Hundreds of jobs in the offing

RETHABILE MOHONO

MASERU – The country is on the verge of an economic revival as the Lesotho National Development Corporation (LNDC) sets in motion an ambitious plan to systematically re-open factories across the country every month between August and the end of the year. 

These factories are expected to become significant engines of job creation as at least 1 800 jobs are expected to be created as each factory will provide jobs for hundreds of people. This bold initiative comes as a lifeline for a nation grappling with unemployment and economic stagnation, as the LNDC strives to breathe new life into Lesotho’s industrial sector.

LNDC’s decision comes after extensive efforts launched in 2022 to tackle persistent obstacles that had previously discouraged investors from establishing manufacturing operations in Lesotho.  This initiative not only focuses on reviving closed facilities but also highlights a renewed commitment to improve the local investment climate and promoting sustainable economic growth.

By addressing past barriers and reopening shuttered plants, the LNDC aims to create a more appealing environment for both local and international investors.

The Minister Trade Industry and Business Development, Mokhethi Shelile said: “We are thrilled to re-open the CGM factory and bring new jobs and growth to Maseru. This re-opening represents our commitment to ensure private sector-led job creation so workers can provide for their families. As government, we look forward to thriving business and economic growth for our country.

He further noted that his ministry and LNDC have been working tirelessly with CGM to ensure that its doors are re-opened.Last month, LNDC launched Ever Unison in Maputsoe, which began operations with 240 employees and is projected to expand to 1,500 by December.Today (Friday), LNDC, in co-operation with the Ministry of Trade Industry and Business Development, will open CGM in the Thetsane Industrial Area of Maseru, starting with 300 employees and anticipated to grow to 1,000 by December.

CGM Industries is a leading manufacturer of Denim apparel, with a long-standing reputation for excellence and innovation. Established in 2002, it is dedicated to delivering high-quality products while fostering a positive impact on the communities it serves.Earlier, Ever Unison Garments (EUG), a prominent textile factory in Maputsoe, resumed activities early in September.The re-opening of the factory, which is a significant player in Lesotho’s textile industry, marks a key milestone in a broader initiative to revitalise the country’s manufacturing sector.

The revival of EUG is the result of collaborative efforts between the Ministry of Trade, Industry, and Business Development, the Lesotho National Development Corporation (LNDC), and the factory’s management.

The factory’s re-opening is part of a larger strategy to bolster the textile, apparel, and footwear manufacturing industries which, when combined, represent Lesotho’s largest formal private sector employer. This sector provides employment to approximately 46,500 individuals, though this figure is down from a peak of 54,000 workers in early 2003.The closure of EUG in March 2023, which resulted in the laying off of 1,300 workers, was a consequence of a significant drop in orders, a situation exacerbated by global economic challenges such as the phasing out of the Multi-Fibre Arrangement (MFA) and the 2008 financial crisis.

The factory’s operational halt had a profound impact on the local economy and its workforce. The LNDC announced that the recommencement of operations at EUG will initially create 200 new jobs, with projections suggesting that the total number of jobs could rise to between 500 and 600 by the end of this year. The factory will continue to cater to international markets, including the US through the American Growth Opportunity Act (AGOA) and the EU export markets.

At its full capacity, EUG employed approximately 2,000 workers but faced severe challenges due to the COVID-19 pandemic and various geopolitical issues, which disrupted the global economy. The factory’s re-opening is viewed as a critical step towards recovering from these setbacks and rejuvenating the textile and garments industry in Lesotho.

“The re-opening of EUG signals the revival of manufacturing operations that were disrupted by decreased orders and adverse global conditions,” stated the LNDC. “This effort reflects the The Government of Lesotho and LNDC’s commitment to establishing Lesotho as a preferred investment and sourcing destination.”

In conjunction with EUG’s re-opening, the government’s #Re Bula Lifeme Campaign was also launched last Friday in Maputsoe, underscoring the broader efforts to stimulate economic growth and job creation.Lesotho’s textile, apparel, and footwear industries have been significant contributors to the nation’s economy, but employment numbers have fluctuated due to various global challenges. As of 2024, Statista Market Insights estimates that the revenue in Lesotho’s apparel market will reach approximately US$102.40 million (about M1.8 billion), with a projected annual growth rate of 2.29 percent.

Principal Economist Retšelisitsoe Mabote of the Central Bank of Lesotho (CBL) highlighted the critical role of the AGOA and the Southern African Customs Union (SACU) in expanding the labour force and enhancing tax revenue from Basotho exports.

However, Mabote also noted that anticipated revenue from income taxes did not materialise as expected and suggested that value-added tax (VAT) could have been a more substantial source of revenue due to its broader application to consumer transactions.

The LNDC, in partnership with the Ministry of Trade, Industry, and Business Development, is actively working to open additional factories starting this month. These efforts aim to generate more employment opportunities and drive continuous economic growth.“The Ministry of Trade, Industry, and Business Development, through its implementing agency, LNDC, remains steadfast in its mission to make a positive and sustainable impact on the economy, community, and environment,” LNDC said. “We are committed to creating intergenerational value and supporting the regeneration of jobs for Basotho.”