Lesotho’s textile sector reaps big rewards from AGOA
AGOA: US Imports of Apparel under AGOA by Rule of Origin category
By Value; Unit: $ 'million (to 3 decimals); Data to September 2016 Example: 750.612 represents $750.6 million
The textiles and garments industry in Lesotho, exported at least $330 million worth of products to the U.S. last year, making it the country’s largest private-sector employer as the nation reaps big from the African and Growth and Opportunity Act (AGOA).
The tiny Southern African nation is one of the African nations benefiting from the trade pact signed in 2000, allowing at least 6,000 products from 38 sub-Saharan African to enter the U.S. market duty free.
About 80 percent of the nation’s textiles and garment exports go to the U.S., according to the Lesotho Textile Exporters Association. The sector currently supports over 44,000 jobs.
Several factories in the nation’s industrial district of Thetsane, in the capital Maseru, export nearly $250 million annually in garments to leading U.S. brands like Old Navy, Walmart and Levis, The Christian Science Monitor reported.
Non-oil exports from sub-Saharan nations to the world’s economic giant enjoyed a boom in the last 15 years, after an increase from $1.4 billion in 2001 to $4.1 billion last year.
Lesotho, Kenya, Mauritius and Swaziland are leading in garment exports to the U.S. while South Africa, the continent’s biggest economy, leads in automobiles.
South Africa however remains the biggest beneficiary of AGOA, recording $1.7 billion worth of goods to the U.S. last year.
African countries must however maximize on the trade pact that will expire in 2025, according to Moono Mupotola, director of the New Partnership for Africa’s Development (NEPAD) Regional Integration and Trade Department at the African Development Bank.
The continent’s exports in textiles and garments industry account for a paltry one percent of the $350 billion worth of the market, and there is still room to increase the exports, according to Mupotola.
Global textile giants like Vietnam, Malaysia and Singapore will pose a big challenge to Africa if the US ratifies the Trans-Pacific trade deal, slashing tariffs to boost trade with the three Asian nations alongside Japan, Brunei, Canada, Mexico, Chile, Peru, Australia and New Zealand.
The deal was signed in February and it offers free entry of textile products into the U.S., a move likely to threaten Africa’s economic gains from its clothing exports there.
“African nations should strengthen their skills base and build competitive textiles and garment industries, and seize markets in other economies apart from the US,” Mupotola added.