Oct 17, 2016
Lesotho government to localise textile manufacturing
Oct 17, 2016
The government of the African country Lesotho aims to localise the textile manufacturing industry of the country which is currently dominated by foreign investors.
For this purpose, Joshua Setipa, Lesotho’s minister of trade and industry has promised to provide subsidised factory spaces as well as credit lines to local garment manufacturers.
The textile sector of Lesotho is the largest employer in the country’s private sector with over 40,000 workers and the government aims to make it sustainable for the long term. Foreign investors may shift base to other countries like Cambodia after ten years, meaning Lesotho will not be able to achieve the sustainability that it wants, said Setipa.
Agreements like the U.S. Africa Growth and Opportunity Act (AGOA) encouraged foreign firms to invest in the garment manufacturing industry of Lesotho. Introduced in the year 2000, the agreement allows more than 6,400 products manufactured in sub-Saharan African countries to be exported duty-free to the US.
Lesotho benefitted from the agreement and increased its garment exports to the US from $140 million in 2000 to $330 million in 2015. Currently, the country exports close to 80 per cent of its textiles and garments to the US, said African media reports. It produces over 100 million garments annually.
The minister also promised a bigger factory space for Afri Expo, a small business that produces garments for major South African retailers.
This move is likely to help local manufactures like Afri Expo to expand their business and take a major share in the country’s textile and garments exports.
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