Lesotho, AGOA and the importance of preparing to lose a gift horse
The initiated know it simply as AGOA, the 2000 US law that created a textile boom in poor Lesotho. But Lesotho illustrates the limits of the Africa Growth and Opportunity Act. Like everything else, AGOA or any other trade agreement that offers preferential access to US markets for certain goods, has limited utility. And a limited term, in this case, till 2015 (unless extended).
Lesotho’s application of AGOA is a lesson in how not to benefit from a preferential deal. It didn’t plan and build long-term, utilizing the time-sensitive advantages of an assured market.
Instead, Lesotho focused on AGOA as essential to its economic well-being.
As Sebabatso Manoeli argues (click here to read an abstract of his paper) the government of Lesotho “failed to localise a near three-decade experience of an export-oriented industry that should have catalysed broader development. The present period affords numerous opportunities for development beyond textiles, but Lesotho has not adequately capitalised on the trade preferences the international community has afforded. Indeed, the onus of development falls squarely on the government.
“The paper emphasizes that sustainability in the industry will require long-term strategic thinking,” he continues.
Right now, the mood in D.C. appears to be veering round to extending AGOA.
Good. But Lesotho and other sub-Saharan African countries need to ask themselves a couple of key questions: How long will the good times last? And how to prepare now for tomorrow?