Lesotho’s single largest employer, the textile industry, has made a remarkable comeback, setting an example for the region and giving thousands back their jobs.
”All the factories that were closed have been reopened — the number of jobs that had shrunk from just more than 50 000 to less than 40 000 have now climbed back to about 47 000,” Andy Salm, regional textile and apparel specialist at ComMark Trust, an NGO that monitors the industry in Southern Africa, told Irin.
Lesotho was an early victim of cheap Chinese exports to the key United States market when the World Trade Organisation’s 30-year-old Multi-Fibre Agreement (MFA) expired last year. The MFA was established to protect smaller textile industries in developing countries by insulating them from Chinese competition.
But the industry was now ”significantly picking up and a lot more orders are now being placed in Lesotho again”, Salm said. One of the reasons large retailers and brands have returned to Lesotho is that the ”government has been working hard to become a destination of ethical choice, and this has started to pay off”.
”We have seen a strong increase of demand from the US and more recently from Europe,” said Bahlakoana Shaw Lebakae, deputy secretary general of the Lesotho Clothing and Allied Workers Union.
Lesotho has even grabbed the attention of U2 rock band singer and global campaigner, Bono, who launched a new labelling scheme in January, known as Product Red, to generate funding from top commercial brands and consumers to fight HIV/Aids in developing countries. Bono recently visited Lesotho’s textile industry.
With commitments from brands such as Levi, GAP and Nike, and consumer consciousness in the US and Europe on the rise, Lebakae had ”high hopes that orders will continue to come into Lesotho”.
Salm cited the Apparel Lesotho Alliance to Fight Aids (Alafa) as an example of a broader move to enhance the industry’s reputation as a socially responsible source of clothing for famous brands, commenting that Alafa aimed to fight HIV/Aids in Lesotho’s garment industry, and ”these brands like looking after their employees”.
Lebakae said Lesotho was also benefiting from the MFA forum, a network of companies, trade unions, NGOs and international institutions working to mitigate the impact of the MFA phase-out: ”Lesotho and Bangladesh are part of an ethical trade agreement through an MFA forum pilot programme that aims to attract large brands and retailers to source in Lesotho.”
According to Salm, the industry’s revival could not be attributed to a change in consumer consciousness alone, and noted when comparing Lesotho to other countries in the region there were ”a number of lessons learned”, which others might want to consider. One of the key factors was that ”the cost of employment is much lower than in other countries, such as South Africa”, he said, where the textile industry was in dire straits.
”Companies are showing increased interest in Lesotho because they appreciate the engagement of the government — the minister of trade and industry is very receptive to working with the industry and comes together with key players every two weeks to work out any issues there might be,” he said. Lesotho has also made concerted efforts to develop strong relationships with buyers and ”clear bureaucratic red tape”, a significant contribution to turning around the industry.
But Lebakae cautioned that with ”100% of the textile industry foreign owned”, mostly by Asian investors, there was room for improvement.
Lesotho had welcomed foreign textile industry investors when officials thought the African Growth and Opportunity Act (Agoa), which granted duty-free access to the lucrative US market, would give the country a chance of establishing a sustainable textile industry. ”But they [foreign investors] all left,” Lebakae said.
However, Salm expected foreign investment to stay: ”About 95% of Lesotho’s textiles go to the US, and there is new interest in Lesotho as anticipation grows that Agoa [due to expire in 2007] will be extended.”