AGOA 3 Should not Leave Basotho Complacent - Malie

Lesotho does not expect that her textile industry will be protected by preferences indefinitely even though the Africa Growth Opportunity Act (AGOA) has been given a new lease of life with a three year extension, the Minister of Industry, Trade and Marketing, Mr. Mpho Malie, has warned.

The warning was delivered at a two day "Sharpening the competitive edge in the apparel industry" conference held in Maseru last week, where the Minister cautioned against complacency: "We must immediately, and in partnership, not only develop strategies to protect our industrial sector and the valuable employment that it has brought, but we must implement those strategies without delay," he said.

The Minister said Government acknowledges that it has a fundamental obligation to provide the support for competitive performance to flourish. The Ministry of Trade and Industry has invested enormous resources in ensuring that the infrastructure is in place for the Nien Hsing denim Fabric Mill to start operation shortly. 

"This investment should ensure the sustainability of jobs in the woven sector of the industry through 2008 and beyond, he said. There is a need to turn the attention to that part of the industry manufacturing garments from knitted fabrics. 

For the textile and apparel industry to survive and grow in the global market, Lesotho should ensure that everything is done to remain competitive. It is therefore now time for the country to develop and implement plans to ensure that her segment of the industry is ready to face the challenges beyond the extension of the special preferences.

"All of our industries must ensure that they are prepared to meet the challenges of the global market place and be ready to meet the challenges of increased competition as the erosion of our special trade preferences impacts on our competitiveness," Mr. Malie said.

Mr. Malie said the most effective way to do this is through the development of skills through training, adding that those that invest in building the capacity of their employees through training and mentoring and those that constantly reinvent themselves in response to changing market trends are the ones that inevitably prosper and succeed.
 

Chief Executive of the Lesotho National Development Corporation (LNDC), Mrs. Sophia Mohapi speaking at the conference, said despite the fact that the clothing and textile industry is performing well , it is also very fragile and under serious threat of market turbulence, specifically the AGOA.

According to statistics, Lesotho exports to the United States have grown from US Dollars 140 million in 2000 to almost US Dollars 400 million in 2003, she said.

"Jobs in the manufacturing sector, of which clothing and textile is the largest, have risen to over 50,000 from 20,000 in 2001, making the manufacturing sector the largest employer in the country for the first time
since independence in 1966." 

She said under AGOA, Least Developed Countries (LDC) including Lesotho were allowed to source fabric and yarn from anywhere in the world. However, she said, this provision for LDC's is set to expire on September 30 this year, resulting in less favourable provisions and increased global competition.

The AGOA acceleration ACT of 2004 (AGOA III) is currently under discussion in the US Congress and when passed into law will extend this opportunity beyond 2007. It is therefore imperative that within the limited time frame that this extension will provide, aggressive measures should be pursued that will ensure that in 2007, we are way ahead of where we are now.

The conference is co-hosted by the LNDC and ComMark Trust and has drawn together industrialists; representatives of trade unions; senior officials from the Ministries of Labour and Employment, Trade, Industry and Marketing as well as from United Nations (UN) agencies; Diplomatic missions and; non-governmental oganisations. 

19 May 2004