The apparel industry has been central to Lesotho’s economy. It accounts for around one third of the country’s gross domestic product and employs 80 percent of its manufacturing workforce. The possibility of Lesotho embarking on an industrialisation path depends on the sectors prospects. This country case study examines the interplay between two different sets of foreign direct investment (FDI) driving two very different value chains: the one global, with FDI from Asia and production based on preferential access to the US market under the African Growth and Opportunity Act (AGOA); the other regionally based, with FDI from South African firms relocating production in Lesotho. The analysis of the differential impacts of these value chains makes the Lesotho case particularly interesting, revealing different paths to sustainable development.
Written by Mike Morris , Justin Barnes, Moshe Kao