 

“We want our factories to operate on a full scale, from designing to the finished product. We are therefore in negotiations with the Limkokwing University to provide students or graduates who will help this sector.” 

He said while the textile sector was once applauded as the biggest private sector employer with 50 000 jobs at its peak, a number of these had been lost due to the economic meltdown brought about by Covid-19. 

The minister said the government had managed to resolve the impasse between the management and staff of the Maputsoe-situated Ace Apparel. The factory’s previous investors had vanished in?December?last year without?paying their workers. 

The government had secured another investor who reopened the factory and paid their salaries. Mr Shelile nonetheless said the workers had been disagreeing on several issues with the new employer, leading to eight unsanctioned strikes. The government had however salvaged the situation, he said. 

“Another factory,?Everunison, which had employed 1067 workers had shut down last month, but with the government’s intervention, would reopen this month end. He said they had discovered when engaging its investors that their problems dated back to 10 years ago.” 

He said?Suntextile, which shut down last year, leaving its 549 workers jobless, had secured another investor who would start work immediately after the previous operator had paid the workers their outstanding wages. ? 

Mr Shelile said the government was working tirelessly to close the gaps brought by closures of the factories. He lamented the decline of output in the country’s textiles sector. 

“In terms of the output of the clothes exported to the United States market, Lesotho dropped with 10 percent, compared to Kenya, Ethiopia and Tanzania which increased by 20 percent.” 

Lesotho has since 2001 been exporting textile products to the United States (US) through the African Growth and Opportunity Act (AGOA). AGOA provides duty free access to goods from eligible sub- Saharan African countries into the US market. It is aimed at promoting economic growth through good governance, the rule of law and market access. AGOA was originally enacted in 2000 and is set to expire in 2025. 

For his part, Minister of Labour and Employment, T?eliso Mokhosi, said research was needed to establish why Lesotho’s productivity levels were stagnant, compared to other countries and to inform what measures should be taken into consideration to take Lesotho to the level of countries like Kenya and others. 

“Some of the investors decide to leave Lesotho to invest in Kenya yet the salaries are much higher there. But in the end, they manufacture more pieces than here in Lesotho,” said Mr Mokhosi. 

He said companies also needed to motivate their workers to produce more by increasing their salaries. 

He said the government would continue working collaboratively with other?stakeholders to curb the closure of industries which had led to the high unemployment rate.