Berliner Boersenzeitung - Lesotho fears Trump shake-up could tear threadbare economy

Buy sportswear from US retail giant Walmart or blue jeans at South Africa's apparel behemoth Mr Price and there is a half-decent chance it was stitched on the floor of this garment factory in the capital Maseru which counts 400-odd employees.

Although modest in size compared to global textile powerhouses like Bangladesh and China, the tiny mountain kingdom's clothing industry is the country's largest employer with more than 35,000 workers, according to official data.

These workers are now fretting over their future after Trump this month called Lesotho "a country nobody has ever heard of" while defending his sweeping aid cuts.

"I was lost for words when I heard him speak. He thought we were useless to him," Motlatsi Marou told AFP, a streak of sweat dripping from his face as he ironed grey pants at the Afri-Expo Textiles company.

The 33-year-old has worked at the company for two years in his longest stretch of steady employment.

Production manager Malerai Snay Mosotho was equally taken back by Trump's comments before the US Congress.

"It's something that we didn't expect," the 30-year-old said. "It made me feel bad because we are doing a lot of good work," she said.

- 'A lot of uncertainty' -

Completely surrounded by South Africa, Lesotho is the largest of just three enclaved states in the world, far bigger than San Marino and Vatican City, both within Italy.

Nicknamed the "kingdom of the sky", the country the size of Belgium is heavily reliant on export for its $2 billion GDP, mostly through textile products bound for the United States.

The items are shipped more than 15,000 kilometres (9,300 miles) to the United States under the African Growth and Opportunity Act (AGOA) deal, which provides duty-free access for some products from about 30 sub-Saharan African countries.

Under the accord, Lesotho lags behind just Kenya, South Africa and Madagascar in terms of non-oil exports, earning $167 million in 2023.

Until 2019, the nation of an estimated 2.3 million people was the second-largest textile exporter to the United States under AGOA.

The law which came into force in 2000 is up for review in September, but analysts warn its future is in doubt.

"If AGOA is terminated, it will have an immediate impact on the economy because it could mean the loss of jobs for 30,000 to 40,000 people," King Letsie III told AFP in his palace in Matsieng, some 45 km from Maseru.

Unemployment is already high at nearly 25 percent in 2023, according to the World Bank.

Any end to the trade deal would have a profound ripple effect on every sector of Lesotho's economy, said Malira Sekonyela, trade manager at the Lesotho National Development Corporation (LNDC).

"There is still a lot of uncertainty around AGOA renewal with the new administration," she said.

Already, the textiles industry alone shed more than 1,800 jobs in 2024 after five companies ceased operations because of lower demand from the United States, according to LNDC.

"It is difficult to find work," Karabelo Magapalla told AFP as she marked denim for trimming.

Only employed since September, the 23-year-old earns 180 loti a day ($10) from work she describes as "stressing and depressing".

But at least she is only supporting her grandmother, she said, unlike others who provide for a constellation of relatives.

- 'Wake-up call' -

Trump's dismissive attitude to Lesotho was "a wake-up call" for the kingdom's textile industry, said Teboho Kobeli, who founded Afri-Expo Textiles in 2016.

African countries must send strong delegations to renegotiate AGOA and actively explore untapped markets, especially in Europe, the businessman urged.

"The era of being beggars, getting things for nothing, is over," he said.

On the streets of the diamond-rich nation, many echoed his sentiment.

"Africa can survive without him (Trump)," declared 57-year-old Maleshoane Mokhaji. "He can keep his dollars and then we keep our minerals. Period!"

(B.Hartmann--BBZ)