Stitching Lesotho into the Global Economy

By Lerato Matheka

 

Every Wednesday morning at precisely 7:00, the Ministry of Trade and Industries’ boardroom doors closed. Anyone arriving late stayed outside.

There were no lengthy speeches or bureaucratic excuses. Around the table sat the minister of trade, permanent secretary, directors, utility executives, immigration officials, bankers, factory owners and trade union representatives.

For one hour every week, politics gave way to problem-solving with every discussion centred on one question: What was preventing Lesotho’s factories from growing?

“There was one rule,” recalls former Trade Minister Mpho Malie. “Once the meeting started, nobody was allowed in because they would disrupt us. That boardroom was a war room of intention to grow Lesotho’s industries.”

At the turn of the millennium, landlocked Lesotho had a small domestic market and an economy largely dependent on subsistence farming, remittances and government employment. Yet within a few years, its textile and apparel workforce grew from about 17,000 to around 54,000 workers, according to Malie, while garments became the country’s largest private employer and one of its biggest export earners.

The catalyst was the African Growth and Opportunity Act (AGOA), which granted qualifying African countries duty-free access to the United States market. But Malie argues AGOA alone did not transform Lesotho: “AGOA created the opportunity. We created the system.”

That system changed the lives of thousands of Basotho women who had never heard of AGOA but whose livelihoods came to depend on it.

The women behind the exports

Tokelo Thabane left her rural home in Botha-Bothe searching for work. Ten years later, she works at Global International, a garment factory producing denim for international and regional brands.

Like many factory workers, Thabane has worked in different departments and picked up many skills, making her one of the factory’s most experienced employees. She smiles when she walks through shopping malls and spots Redbat jeans displayed on shelves.

“We manufacture Redbat,” she says proudly.

“When I see those expensive brands in the shops, I always smile because I know those are the works of my hands and the people I work with.”

Like many factory workers, she earns wages that support extended family members in the countryside. “The pay has never been enough,” she says, “but I have learned how to budget well enough to support multiple families.”

Building an industry, not just factories

Malie says the government quickly realised that trade agreements alone would not attract investors. Factories also needed reliable electricity and water supplies, efficient immigration services, quick work permits, access to foreign currency, and responsive government institutions.

“Every Wednesday morning, each problem had someone responsible for it. We didn’t want explanations; we wanted answers.”

Trade unions, manufacturers and government officials were brought into the same room. Many of the manufacturers were Taiwanese investors, who soon began recommending Lesotho to their international partners because government departments worked together and problems were resolved quickly.

One of the country’s biggest successes was attracting a US$100 million denim investment despite competition from neighbouring Eswatini.

The results were dramatic. Research by Anandita Dhaka of University College London found that textiles contributed about 19.2% of GDP by 2020, while during its strongest years, the industry accounted for roughly 60% of Lesotho’s exports. The sector also dramatically expanded women’s participation in formal employment.

Manufacturing remains the country’s largest formal employer. According to the Lesotho National Development Corporation (LNDC), employment in assisted manufacturing companies fell from 51,325 workers in 2020 to 34,151 in 2024 following factory closures, weaker global demand and post-pandemic restructuring.

LNDC Corporate Communications Manager Tiisetso Moremoholo says the country’s next challenge is no longer simply attracting factories but building greater domestic value.

“Our role is to act as a catalyst for structural transformation by expanding exports, strengthening domestic productive capabilities, diversifying industry and helping Lesotho move up regional and global value chains,” she says.

A salary that changed everything

For workers such as Marethabile Qhooa, who left her rural home in Mafeteng believing Maseru offered possibilities unavailable in the countryside, employment brought dignity despite modest wages.

“As little as it was, it changed my life,” she says. “There was dignity in knowing I could provide for my family.”

Somafi Nyofane has spent seven years working as a quality controller.

“The factory changed my life,” she says. “I can provide food for my family, but other daily needs remain difficult.”

Years on the production line have given her important technical experience, and she feels pride in her work: “Lesotho isn’t recognised enough. Many people don’t know that their jeans are assembled and stitched by the hands of Basotho women and men.”

When the machines fell silent

The COVID-19 pandemic marked the first major shock to an industry that had spent two decades expanding. Cancelled export orders, weaker consumer demand, higher shipping costs, and uncertainty around preferential trade arrangements such as AGOA forced factories to reduce shifts or close.

According to the Central Bank of Lesotho’s 2025 Financial Stability Report, exports to the United States declined by 9.9%, more than 10,000 textile jobs were lost, and economic growth slowed to 1.3%.

US President Donald Trump’s tariffs were another blow. First, an arbitrary 50% rate was applied, but this was then reduced to a 15% reciprocal tariff.

AGOA has been extended to December 2026, but the challenge remains. An analysis by the Overseas Development Institute argues that repeated short-term AGOA renewals create uncertainty for investors and disproportionately affect women, who make up most of Lesotho’s garment workforce.

This sector of the workforce bears the greatest burden when production slows because women are often the primary earners supporting extended families.

Moremoholo argued that Lesotho’s challenge is no longer simply to attract investment but to transform the structure of the economy by expanding exports, strengthening domestic productive capabilities, diversifying industry and moving up regional and global value chains.

“Our ambition comes against a difficult backdrop of the decline in employment. Our findings show employment in assisted manufacturing companies fell from 51,325 workers in 2020 to 34,151 in 2024, reflecting factory closures, weaker global demand, and the sector’s ongoing adjustment after the pandemic. This challenge has informed the decision to turn LNDC into a catalyst for structural transformation rather than merely an investment facilitator.”

Outside the factories, those pressures are visible

After 17 years in the garment industry, Selloane Shemane recently lost her job. Every morning, she joins dozens of former workers waiting outside factory gates, hoping supervisors will call for workers with their skills.

“For seventeen years, this industry put bread on my table,” she says, “today, many factories have closed, and we come here to queue and hope.”

Economic Freedom Trade Union representative Tsepang Makakole says garment workers once sustained the wider economy.

“Factory workers with little education and low incomes carried Lesotho’s economy on their shoulders,” he says.

More than two decades after AGOA first opened the American market, Malie believes Africa’s industrialisation debate still focuses too heavily on trade agreements rather than the institutions needed to support them.

“Investors wanted to know that if there was a problem with electricity, water, immigration or permits, someone would solve it,” he says.

As African countries look to opportunities under the African Continental Free Trade Area, he argues that market access alone will not deliver industrialisation.

“A trade agreement opens the door,” he says. “What matters is what you do after you walk through it.”

Lesotho’s garment industry may no longer be growing at the pace it once did, but its experience offers an enduring lesson: trade creates opportunity, while capable institutions and coordinated leadership turn opportunity into jobs, exports and economic transformation.