THE government has pledged to support Basotho businesses that have significant potential in the textile and apparel industries, despite continued issues with restricted access to finance, high transportation costs, and a lack of skills, among other hurdles.

The sector, which is by far the largest private sector employer in Lesotho, was adversely affected by the impact of COVID-19, resulting in a couple of firms closing while hundreds and thousands of people lost their jobs.

Despite playing host to the textile sector for almost two decades, the percentage of Basotho owners in the sector is almost close to nothing, with just a few individuals pushing for a breakthrough.

With USD 52.5 million (M965 209 875 00) in financing from the World Bank, the textile and apparel industry has been targeted as one of the main beneficiaries, with a direct focus on promising Basotho enterprises.

The financing comes under the Competitiveness and Financial Economic Programme (CAFI) that was introduced by the government in April.

The total budget of the project is USD 52.5 million (M965 209 875 00), comprising USD 45 million (M827 100 900 00) as a loan from the World Bank and USD 7.5 million (M137 786 025 00) as a grant from the Global Risk Financing Facility (GRIF) to strengthen the resilience of the Lesotho private sector to climatic shocks.

“The second pillar is increasing the participation of Small and medium-sized enterprises in high-potential value chains. Our specific focus in this context is on one sector that creates employers in the private sector, which is the textile and garment industry.

“The sector was adversely affected by the impact of COVID-19. We seek to revitalise this sector, and special attention will be paid to promoting Basotho enterprises in this particular sector. We are going to ensure that Basotho businesses participate in global value chains,” CAFI Project Manager, Chaba Mokuku said recently.

The growth of the textile industry in Lesotho can be traced back to the early 2000s and is largely the result of the African Growth and Opportunities Act (AGOA), a United States trade agreement that gives eligible African countries duty-free access to its markets.

In recent years, it has felt the effects of the slowdown in the US, coupled with uncertainty over whether the agreement will be renewed in its current form and increasing competition from countries such as Vietnam and Bangladesh.

The industry employs around 40 000 workers, which, however, is below its early 2000s peak of about 54 000 workers.

Since the 2020 COVID-19 pandemic in Lesotho, the industry has been suffering a huge decline in employment due to a number of firms struggling to survive. To date, firms remain closed, with others struggling to keep going.

Arguably, the promises that are being made by the government towards revitalising the sector are neither here nor there, considering a series of developments over the years.

Governments have always made empty promises regarding the sector, let alone ensuring the inclusion of Basotho entrepreneurs in it.