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Good practice Imported

Lesotho National Development Corporation — A Trade-Preference-Dependent Garment FDI Anchor

Lesotho · Maseru · See the Lesotho profile · See the Maseru profile

Evidence: Observational / pre–post Top 96% 38/100 · Ask Evidence Copilot about this practice

LNDC's push for export-garment FDI built a sector employing ~34,000 (mostly women) and generating $300m in 2024 exports, but jobs fell from 51,325 (2020) to 34,151 (2024), and a 2025 AGOA lapse triggered a state of disaster.

34,000
Garment-sector workers (2024) (2024)
~75%
Share of garment-sector jobs held by women (2024)
USD 300 million
Garment exports (2024) (2024)
>50%
Share of manufactured-goods exports (2024) (2024)
~35%
Share of total exports (2024) (2024)
51,325
AGOA-assisted manufacturing employment (2020) (2020)
34,151
AGOA-assisted manufacturing employment (2024) (2024)
~-33%
Employment decline 2020-2024 (2020-2024)
Lesotho National Development Corporation — A Trade-Preference-Dependent Garment FDI Anchor

Details

Maturity
Established
Promoter
Lesotho National Development Corporation (LNDC)
Period
2000-present
Keywords
investment promotion, textile & apparel manufacturing, export-oriented FDI, AGOA trade preference

Context

Since 1967, Lesotho's national investment-promotion agency, LNDC, has courted export-oriented garment manufacturers, mainly Asian-owned factories serving the US market, anchored from 2000 by duty-free access under the African Growth and Opportunity Act (AGOA).

Objectives

LNDC's strategy has been to use AGOA trade preferences to attract large-scale foreign direct investment into export-garment manufacturing as an engine of employment and export growth.

Activities

LNDC promoted and facilitated foreign investment in garment factories serving the US market, building a sector that by 2024 employed roughly 34,000 workers, about three-quarters of them women.

Results

By 2024, garment exports reached USD 300 million, more than half of Lesotho's manufactured-goods exports and around 35% of total exports; however, employment in AGOA-assisted manufacturing fell from 51,325 workers in 2020 to 34,151 in 2024, a decline of roughly a third, and the September 2025 AGOA lapse triggered order cancellations, production slowdowns, factory closures and a national state of disaster before the US extended AGOA through 31 December 2026.

Conclusions

The LNDC model shows that a single-sector, trade-preference-anchored strategy can attract large-scale FDI and female employment, but remains acutely exposed to external trade-policy shocks outside the country's control.

Implementation
Indicative cost
Medium (€50k–€500k) — Running a national investment-promotion agency and associated incentives over decades is consistent with a medium public cost relative to the scale of FDI attracted.
Time to results
Long (> 3 years) — Strategy pursued continuously since 1967 (AGOA-anchored since 2000), spanning over two decades of AGOA-era operation.
Staffing & skills
LNDC investment-promotion officers, Factory-level management at Asian-owned garment manufacturers, Government trade-policy negotiators managing AGOA eligibility

Conditions for success

  • Continued access to preferential trade terms (AGOA duty-free access to the US market)
  • Active investment-promotion outreach to foreign garment manufacturers
  • Availability of a large, low-cost labour force, predominantly women

Common failure modes

  • Dependence on a single external trade-preference regime (AGOA) exposes the sector to abrupt policy shocks, as shown by the September 2025 lapse
  • Concentration in one sector and one export market (the US) leaves employment vulnerable to order cancellations and tariff changes
  • Employment already fell by roughly a third between 2020 and 2024 even before the 2025 disruption

Where it fits

Governance type
national investment-promotion agency
Scale
national, single-sector concentration
Income level
low-income, landlocked economy dependent on trade preferences

Commonly funded by

National / regional programmes

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Data sources

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Attachments

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