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CBS Support February 14, 2020

AGOA Response Strategy Launch

REMARKS BY THE HONOURABLE

MINISTER OF TRADE AND INDUSTRY AT THE

OFFICIAL LAUNCH OF AGOA RESPONSE STRATEGY FOR LESOTHO

VENUE: AVANI LESOTHO
DATE: 27TH NOVEMBER 2019

Thank you master of ceremony;
Through you let me pay my respects to;

• His Majesty, King Letsie III,
• The Honourable the Prime Minister,
• The President of the Senate,
• The Speaker of the National Assembly,
• The Chief Justice,
• Honourable Ministers,
• US Ambassador to Lesotho, Her Excellency Mrs. Rebecca Gonzales
• USAID REGO Representatives
• Senior Government Officials
• Distinguished Guests,
• Ladies and Gentlemen.

A very warm welcome to you all on the official launch of Africa Growth and Opportunity Act (AGOA) Response Strategy for Lesotho. Allow me first of all to express my heartfelt thanks to the team from United States Agency for International Development (USAID) Southern Africa Trade and Investment Hub (The Hub), the team from Ministry of Trade and Industry because without those constructive collaborations today’s event would not have been possible. Let me also extend my sincere appreciation to the US Embassy for their enthusiastic involvement and commitment in devising today’s event in resolutely empirical manner.

Since its inception on 18th of May 2000, AGOA has been centrepiece of trade relations between the US and sub Saharan Africa. AGOA has been amended six times since its enactment, the AGOA Extension and Enhancement Act of 2015 was the longest extension in the history of AGOA and there is no guarantee that AGOA will be renewed after 30th September 2025.

It was therefore essential for Ministry of Trade and Industry with technical assistance from the USAID Southern Africa Trade and Investment Hub to review 2015 AGOA Response Strategy for Lesotho. The strategy provides a comprehensive plan to increase exports from Lesotho to the US under non-reciprocal unilateral trade preference program and attract more US investment to Lesotho. The strategy also focuses on diversification to increase exports of other products to the US under AGOA and avoid relying on export of textiles and apparel products.

Ladies and Gentlemen,

The textile and apparel sector has in fact been one of the most visibly success stories in terms of AGOA’s impact in Lesotho; the textiles and apparel sector, which is second highest employer in the country employs more than 40 000 employees who are mostly women. However, as to take full advantage of AGOA we need to do away with the misinterpretation that AGOA is basically concerned with textiles and apparel only. There are in fact more than 6 400 product lines eligible under this agreement. It is a fact that besides textiles and apparel, Lesotho failed to take full advantage of the preference because of the following challenges;

• Declining value and volume of exports
• Lack of diversification – concentration on one sector
• Absence of standard testing facility
• Productive capacity
• Non-Tariff Barriers
• Lack or absence of investment from the US
• Lack of awareness of the AGOA programme

However, there are initiatives which are being undertaken to address some of these challenges.
The Government of Lesotho is implementing Economic Diversification Support Project through support of the African Development Bank (AfDB) with the objective to create jobs and promote inclusive growth through enhanced economic diversification and strengthen enterprise development. The project has a specific focus on private sector development through improved partnerships, entrepreneurship and skills development, and investment promotion in selected sectors critical for economic growth.

The Ministry of Trade and Industry through the Economic Diversification Support Project (EDSP) assessed the artisanal (arts and crafts), tourism, agriculture, agro processing and service sectors in Lesotho in order to have a clear idea to further develop export consortia and/or creative industries programmes which will be implemented to enhance MSMEs’ capacities and capabilities for export development and competitiveness.

The Lesotho National Development Corporation in collaboration with the Ministry of Trade and Industry with the support of the World Bank through the Private Sector Competitiveness and Economic Diversification Project are in the process of developing National Linkages Programme.

The Business linkages programme will therefore be used as an instrument for private sector development aimed towards achieving enhanced competitiveness, access to finance, access to both local and international markets, technology management, skills and knowledge transfer, and general capacity building. The program will also be used to address failures where the markets fall short of facilitating sustainable, shared and equitable growth.

Furthermore, the National Response Strategy is an important implementation tool which put in place specific and targeted action plans which will assist policy makers and the private sector in taking advantage of the opportunities offered by the AGOA initiative. The strategy resonates with aspirations of Lesotho Vision 2020 and National Strategic Development Plan (NSDP II) whose aim is to create sustainable jobs and alleviate poverty. The Strategy has identified priority sectors which are to export to the US under the programme. These include;

• Textiles and apparel
• Footwear products
• Natural/organic products
• Bottled water
• Canned foods
• Handicrafts and
• Leather products

On this note, I therefore want to emphasize that it is in our best interest to ensure that the AGOA initiative realises the intended objectives of deepening and expanding trade and investment between Lesotho and the US. We must also take effective measures to address the challenges that impede our ability to exploit market access offered by AGOA. Our focus for the remaining six years of AGOA should be on implementation of our national response strategy and build capacities to ensure full utilization of the programme.

As I conclude, I would like to register my heartfelt gratitude to our development partner, USAID Southern Africa Trade and Investment Hub for its tremendous efforts and vision in making this phenomenal occasion a success. I further wish to make a call to all stakeholders to work hand in glove to making this noble project a definite success for Lesotho. I thank all Government Ministries, Agencies and Private Sector who were involved in organising and participating in this event.

I thank you.

KHOTSO!!! PULA!!! NALA!!!

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