Under the US African Growth and Opportunity Act (AGOA), the tiny mountainous kingdom of Lesotho has become Sub-Saharan Africa’s largest exporter of apparel to the United States and the textile industry has become the largest employer in the country. Yet Lesotho’s experience with AGOA occurs within the context of a weakening economy and diminishing trade conditions. What’s more, the Act that stimulated the textile industry – now seemingly indispensable to the country’s economic wellbeing – is scheduled to expire in 2015. How will the scheme’s poster child weather the post-AGOA storm?
To overcome some of the stark economic challenges facing Lesotho, its policy makers would do well to recall the country’s smaller, pre-AGOA textile boom in the latter half of the 1980s - a period in which Lesotho showed nascent signs of an African development success story.
This paper, based on a series of interviews with decision makers from both periods, argues that considerable progress in setting the foundation for a successful textile sector was put in place in the late 1980s. AGOA, the paper suggests, is in fact the second phase of the sector’s development, yet the government has failed to build upon and localise a near three-decade experience of an export-oriented industry that should have catalysed broader development. Despite the current economic downturn, the present period affords numerous opportunities for development beyond textiles, provided more effective means to capitalise on the trade preferences are devised. As ever, the onus for setting the right conditions falls squarely on the government.
Written by Sebabatso Manoeli, the Brenthurst Foundation’s Machel-Mandela Intern. She is beginning graduate studies at Oxford University as a Rhodes Scholar in October 2012.