An Industry Fraying At the Seams

Greg Mills
Business Day (Johannesburg)
07/10/2007

Johannesburg

THERE is scarcely a blade of grass in sight over Lesotho now, with only the faintest flecks of green visible from the aircraft coming in to King Moshoeshoe I International Airport. The effects of the worst drought in 30 years are plain to see. Economic hardship raises the risk of political upheaval . But what might the mountain kingdom make and sell to offer employment to its 2-million citizens? Two decades ago, the export-driven growth route successfully pursued throughout east Asia was the obvious one to emulate. But today, does not China's economic rise close off this development avenue for African countries?

Lesotho's progress -- and challenges -- under the US's African Growth and Opportunity Act (Agoa) offers a reality check. Now in its fourth iteration, Agoa came into being in May 2000. Under Agoa, African countries deemed to be "reforming" have the most liberal access to the US market available to any country or region with which Washington does not have a free trade agreement. Agoa lists more than 6400 items under the generalised system of preferences, which countries can export duty-free to the US. At the time of signing, it was hoped the act could create as many as 100000 new jobs in the textile sector in southern Africa alone...  

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