Maseru — With more than M1.5 billion investment envisaged in the expansion of the textile industry in Lesotho, the Government of Lesotho will have to dig out more than M120 million to meet the demands of the growing industrial activities in the country.

Trade and Industry Minister, Mpho Malie, says government will have to find this money in order to ensure increased employment, sustainable jobs, economic growth and poverty eradication. "The new investments will bring about five thousand (5,000) new jobs by Easter, with the number expected to double or triple within the next two to three years," the minister said.

He said the money that government will have to fork out from the public funds will be towards the setting up of proper infrastructure for the expanding industry to function well. Some of the major works to be done will include building of new industrial sites, good roads and proper facilities, such as bus stops and others for the increasing workforce.

Malie said the recently signed African Growth and Opportunity Act (AGOA) by Lesotho and other regional sisters with the United States, has brought about a number of opportunities for investors in the country. "While our investors will benefit from the advantages of zero tariffs and quota free market penetration, the new agreement will also ensure that they enter a competitive market with a strong base," he said.

He explained that Lesotho will concentrate on the clothing and garment industry because there is already a strong base in the country. He further said the textile industry is very labour intensive. "Most of our labour used to be outside the country and with more factories opening up in the country we will be able to absorb most of the unemployed people with the multiplier factor that will be brought about by new jobs," Malie added. The unemployment rate in Lesotho is estimated at over 42%.

Some of the expansion programmes that Malie mentioned, saying they were a direct influence of the AGOA agreement, include amongst others expansion by CGM Industry and another by C& Garments who have already started at the Thetsane Industrial area. Another will be in Maputsoe area by Precious garments also in the Denim Mill.

He added that more satellite factories are expected to come up, which will supply and service the major firms. These include a factory to make buttons and zips, embroidery and other garment related services.

The Minister also made mention that while Lesotho has a strong base in the textile industry, other areas such as electronics could also be expanding. "We have already received expression of interests from a number of serious investors in this field," he said, adding that in the past the electronics market was mainly in South Africa, but now with the American and European markets opening, more investments could be coming to Lesotho.

He however said big and expanding industrial activities also come along with problems, saying apart from ensuring safety of people and good service facilities, the government will also have to work hand in hand with the security to ensure a clean industry. "We have to avoid fly-by-night type of investors as well as crooks who come here pretending they are serious investors," Malie said.

The government will soon be expanding the industrial sites in the country with both the Maputsoe and Thetsane sites almost full. With the recently established government Industrialization Technical Committee (ITC), sites have already been identified at Ha Tikoe in Maseru and Butha-Buthe to be developed.

The US Charge d'Affairs in Maseru, Daniel Bellegarde thinks the recent signing of the AGOA trade agreement between Lesotho and the United States could bring a lot of opportunities not only in the export earnings for Lesotho but also in job creation. "Lesotho has a fairly large advantage with the present strong garment industry," he said, adding that there are already success stories in the region, like Mauritius which he said Lesotho could soon follow in their steps.

While Bellegarde said there wasn't a lot of involvement at the government level in the AGOA implementation, he however said his office and the relevant ministries in the government of Lesotho are doing all in their best to ensure the necessary protocol calls have been satisfied.

Chairman of Lesotho Exporters Association, Adrian Chang, of CGM Industry, also in an exclusive interview told Mopheme that ten more factories could be opening very soon in Lesotho. "With more investors coming in, we need efficient services like electricity and water to meet the demands of the big markets," he said.

He appealed to all Basotho to work together as a unit with the investors to make the textile industry in the country a big success. "We now all need patience and hard work and through this we should be able to resolve our past misunderstandings, especially with the workers and unions," he added.

Chang said as far as his association is concerned, Lesotho has many opportunities to see real economic growth, but added that the real future is in the textile industry. He believes that in the next ten or more years, the textile industry alone will be able to absorb even up to 100,000 workers. Presently, the Thetsane industrial site alone, with 87 major factories and three small ones is estimated to have around 15,000 workers. Other areas like the old Maseru industrial, Maputsoe and Nyenye extension could add up another 10,000 or a bit less.

Union leader Billy Macaefa also thinks the AGOA agreement will not only bring jobs in the country, but also other opportunities, especially for the workers to see the need to unite. "We have to carefully monitor these expansions and ensure that the workers are getting the best out of it," he said.

Billy however has reservations about big expansions, saying the SADC countries must find a way through which the states in the AGOA agreement could maximise the benefits. "Does it mean we will only benefit from jobs and nothing else?" he asked.

He said governments should also find a way of boosting and empowering their own locals to take over the running of the industry. "We already have a number of Basotho on top factory management, why not train them further so that they can run own factories in joint-ventures?" Billy asked, adding that the AGOA agreement should not come and go without Basotho being able to do things on their own and the country being economically independent.

With more expansion and opening of new factories in the country, more activities will be seen in the country, with the Cotton Council planning to bring a trade mission in Lesotho early this year. Also on the cards are visitations and fact finding missions by international labour movements, market brokers from the US and investors exploring opportunities in the country. Amongst some of the investors expected in the first half of the year are a group of Malaysians who have been engaged in a series of talks with government officials resulting from the Smart Partnership meetings.

The African Growth and Opportunity Act (AGOA) is part of the Trade and Development Act of 2000 by the United States. AGOA provides beneficiary countries in Sub-Saharan Africa with the most liberal access to the US market available to any country or region with which the US does not have a Free Trade Agreement. AGOA reinforces African reform efforts, provides improved access to US credit and technical expertise, and estblishes a high level dialogue on trade and investment as part of a US-Sub-Saharan Africa Trade and Economic Forum.