This story by Pascalinah Kabi was produced with support from Bertha Foundation Impact Fund.
In the small southern African kingdom of Lesotho, leaders of the once-thriving textile industry say the sector is standing on the edge of a cliff. With the African Growth and Opportunity Act (AGOA) set to expire in September 2025 and U.S. buyers halting orders amid US tariff uncertainty, manufacturers warn of a looming collapse. And Lesotho independent analyst Lefu Thaela believes this economic downturn not only threatens livelihoods but also poses significant environmental risks, as a struggling industry may be less able to invest in ethical production practices, prioritise sustainability, or properly manage waste.
Ricky Chang, Administration Director of Lesotho’s largest jean exporter, Nien Hsing Group, says the company will be unable to pay the salaries of a third of its workforce starting August 2025 if US buyers continue to withhold orders due to concerns over the 50 percent reciprocal tariffs the US imposed on Lesotho in April 2025.
This is because US buyers have stopped placing orders after April 2025. The only available orders will sustain the firm up until the end of July 2025.
“Nien Hsing seems to be okay with the month of July, the factory can be busy up until July,” Chang said.
He added: “If the US insists that 50 percent of the tariff will be charged on the Lesotho goods exported to the US market, then that would be a doomsday.”
He warns, however, that the damage would not come from tariffs alone—the loss of AGOA’s preferential trade terms could deliver a double blow, wiping out thousands of jobs and destabilising one of Lesotho’s key export sectors.
He added: “But, I would say that AGOA is the bigger part to Lesotho textile because we rely on that to compete with other strong players. Without that, really, the chance is minimal.”
Private Sector Foundation Chief Executive Officer, Thabo Qhesi, warns that the renewal of AGOA is not guaranteed under the administration of US President Donald Trump, because “the US administration is unpredictable.”
“If AGOA is not renewed, we are going to see the closure of factories. We are going to see the multiplier effects in the entire value chain, which is not healthy for Lesotho.”
Qhesi said the loss of direct and indirect jobs—in public transport, retail, and residential property—would have chilling effects on Lesotho’s economy.
Fragile economy, fragile environment
In June 2025, the Central Bank of Lesotho indicated that the country’s economy shrank by 5.3 percent in the first part of 2025 and remains weak because the US reciprocal tariffs are hurting the clothing industry.
“While manufacturing and financial services showed some resilience, driven by textile exports and credit growth, overall momentum remains fragile. The outlook is clouded by rising tariffs affecting textiles…”
According to Trade and Industry Minister Mokhethi Shelile, at least eight manufacturers in Lesotho export garments to the U.S. market tax-free under AGOA, employing approximately 12,900 workers, most of them women.
These manufacturers include Nien Hsing Group, Lesotho Precious Garments, Maseru E-Textile, and Hippo Knitting. In June 2025, Maseru E-Textile placed 1,200 workers on three months of unpaid leave after orders from U.S. buyers dried up.
Makatleho Jane, 42, is one of the Maseru E-Textile workers placed on unpaid leave. Until early June, she took home a monthly salary of M3,017 ($171), which she used to pay her only child’s school fees, rent, buy food, and other basic needs.
“I have worked in the textile sector for 12 years because I did not go far in school. I dropped out in Form A after I married very young,” Jane explained.
Although her salary was never enough to cover her family’s monthly needs—often forcing her to borrow from loan sharks—Jane is heartbroken to find herself jobless because of decisions made by U.S. President Donald Trump, thousands of miles away from Lesotho.
“Being laid off has broken my heart. I don’t know where my next salary will come from. Every day, I wake up and go looking for work at another factory that we hear might open soon, but there is no guarantee I will be hired,” Jane said.
She said she would rather wake up at 4 a.m. for the nearly two-hour walk to report for her 7 a.m. shift than face the uncertainty of unemployment. It is a day she will not forget: supervisors, officials, and shop stewards gathered on the factory floor as management announced there were no more orders and workers would be sent on long, unpaid leave due to “Trump-related issues.”
“We were told the factories were in crisis because there were no orders coming in. Then they told us we were going home without pay,” Jane recalled.
In the face of these challenges, the Lesotho government is urging factories to diversify into European and South African markets to reduce dependence on the U.S. market. This diversification could also be an opportunity to encourage more environmentally conscious production practices, potentially through incentives for adopting greener technologies or certifications.
However, Lesotho’s independent political analyst, Lefu Thaela, warns that the looming crisis in the clothing industry could undo the progress factories have made in ethical production.
“We must remember that the primary aim of business is to make profits, especially in a country where the government is not very strict about environmental issues and implementation of environmental laws,” Thaela said.
He cautioned that if the U.S. administration imposes the 50 percent reciprocal tariffs after July 8, 2025, and AGOA is not renewed beyond September 30, 2025, environmental concerns will likely fall to the bottom of the industry’s priorities.
“They might decide to cut costs by reducing budgets for environmental protection initiatives because they are struggling to break even,” Thaela said.
Nien Hsing Group’s Administration Director, Ricky Chang, said the company employs around 4,500 people and produces approximately 480,000 pairs of jeans for the U.S. market each month. The remaining 120,000 pairs—about 20 percent of production—are sold in South Africa.
“Two or three years ago, we began producing 20 percent of our products for the South African market. But that is not enough,” Chang said.
Government accused of slacking, environmental concerns mounting
Chang believes the Lesotho government is not doing enough to secure a meeting with the US administration to ensure that the 50 percent tariffs imposed on Lesotho are lifted when the 90-day suspension ends on July 8.
“What I can say is that the Lesotho government is in a very difficult position, especially given the size of our economy compared to countries the US considers more important. We hope that by July 8, an agreement will be reached. But has the government done enough? I would say maybe not enough, because we need that answer as soon as possible,” Chang said.
He noted that the only meeting manufacturers have had with government representatives was in April, shortly after the tariffs were announced.
In a separate interview, Thabo Qhesi, the Private Sector Foundation Chief Executive Officer, echoed these concerns, saying the suspension period should have been used to repair relations with the US, as South Africa has done.
“But so far, I haven’t seen any vigorous effort by the Lesotho government to engage the US administration. This is my concern. Even those in charge of this sector are worried that there has been no visible attempt by the government to address this,” Qhesi said.
Beyond immediate economic concerns, Thaela warns that a long-term decline in the textile industry could result in unmanaged waste, which would lead to increased water pollution from shuttered or struggling factories and a rollback of previously implemented environmental safeguards.
“Obviously, we will see more disease outbreaks in communities around these factories because of pollution. In simple terms, reduced profits will lead factories to cut corners, causing pollution-related diseases and directly harming the environment and the people living nearby,” Thaela said.
Multiple attempts to obtain a comment from the Lesotho government did not yield results. On June 12, 2025, Trade and Industry Minister Mokhethi Shelile postponed a scheduled interview minutes before it was due to start, citing a meeting with Prime Minister Sam Matekane. He did not honour a rescheduled phone interview for 8 a.m. the following day. By July 1, the Ministry of Trade and Industry had not responded to questions sent on June 19. On June 30, the ministry’s Director of Trade, Malineo Seboholi, said she was still waiting for clearance from Minister Shelile to respond.
This story was produced with support from Bertha Foundation Impact Fund.
