Overview
Textiles and apparel have been Lesotho’s largest private‑sector employer for two decades, exporting primarily to the United States under AGOA and to regional SACU markets. The sector supports roughly 30,000–40,000 jobs, predominantly women, but has faced recent shocks from tariff volatility and order cancellations, prompting an urgent need for market and input diversification. The textile and apparel sector plays a significant part in the economy, contributes about 10% of the GDP and is the main export industry.
Sector Structure and Key Facts
- Output: Sub-Saharan Africa’s proven AGOA performer with ~USD 460m total exports (2024), a workforce of ~40,000. U.S exports ~USD 236m (~26%), South Africa/SACU exports ~USD 453m (~50%), EU+UK exports ~USD 44m (~10%). (Source WITS).
- Products: Knits, denim jeans and workwear dominate; Formosa mill supplies yarn and denim locally.
- Trade: Significant share of exports go to the US under AGOA; regional sales to South Africa are growing.
- Employment: Largest formal private employer; strong female workforce participation. Historical employment peaked near 45,000–50,000; ~34,000 jobs reported in 2024 amid headwinds.
- Trends: Shift towards SSA markets; upstream inputs (trims, accessories) remain a gap.
Competitive Analysis
Established buyer relationships and compliance track record; competitive labour costs; proximity to SA retail/value chains; AGOA and SADC access; scope to localise inputs (fabrics, trims) for resilience.
Institutional and Legal Framework
- Ministry of Trade, Industry and Business Development – industrial policy, regulation, facilitation and infrastructure development.
- LNDC – industrial policy implementation; industrial estates, factory shells and aftercare.
- RSL and OBFC – export and import facilitation and documentation, and rebates
Incentives and Support Schemes
| Incentive Type | Details |
| Reduced Corporate Tax (Manufacturing) | Preferential rates replacing legacy tax holidays; 10%. |
| Customs and VAT Schemes | Duty drawbacks/rebates on inputs for export. VAT refunds. |
| Industrial Infrastructure | Factory shells and serviced land on LNDC estates; utilities facilitation. |
Key Investment Opportunities
Upstream inputs (trims, accessories, knit fabric); SSA market diversification; sustainability upgrades (water/energy efficiency); skills academies and design services.
Other Investor Information:
Global trade volatility requires risk management; buyers increasingly demand ESG compliance; logistics reliability and lead‑times drive competitiveness.
Compliance and Participation Strategies:
Meet rules of origin; maintain social/labour compliance; manage wastewater and energy efficiency; ensure customs/export documentation integrity.
Key Takeaways:
- Anchor export and employment sector.
- Diversifying markets and inputs is urgent.
- Efficiency and ESG upgrades can unlock new buyers.
Checklist for Foreign Investors
- Confirm export market preferential scheme eligibility
- Set up input rebates
- Confirm export market Rules of Origin (RoO) and documentation requirements (certificate of origin, standards and certification)
- Invest in efficiency/ESG
- Build SSA retail links