Ministry Of Commerce: A New Wave Of Unemployment In Lesotho Textile Industry

According to Lesotho times, a local media in Lesotho, on November 3, global international, a textile mill of Nianxing group, has begun to lay off more than 3000 employees, casting a cloud over the local economy and thousands of families.

Global International said the U.S. market is currently the only buyer of its products and workers have been laid off due to a lack of orders. The plant will be shut down for two months and will resume operation on January 4, 2023. Formosa, another textile mill owned by Nianxing group, is also in poor condition, with only two weeks of operation in the past month due to reduced orders.

According to the report of the United Nations Development Programme (UNDP), the manufacturing industry in Lesotho contributes as much as 14.2% to the local economy, and the manufacturing workers account for 16.2% of the total employed population. Among them, the textile sector is the second largest source of employment after the government. Since the outbreak, Nianxing group has cut more than 7000 jobs. However, industry insiders say the real reason behind the massive layoffs is that the company is involved in grey transactions, including tax arrears. Now that companies are mired in cash flow, layoffs may be a ploy to get the government to reduce debt. The head of Nianxing group firmly denied this and said that the only reason for the layoff was the shrinkage of the US market.

Analysts point out that mass layoffs may exacerbate poverty and create a new round of crime. More importantly, since most textile mills are female workers, the layoffs will reverse the significant gains Lesotho has made in terms of women's empowerment.

Therefore, the new mattekane government needs to take prompt action to make good use of the African opportunity and Growth Act (AGOA) of the United States, and strive to tap the special products exported to the United States except for textiles and clothing. For example, the government of Liberia can learn from the practice of South Africa, which exports various products from agricultural products to automobiles to the United States under AGOA every year, which is worth billions of malloti. In addition, the government should actively seek new export markets instead of relying solely on the United States and South Africa.