Lesotho on Wednesday declared a national state of disaster. REI’s decision comes at a time of record youth unemployment and overall job loss, exacerbated by recent adverse developments on the international trade front. The policy shift ends a more than year horrible 50% tariff the country was forced to endure. It’s a rate that was originally the highest ever levied by any country against any country by then President Trump in April. With the tariff currently paused, the future of Lesotho’s economy, highly dependent on the textile industry, remains in jeopardy. This economy is extremely fragile with current unemployment rates already devastating.
The textile sector has long been a cornerstone of Lesotho’s economy, particularly benefiting from the United States’ African Growth and Opportunity Act (AGOA). This trade agreement has been the key for Lesotho’s exports, mainly textiles and clothing, to the US market. In 2024, Lesotho exported goods worth around $240 million (£187 million) to the US. With AGOA up for renewal again at the end of September, concerns are mounting to do that very thing. Now this economic lifeline is under serious threat.
Unemployment in Lesotho is a daunting 30%, with higher rates almost double for the youth demographic, soaring to a rate of almost half. The administration has echoed this concern, stating that when AGOA is inevitably not renewed, as many as 40,000 jobs will be lost. Deputy Prime Minister Nthomeng Majara announced the extension of the state of disaster until at least 30th June 2027. This decision is even more consequential as the nation grapples with pressing economic crises.
Lesotho’s Trade Minister Mokhethi Shelile expressed the worry that adding tariffs would poison the relationship between the US and CO-ST countries. He discussed how US buyers are afraid to order anything because they don’t know whether they’ll face tariffs or other costs because of uncertain trade deals.
“They are not placing orders because they don’t understand what is going to happen.” – Mokhethi Shelile
In addition to trade difficulties, Lesotho has benefited from various US initiatives aimed at improving health outcomes, such as President’s Emergency Plan for AIDS Relief (PEPFAR), launched in 2003. These economic and health improvements are now at risk, given today’s harmful trade environment.
The government’s swift action to declare a state of disaster reflects the urgency of addressing economic instability and rising unemployment. Sadly, turbulent times are likely ahead for the Kingdom of Lesotho. The renewal of AGOA will be essential to the country’s long-term economic stability and the lives of thousands who depend on the textile sector.