TRALAC - Trade Law Centre

Lesotho: 6 Textile Factories Shutting Down

Wednesday, 12 January 2005

Source: News24 (South Africa)

Maseru - Six textile factories have closed and their foreign owners fled Lesotho, leaving some 6 650 workers jobless in the small mountain kingdom in southern Africa, the Factory Worker's Union said on Wednesday.

LesothoThe union's secretary-general, Billy Macaefa, blamed the closures on the January 1 end of worldwide textile quotas that limited competition from cheap Asian exports to the United States and European Union.

"We understand that some ... were complaining that the South African rand was strong against the U.S. dollar, and they were losing when exporting textiles and clothing to the United States," Macaefa said at a news briefing in the capital, Maseru. "But we suspect that they left the country unceremoniously because of the end of quotas introduced by the World Trade Organization."

Lesotho's currency, the maloti, is fixed to the rand.

Macaefa identified the six factories as Leisure Garments, Modern Garments, Precious Six Garments, TW Garments, Lesotho Hats and Vogue Landmark.

Their owners - two from Taiwan, two from China, one from Mauritius and one from Malaysia - left over the December holiday period without informing or paying their employees, he said.

Labour unions in the country completely surrounded by South Africa have been warning since last year that as many as 50 000 could lose their jobs when the WTO quotas were lifted.

They believe cheap Chinese-made clothing will flood the United States -Lesotho's main market - and manufacturers here won't be able to compete.

"We still expect more to leave in the very near future," Macaefa said.

Government officials did not immediately respond to the announcement, but said a news briefing was planned for Thursday.

Lesotho has emerged as sub-Saharan Africa's largest exporter of textiles to the United States, with the assistance of an American law which gives its textiles duty-free access.

It produced 31% of the textiles exported from Africa to America under the African Growth and Opportunity Act in 2003.



“AGOA Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Lesotho’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.