31.5% without AGOA. 15% with it.

Can Lesotho really survive either?

Lesotho’s textile and apparel sector, a cornerstone of the economy and the country’s largest private employer, has gained temporary relief with the United States’ approval of a one-year extension of the African Growth and Opportunity Act (AGOA).

Signed into law by President Donald Trump on February 3, 2026, the extension revives AGOA retroactively from its expiration on September 30, 2025, and runs through December 31, 2026. The program historically grants duty-free access to the U.S. market for qualifying African exports, including textiles and apparel, supporting thousands of jobs in Lesotho.

However, the reprieve remains partial due to a 15 percent reciprocal import tariff imposed by the U.S. in 2025 as part of broader reciprocal tariff policies. This levy continues to apply even under AGOA, undermining the zero-duty benefit that once defined the program and eroding Lesotho’s price competitiveness in a cost-sensitive market.

Without AGOA, Lesotho’s exports would face World Trade Organization most-favoured-nation rates, such as 16.5 percent duties on cotton-made products, plus the 15 percent reciprocal tariff, totaling 31.5 percent.

“This is why it was very important for us to get AGOA renewed,” said Minister of Trade, Industry and Business Development Mokhethi Shelile. “With AGOA, we remain at zero percent plus the 15 percent tariff. Without it, it would have been 31.5 percent, which would kill competitiveness.”

The tariff’s announcement last year triggered immediate hardship, including temporary factory shutdowns, lost orders, and stalled production. Investors hesitated to commit new capacity to Lesotho, where market access comes with narrowed profit margins.

The renewal caps a three-year advocacy effort and covers the previous four months from September 2025. Shelile described it as a hard-won but short-term victory.

“I’m optimistic that we are going to get something long term at the end of the day because I am not satisfied with one year. It is not a conducive timeline for our businesses,” he said. “We have to work today to get the USA to provide a framework of a proper trade policy for Africa, maybe one that replaces AGOA or fine-tunes it.”

The government is pursuing dual strategies: securing a more durable AGOA framework and reducing the 15 percent tariff. Shelile pointed to Kenya’s 10 percent rate as a benchmark and noted ongoing negotiations.

“We are currently in negotiations with one of the producers here to start buying raw materials like cotton from the USA,” he said. “According to our calculations, this could bring the tariff down to around 10 percent for that specific industry. The buyer is the one who identifies where the producer should source raw materials. We are working for that to change.”

Despite the added costs, Shelile expressed confidence in Lesotho’s competitiveness through productivity and logistics to ports, even if delivery times are longer.AGOA remains vital for Lesotho’s factories, many producing sportswear for the U.S. market. The sector supports communities through employment and local sponsorships, including in sports.

The U.S. has signaled that discussions for a longer-term arrangement should begin immediately. “The one year was designed to be a stop-gap measure while we are talking about AGOA,” Shelile said.

He highlighted the mutual benefits of the pact, noting that U.S. exports to Africa have grown faster than African exports to the U.S., and more than 350,000 U.S. jobs depend on related trade, warehousing, and logistics.

While the extension ends months of uncertainty for Lesotho’s garment workers and factories, the lingering tariff and short timeframe leave the industry’s long-term future dependent on swift progress in U.S.-Africa trade talks.

Seabata Mahao

Seabata Mahao is a general news reporter with special focus on Business and Sports. Started working at Newsday in 2021. Working in a team with a shared goal is what I enjoy most and that gives me the motivation to work under any environment leading to growth.