Mathatisi Sebusi
United States Ambassador to Lesotho, Maria Brewer, has encouraged Basotho to explore other products to sell duty free to the US market under the African Growth and Opportunity Act (AGOA), to lessen economic setbacks emanating from a drop in production in Lesotho’s textile and apparel sector.
The drop in textile production, which has been attributed to scarcity of orders from US buyers, has seen factories either retrenching or temporarily laying off workers.
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 and free markets. AGOA was originally enacted in 2000 and is set to expire in 2025.
Lesotho started exporting textiles under AGOA in 2001.
Lesotho’s textile and apparel manufacturing industry, which had flourished under AGOA, is considered the second-largest employer in the country after the government. It employed around 46 000 workers at its peak.
However, since 2020, the sector has laid off up to 22 000 employees.
It is under this background that economists and the US Embassy in Lesotho have encouraged the country to explore more export options to take full advantage of AGOA.
In a statement to the Lesotho Times, Ms Brewer said: “If you manage a business here in Lesotho, I encourage you to see how you might use AGOA to increase your sales, train more employees, and better your community.”
Ms Brewer’s statement was issued after the Lesotho Times had inquired on why the US market was seemingly no longer attracted to textile merchandise from Lesotho resulting in the sector bleeding jobs at an alarming rate.
In her response, the US ambassador said AGOA has made provision for over 6,800 different products that Lesotho can explore and export duty free to the US market.
Ms Brewer, however, reiterated that to maintain eligibility, countries must uphold several values that were core to free and fair societies, which included the rule of law, respect for human rights, combating corruption, and protecting workers’ rights.
She added that the current Biden Administration fully supported reauthorizing AGOA, as it is set to expire in 2025.
“The Congress holds the pen on reauthorization, and we are committed to working closely with Congress to ensure this impactful legislation remains relevant,” Ms Brewer said.
“Every year, the U.S. Trade Representative and trade ministers from every country that participates in AGOA come together to take stock of their work together and find opportunities to do more.”
She said they had also gauged progress of the Act and discussed if it could be improved to better serve more Basotho and Americans.
Speaking to the Lesotho Times yesterday, Economist Robert Likhang said Lesotho needed to build a more export oriented and productive economy.
Mr Likhang said a production oriented economy would be able to create more employment for unskilled labour. Lesotho is largely a net importer of food for its 2 million people.
“Since we are a small population and a least developed country, we will need markets outside our country to develop. We however need to produce the goods to sale to others first,” Mr Likhang said.
According to Mr Likhang, Lesotho needed to continue to look at opportunities to enhance itself as a productive economy.
“We need to look at opportunities in agro-processing, as an example. We have opportunities to develop service outsourcing for instance…” Mr Likhang said.
While trade unions and exporters associations attribute the collapse of the textile industry to scarcity of orders from US buyers, the government through the Ministry of Trade, Industry, Business Development, and Tourism, says the industry is being deserted by buyers because of non-competitive prices. Buyers thus decide to take their business elsewhere where they can get the same products at lesser prices.
Meanwhile, US President Joe Biden told congress this week that countries such as the Central African Republic (CAR), Gabon, Niger, and Uganda no longer met AGOA’s eligibility requirements.
Specifically, Mr Biden said, the CAR government had engaged in gross violations of internationally recognized human rights and had not established, or was not making continual progress toward establishing the protection of internationally recognized worker rights, the rule of law, and political pluralism.
Niger and the government of Gabon, Mr Biden said, had not established, or were not making continual progress towards establishing, the protection of political pluralism and the rule of law. Again, the government of Uganda, Mr Biden said, had engaged in gross violations of internationally recognized human rights. This after it passed one of the world’s most draconian anti-gay laws prescribing death sentences for what is described as “aggravated homosexuality”.
“In accordance with section 506A(a)(3)(B) of the Trade Act of 1974, as amended (19 U.S.C. 2466a(a)(3)(B)), I am providing advance notification of my intent to terminate the designation of the Central African Republic, the Gabonese Republic (Gabon), Niger, and the Republic of Uganda (Uganda) as beneficiary sub-Saharan African countries under the African Growth and Opportunity Act (AGOA),” Mr Biden said.
“Despite intensive engagement between the United States and the Central African Republic, Gabon, Niger, and Uganda, these countries have failed to address United States concerns about their non-compliance with the AGOA eligibility criteria. Accordingly, I intend to terminate the designation of these countries as beneficiary sub-Saharan African countries under the AGOA, effective January 1, 2024. I will continue to assess whether the Central African Republic, Gabon, Niger, and Uganda meet the AGOA eligibility requirements.”
Though it remains part of the AGOA deal, Lesotho appears to be treading on perilous grounds after the latest round of instability within the country.
Lesotho’s security chiefs, army commander Lt Gen Mojalefa Letsoela, Commissioner of Police Holomo Molibeli and National Security Service (NSS) Director-General Pheello Ralenkoane, issued a joint statement two weeks back vowing to stop, presumably by force, attempts to pass a vote of no confidence against Prime Minister Sam Matekane.
Their statement to interfere with democratic parliamentary processes has elicited widespread condemnation including from key international development partner, the European Union.
While the US Embassy in Lesotho has not yet directly addressed the statement, the EU has made it categorically clear that civil and military institutions should act in accordance with democratic values and the constitution.
“The Delegation of the European Union to Lesotho trusts that all civilian and military institutions in the country will respect the Constitution and will act within the remit of their respective mandates and in accordance with the democratic values to which they are committed. In the spirit of the Lesotho-EU partnership, the Delegation sincerely hopes for a peaceful resolution of the crisis for the sake of all people of Lesotho,” the EU statement read.
