Magazine article New African

Economy on the Up: Despite Severe Negative Weather Conditions That Have Led to Food Shortages, Lesotho's Economy Performed Well in the 2002/03 Fiscal Year. Janet Jere Reports

Magazine article New African

Economy on the Up: Despite Severe Negative Weather Conditions That Have Led to Food Shortages, Lesotho's Economy Performed Well in the 2002/03 Fiscal Year. Janet Jere Reports

Article excerpt

According to a recent International Monetary Fund (IMF) review, quoted by the UN's Integrated Regional Information Network (IRIN), Lesotho's economy grew by almost 4% last year. Much of the improvement was attributed to strong textile exports to the United States under the African Growth and Opportunity Act (AGOA).

Lesotho, which has been a member of IMF since 1968, received preferential access to US markers under AGOA in 2000, including an exemption from AGOA rules of origin until 2004, attracting investment from Asian-owned textile factories keen to export to the United States.

The rules of origin state that fabric used by the textile factory must originate from the US or a qualifying African country. At the moment the bulk is from Asian-states.

Since it joined the programme, Lesotho has experienced a considerable boom in the garment sector, with increased employment opportunities.

The IMF, however, cautions that if the exemption from the AGOA rules of origin was not extended beyond 2004, Lesotho's current economic growth would not be sustainable. The country could also face daunting medium-term problems because of the fall in agricultural production in recent years. Due to poor weather conditions exacerbated by gradual soil degradation, Lesotho, the small but culturally-rich landlocked country of stunning natural beauty, is facing yet another year of severe food shortages, needing at least 57,000 metric tonnes of food to feed between 600,000 and 700,000 people until the end of the 2004-05 harvest time. …

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