- as AGOA renewal remains uncertain
- 420 to lose jobs in January
Mathatisi Sebusi
TEXTILE factories are warning of mass job losses as uncertainty deepens over the renewal of the African Growth and Opportunity Act (AGOA).
One of Lesotho’s largest textile producers, Hippo Knitting, has written to the Ministry of Trade, Industry and Business Development notifying the government that the delay in AGOA’s renewal has rendered its products uncompetitive in the US market, leading to a sharp and sustained decline in orders.
In its letter, Hippo Knitting stated that despite aggressive cost-cutting measures and efforts to secure alternative markets since June, it has been unable to generate enough business to keep its factory fully operational. As a result, 420 employees will be retrenched from 25 January 2026.
“It is with deep regret that we must announce a further retrenchment at our company. As of today, the renewal of AGOA remains unconfirmed. We had hoped for positive progress, but with November already upon us and no decision being announced, many customers have paused or cancelled orders. This has resulted in production levels (becoming) too low to sustain operations,” the letter reads.
“It is therefore with profound sadness that we must inform you that a further 420 employees will be retrenched effective January 2026.”
The company further warned that, based on its current financial projections and order book, it might be forced to completely wind down operations by July 2026 if conditions do not improve.
“There remains a narrow but critical opportunity to save our company, which we cannot do alone. We are making an urgent appeal to government authorities for immediate intervention, including freezing rental obligations and providing financial support to help sustain operations. The remaining jobs depend on swift and collective action,” the company added.
In September, trade minister Mokethi Shelile told Parliament that Lesotho could suffer a major economic blow if the United States fails to renew AGOA, as textile exports would face combined tariffs exceeding 30%.
He revealed that the government had been negotiating for two years to secure AGOA’s renewal but progress had stalled due to shifting US priorities.
“If AGOA is not renewed, Lesotho will have to pay Most Favoured Nation (MFN) tariffs — 15.6% for cotton garments — on top of the 15% reciprocal tariff already in place. This means our goods will be hit with a total tariff burden of 30.6% when entering the US market,” he explained.
Enacted in 2000, AGOA grants eligible sub-Saharan African countries duty-free access to the US market for over 1,800 products, in addition to more than 5,000 items under the Generalized System of Preferences. Lesotho has been one of the biggest beneficiaries, particularly through its textile sector.
The current 15% reciprocal tariff on Lesotho’s exports was introduced after former US President Donald Trump declared a state of emergency, triggering trade restrictions. Initially, tariffs rose to 50% in April before being suspended and later reduced to 15% in August 2025.
Mr Shelile warned that failure to renew AGOA could devastate Lesotho’s economy.
“If AGOA lapses, 11 textile factories exporting to the US will be affected, putting around 12,000 direct jobs at risk,” he said. “The impact would ripple beyond factory workers to include truck drivers, taxi operators, landlords, and domestic workers who depend on the textile industry.”
In a recent interview with the Lesotho Times, Mr Shelile said the US government had promised to renew AGOA between November and December this year.
The ministry’s public relations officer, Liahelo Nkaota, maintained yesterday that the US administration had assured Lesotho that AGOA would be renewed for one or two years, pending a broader review to align the Act with America’s strategic interests.
Contacted for comment, Lesotho Textile Exporters Association chairperson, David Chen, said more job losses were imminent, as no factory had received new orders.
“While efforts are underway to secure the renewal of AGOA, its future remains uncertain. If the renewal does not happen, many factories will be forced to shut down,” Mr Chen said.
He said his factory, once a major exporter, was currently surviving on subcontracts from companies producing for the local and South African markets.
