Lesotho has declared a national economic emergency following a sharp downturn in its textile sector, triggered by new U.S. tariffs on garment exports. The emergency, effective through June 2027, aims to address rising unemployment and factory closures.
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The textile industry, which accounts for 90% of Lesotho’s manufacturing exports and employs about 40,000 workers, has been hit hard since the U.S. imposed a 50% tariff, later reduced to 10%, earlier this year. According to government officials, the move led to mass cancellations of orders and a spike in unemployment, with youth joblessness nearing 50%.
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The government has introduced a stimulus package focused on youth employment, SME support, and informal sector participation. Lesotho’s reliance on duty-free access under the African Growth and Opportunity Act (AGOA) remains a key concern, as the program faces possible expiry in September.
Authorities are now looking to diversify the economy through regional trade under the African Continental Free Trade Area (AfCFTA), though limited infrastructure and fiscal space continue to pose challenges.
