Many of us have almost no knowledge or information of a tiny country named Lesotho. It is surrounded completely by Republic of South Africa in the southern tip of African continent. Lesotho has a total area of 30,555 square kilometres – less than one-fourth of the size of Bangladesh. Its estimated population is 2.1 million, less than 1.5 per cent of Bangladesh population. The gross domestic product (GDP) of Lesotho was estimated at $ 4.27 billion in 2013 which is less than one-fifth of garments export from Bangladesh; Bangladesh’s GDP was then $ 150 billion; this year (in 2016) it is estimated at $ 223.94 billion. Why are we comparing Bangladesh with the tiny Lesotho? Is there any similarity between these two countries? Yes, there is one – both the countries are pre-dominantly dependent on readymade garment (RMG) industry. Over the past few years, the garment industry of Lesotho has moved from being a marginal contributor to the economy to become a globally-integrated industry, assembling apparel products for some of the best-known brands in the world. This growth has been built on the preferential trade benefit generated from the US Growth & Opportunity Act (AGOA) and a partnership between the government and the private sector to take advantage of this market. Lesotho has taken advantage of the AGOA to become the largest exporter of garments to the US from sub-Saharan Africa. The US brands and retailers sourcing from Lesotho include Gap, Gloria Vanderbilt, JCPenney, Levi Strauss, Saks, Sears, Foot Locker, Timberland and Wal-Mart. In 2008 it exported goods worth 487 million dollars mainly to the USA. In 2007, the average earnings of an employee in the RMG and textile sector were $103 per month, and the official minimum wage for a general textile worker was $93 per month. Most of the investment is from Taiwan and mainland China. Neighbouring South African companies are also very active in the industry. The Formosa denim mill, a Taiwanese investment with more than US$100 million, uses African cotton to make 1.3 million yards of denim fabric a year, and 900 tonnes of cotton and cotton blend yarns, which are suitable to make knit fabrics. Lesotho’s textile and garment industry employs more than 40,000, workers, mainly women. It is the largest formal employer in the country, surpassing the public service. Many of Lesotho’s garment companies are subsidiaries of larger global textile and garment manufacturing corporations with manufacturing operations throughout the globe. There are approximately 40 factories specialising in both woven and knit garments. The woven include denim garments such as jeans, chinos corduroys, skirts, constructed trousers and jackets. The knit garments are mainly shirts, polo shirts, tracksuits, sweat shirts and fleece, as well as a growing range of other garments including industrial and office/formal wear. These are produced in 100 per cent cotton, poly cotton and synthetic fabric. The Lesotho readymade garment industry is one of the largest in sub-Saharan Africa (EU), and is the largest sub-Saharan African exporter of garments to the US. About 80 per cent of Lesotho’s textile and garment exports go to the US and exports to the US for 2008 amounted to US$340 million. Lesotho is now exporting increasing volumes RMG products to destinations in the European Union, Canada and South Africa. As a least developed economy (LDC), Lesotho products are extended preferential access to the United States, as well as the Southern African Development Community, the EU, Australia, New Zealand and Canadian marketplaces. South African retailers are the next biggest purchaser of Lesotho made garments. Its third largest customer is Canada’ followed by the EU retailers. Lesotho’s denim mill also exports denim fabric to Nicaragua, Hong Kong, Sri Lanka, Jordon, Kenya, Egypt, Madagascar, Mauritius and even Bangladesh. It sells significant volumes of ring spun yarn to regional textile mills.
Let’s widen our horizon further by knowing more on Lesotho.
It used to be known as Basutoland which was divided into different clan-based sovereign states. During the reign of King Moshoeshoe I in 1822, it was united as a single kingdom. Thereafter, this land has experienced numerous conflicts between British and Dutch colonists and had to lose Cape Colony to Britain. Cape colony was annexed subsequently to Orange Free State of South Africa. In 1838, Boers of Dutch and German descent claimed the western borders of Basutoland and tried to colonise the land. King Moshoeshoe subsequently signed a treaty with the British Governor of the Cape Colony who annexed the Orange River Sovereignty where many Boers had settled. In 1868, as per the request of King Moshoeshoe, British Queen Victoria agreed to make Basutoland a British protectorate. In 1869, the British signed a treaty with the Boers that defined the boundaries of Basutoland, and later Lesotho, which by ceding the western territories effectively reduced kingdom to half of its previous size. Despite Basutoland was a protectorate with supposedly having autonomous authority to run the country by traditional chiefs, initially it was treated similar to other territories that had been forcefully annexed. This angered the locals and led to a war in 1881. In 1884, Basutoland was restored its status as a protectorate, with Maseru its capital, but remained under the direct rule by a governor. In 1966, Basutoland gained its independence and re-named itself as the Kingdom of Lesotho with king as the ceremonial head of the country. The Lesotho government is a parliamentary or constitutional monarchy. The Prime Minister is head of government and exercises executive authority. The present king, Letsie III, serves a largely ceremonial function. The National Assembly is the lower house of Lesotho parliament. The upper house, called Senate, is composed of 22 principal chiefs whose membership is hereditary, and eleven appointees of the king, acting on the advice of the prime minister. Lesotho is the only independent state in the world that lies entirely above 1,000 meters in elevation. Its lowest point is 1,400 meters and over 80 per cent of the country lies above 1,800 meters. Due to its altitude, Lesotho remains cooler throughout the year than other regions at the same latitude. Capital city Maseru and surrounding lowlands often reach 30°C in summer. Winters can be cold with the lowlands getting down to -7°C and the highlands to -18°C at times. Snowfall is common in the highlands between May and September and the higher peaks can experience snowfalls year-round. Nearly a quarter of the population is infected with HIV. The apparel sector has initiated a programme to fight HIV/AIDS called Apparel Lesotho Alliance to Fight AIDS (ALAFA). It is an industry-wide programme providing prevention and treatment for the workers. Lesotho currently ranks 160 out of 187 on the UN’s Human Development Index, workers earn an average salary of US$ 50 per month and some 42 per cent of its citizens are jobless. Life expectancy for men is 41 years and for women, 39 years. The population distribution of Lesotho is 25 per cent urban and 75 per cent rural. However, it is estimated that annual increase of urban population is 3.5 per cent. Lesotho’s geographic location makes it extremely vulnerable to political and economic developments in South Africa. An African Union (AU) report called for economic integration of Lesotho with South Africa but stopped short of suggesting annexation. It is a member of many regional economic organisations, including the Southern African Development Community (SADC), and the Southern African Customs Union (SACU). It is also active in the United Nations, the AU, the Non-Aligned Movement, the Commonwealth, and many other international organisations. Lesotho is geographically surrounded by South Africa and economically integrated with it as well. The economy is based on agriculture, livestock, manufacturing and mining, and depends heavily on inflows of workers’ remittances and receipts from the SADC. The majority of households subsist on farming. The formal sector employment consists of mainly the female workers in the apparel sector, the male migrant labour, primarily miners in South Africa for three to nine months and employment in the government Diamonds are produced at the Letseng, Mothae, Liqhobong and Kao mines, which combined are estimated to produce 240,000 carats of diamonds in 2014, worth $300 million. The Letseng mine is estimated to produce diamonds with an average value of $2172/carat, making it the world’s richest mine on an average price per-carat basis. Export of diamonds reached $230 million in 2010-11. The official currency is the loti, but can be used interchangeably with the South African rand. Lesotho, Swaziland, Namibia, and South Africa also form a common currency and exchange control area is known as the Common Monetary Area (CMA). Lesotho’s ethno-linguistic structure consists almost entirely of the Basotho, a Bantu-speaking people: an estimated 99.7 per cent of the people identify themselves as Basotho. The pre-dominance of one ethnicity, helps the kingdom not to confront clan-based fierce fighting which many other African countries have been experiencing. Around 90 per cent of the people in Lesotho believe in Christianity. Members of other religions (Muslims, Hindus, Buddhists and Bahá’í) and members of traditional indigenous religions comprise the remaining 10 per cent of the population. In Lesotho, 85 per cent of those older than 14 years are literate. As such, Lesotho holds one of the highest literacy rates in Africa. The success comes due to its investments of over 12 per cent of country’s GDP in education. Unlike in most other countries, in Lesotho female literacy (94.5 per cent) exceeds male literacy. In the field of literacy, Bangladesh can learn from the experience of Lesotho. There should be collaboration between the apparel industries of Lesotho and Bangladesh. This will help both the countries’ economies to grow further.
The writer is CEO & Chief Consultant, Best Sourcing Business Advisory Services. mehdi.mahbub@bestsourcing.biz
