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Textile association on expansion drive

Mohalenyane Phakela

THE Lesotho Textile Exporters Association (LTEA) is exploring ways of increasing the local production of a wide range of products for export to the United States market amid indications that there were gaps in the supply of work-wear to the US.

“Our US partner has advised us to mobilise the garment-making sector and let them know there are great opportunities for us to expand our footprint in the US market, in the area of work-wear,” the LTEA secretary, ‘Malikhabiso Tlalane Majara told this publication last week.

“We want local garment factories to seize this opportunity for us to export in large quantities the much-needed products.”

It is said that currently only three factories produce work-wear in Lesotho.

“There is need to have other factories to express their interest for us to link them up with our partner who will provide information on the requirements and connect them with the potential buyers,” Ms Majara said.

She said with the African Growth and Opportunity Act (AGOA), in full force, coupled with the ongoing expansion of factory shells in the country, there was need for government support to ensure the maximum participation of Basotho when such opportunities presented themselves.

“There is a ready market and we have our people who can deliver in large quantities. This is time to step-up efforts and diversify market coverage and production. We will continue working hand-in-glove with our US partner to ensure that many of our people benefit from this opportunity.”

The United States Government signed the AGOA Act in May 2000 with the key objective of promoting economic development and reform in Sub-Saharan Africa by encouraging increased investment and trade between Africa and the US.

AGOA accords duty-free access for eligible products to the largest single market in the world. It also provides beneficiary countries with a significant competitive advantage over non-AGOA countries that must pay normal tariff rates to enter the United States market. This is particularly products that have high US tariff rates in many instances, such as apparel, footwear and agricultural products.

The program also promotes export diversification in AGOA countries through its provision of duty-free and quota-free benefits to virtually all products. The Act also encourages expanded regional integration and production sharing among beneficiary countries, in addition to enabling job creation and economic growth within those countries.

Lesotho became eligible for the trade benefits that are offered under AGOA in October 2000. The country satisfied the requirements with effect from April 2001 and started exporting textiles in the same year. Lesotho exports denim clothing, knitwear (t-shirts, sweaters, sportswear and shorts) and kids clothing, among others.

Between January and July 2017, Lesotho shipped a volume of 36 142 000 units to the US compared to the 36 711 000 in 2016, a decline costing $152 231 (which is equivalent to M1 804 843).

Ms Majara explained Lesotho had been on top of the list as the leading country in the textile sector, exporting duty-free to the US in the Sub Sahara Africa, until the reinstatement of Madagascar in January 2015.

Madagascar had been on suspension from January 2010.

Lesotho came after Kenya in 2015, due to the reinstatement of Madagascar since many clients sought to import from either Kenya or Madagascar due to geographical location.

“Swaziland, which was axed when Madagascar was reinstated in 2015, was reinstated in August 2017. We are yet to review and see whether its reinstatement has had an impact on Lesotho’s performance. The market is also shrinking due to Walmart – being the biggest client, hence the need to expand our product range,” Ms Majara said.

She further explained that it was important for Lesotho to maintain the Rules of Origin, which are the requirements set out for working and processing that must be undertaken locally for a product to be considered the “economic origin” of the exporting country, such as bearing the tagline “Made in Lesotho”.

“Our biggest challenge is the time taken to follow shipping processes from our side. If only we could have automated services, which will allow us to declare online and just go to a specific office for verification. These delays make us appear unreliable to buyers since goods may end up arriving later than the agreed time.”

 

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