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Textile sector in Lesotho at crossroads
03 Nov '11
2 min read
The textile industry in Lesotho, a land-locked country surrounded by the Republic of South Africa, is in a predicament as the country's Government and the World Bank have unofficially withdrawn their support to the sector that employs the largest number of people in the country.
For many people in the Kingdom, where over 50 percent of the population survives on less than US$ 1.25 per day, getting employed in the textile sector is looked upon as the only way to break free from the poverty trap.
However, these people are not aware about the recent decisions of the domestic Government as well as the World Bank, who are soon likely to slash important subsidies.
The Kingdom of Lesotho has become a favourable textile production destination for the past few years due to the introduction of African Growth and Opportunities Act (AGOA), a tariff-preference programme designed by the US Government in 2004 with an intention to draw more businesses into Africa.
Taking advantage of AGOA, several investors from Asia set up their units in Lesotho. This led to an almost 300 percent rise in the textile sector jobs in the country where almost 50 percent of the people are jobless.
However, to the ignorance of the unions and textile producers in the Kingdom, Lesotho Government has decided to withdraw from the textile industry and slash the subsidies provided to the sector and invest in water management and agriculture industries.
Earlier in February this year, Lesotho Prime Minister Pakalitha Mosisili too extended a clue regarding the Government's stand as he said that they need to shift their focus form textiles to other sectors.
The Kingdom's Government has been working on the development of the new sectors since 2009, while drawing assistance from the World Bank. At the end of the pilot stage in 2013, the Government would formally adjust its economic policy to raise its investments in most budding sectors.
This would jeopardize the future of thousands of workers currently employed in the country's textile industry.
For many people in the Kingdom, where over 50 percent of the population survives on less than US$ 1.25 per day, getting employed in the textile sector is looked upon as the only way to break free from the poverty trap.
However, these people are not aware about the recent decisions of the domestic Government as well as the World Bank, who are soon likely to slash important subsidies.
The Kingdom of Lesotho has become a favourable textile production destination for the past few years due to the introduction of African Growth and Opportunities Act (AGOA), a tariff-preference programme designed by the US Government in 2004 with an intention to draw more businesses into Africa.
Taking advantage of AGOA, several investors from Asia set up their units in Lesotho. This led to an almost 300 percent rise in the textile sector jobs in the country where almost 50 percent of the people are jobless.
However, to the ignorance of the unions and textile producers in the Kingdom, Lesotho Government has decided to withdraw from the textile industry and slash the subsidies provided to the sector and invest in water management and agriculture industries.
Earlier in February this year, Lesotho Prime Minister Pakalitha Mosisili too extended a clue regarding the Government's stand as he said that they need to shift their focus form textiles to other sectors.
The Kingdom's Government has been working on the development of the new sectors since 2009, while drawing assistance from the World Bank. At the end of the pilot stage in 2013, the Government would formally adjust its economic policy to raise its investments in most budding sectors.
This would jeopardize the future of thousands of workers currently employed in the country's textile industry.
Fibre2fashion News Desk - India
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