The Private Sector Foundation of Lesotho has warned that the country risks missing major continental trade opportunities if it delays implementing the African Continental Free Trade Area (AfCFTA). The organisation says Lesotho must diversify its export markets, strengthen industrial growth, and accelerate AfCFTA implementation to reduce reliance on traditional markets and build a more resilient economy.
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The Private Sector Foundation of Lesotho (PSFL) has raised concerns over what it describes as Lesotho’s slow pace in preparing for and participating in the African Continental Free Trade Area (AfCFTA), warning that growing geopolitical tensions and shifting global trade patterns require urgent action to reposition the country’s economy.
Responding to the findings of the recent African Trade Report 2026, the business advocacy body said Lesotho risks being left behind at a time when African countries are accelerating efforts to deepen regional trade and reduce dependence on volatile overseas markets.
The warning comes against the backdrop of mounting uncertainty in global trade, rising geopolitical tensions, supply chain disruptions and shifting alliances that are reshaping international commerce.
The African Trade Report 2026 argues that these developments make the rapid implementation of the AfCFTA more urgent than ever, as African countries seek to strengthen economic resilience through greater continental integration.
According to the report, Africa must move quickly to convert global fragmentation into an opportunity for industrialisation, value addition and sustainable trade growth. The report further identified stronger regional cooperation, improved competitiveness, infrastructure investment, innovative financing, and accelerated AfCFTA implementation as critical pillars for achieving this objective.
And the PSFL believes the message could not be more relevant to Lesotho’s domestic economic situation.
“The report highlights that Africa’s merchandise trade is increasingly intra-regional, with the AfCFTA offering a critical pathway for diversification. Lesotho has already ratified the COMESA-EAC-SADC Tripartite FTA, and developed a National AfCFTA Implementation Plan, but private sector uptake remains limited, with only 5.3% of firms focusing exclusively on exports,” PSFL said.
In a statement to Newsday, the foundation said the country’s cautious approach to AfCFTA implementation is particularly concerning given the challenges that have emerged in its traditional export markets.
Lesotho’s economy has long depended heavily on textile exports to the United States under the African Growth and Opportunity Act (AGOA). However, uncertainty surrounding AGOA, coupled with new tariff measures introduced by the United States, has exposed the vulnerability of an economy concentrated in a single export sector.
Recent international assessments have also highlighted the growing pressure on African exporters following shifts in global trade policy and the need to diversify export destinations.
The PSFL noted that the expiry of AGOA preferences in September 2025 and subsequent tariff measures have already had serious consequences for Lesotho’s textile industry.
“The report emphasises that geoeconomic fragmentation, shifting alliances, and trade route disruptions are reshaping global trade. For Lesotho, this is particularly acute: the expiration of AGOA in September 2025 and subsequent US tariffs (temporarily reduced from 50% to 15%) have already triggered factory closures, order cancellations, and significant job losses in the textile sector, which accounts for approximately 58% of exports and 43% of export earnings.”
The foundation argued that these developments demonstrate why Lesotho can no longer rely predominantly on extra-African markets and must instead position itself to take advantage of a continental market of more than 1.4 billion people.
The African Trade Report 2026 highlights AfCFTA as one of Africa’s most important economic instruments for building resilience against external shocks. The report notes that intra-African trade is expected to continue growing as member states accelerate implementation of the agreement.
Yet despite the opportunities, the PSFL believes Lesotho has not moved fast enough. Among its recommendations is the immediate operationalisation of the National AfCFTA Strategy with dedicated funding and clear implementation targets.
The organisation also proposes the establishment of an AfCFTA Desk within the Ministry of Trade to provide one-stop support services for exporters seeking access to continental markets.
Such a facility, PSFL argues, would help businesses understand AfCFTA rules of origin, market access requirements, customs procedures and financing opportunities that currently remain beyond the reach of many small and medium-sized enterprises.
Beyond trade facilitation, the foundation also called for a broader restructuring of the economy. It said Lesotho must reduce its dependence on textiles by supporting growth in agro-processing industries such as horticulture, wool and mohair production, while also promoting light manufacturing and services exports.
The PSFL believes regional markets such as South Africa, COMESA and SADC offer immediate opportunities for Basotho businesses seeking alternative export destinations.
The call aligns closely with the African Trade Report’s broader recommendations. The report urges African countries to strengthen industrial ecosystems, promote value-added production, invest in infrastructure and develop regional supply chains capable of withstanding external shocks. It further stresses the importance of promoting “Made in Africa” products and expanding trade finance to support industrialisation.
Another area highlighted by the foundation is improving the business environment. The PSFL proposed the full implementation of the Business Licensing and Registration Regulations of 2020, which reserve 47 business sectors for indigenous Basotho participation while maintaining an attractive environment for foreign direct investment.
In addition, it recommends streamlining customs procedures, reducing administrative bottlenecks and expanding e-government services to lower the cost of doing business.
The African Trade Report also places considerable emphasis on digital trade infrastructure and financial integration. It notes that the Pan-African Payment and Settlement System (PAPSS) is gaining momentum across the continent by reducing transaction costs and lowering dependence on foreign currencies such as the US dollar and euro.
More central banks are joining the platform as Africa seeks to facilitate cross-border commerce more efficiently. The report’s central conclusion is that Africa can no longer afford a business-as-usual approach in an increasingly fragmented global economy.
With geopolitical tensions continuing to disrupt trade routes, supply chains and investment flows, countries that move quickly to strengthen regional integration and industrial competitiveness will be better positioned to withstand future shocks. Recent international assessments have similarly warned that geopolitical tensions are becoming one of the biggest risks to global trade and economic growth.
Summary
The Private Sector Foundation of Lesotho (PSFL) has raised concerns over what it describes as Lesotho’s slow pace in preparing for and participating in the African Continental Free Trade Area (AfCFTA), warning that growing geopolitical tensions and shifting global trade patterns require urgent action to reposition the country’s economy.
Responding to the findings of the recent African Trade Report 2026, the business advocacy body said Lesotho risks being left behind at a time when African countries are accelerating efforts to deepen regional trade and reduce dependence on volatile overseas markets.
the expiration of AGOA in September 2025 and subsequent US tariffs (temporarily reduced from 50% to 15%) have already triggered factory closures, order cancellations, and significant job losses in the textile sector, which accounts for approximately 58% of exports and 43% of export earnings.
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