Economy, Policy, Free Trade, and Skills in a Small Kingdom…

Tucked away in the rugged highlands of Southern Africa lies the small but nota­ble nation of Lesotho. This landlocked kingdom is often overlooked due to its larger and more influential neighbour, South Africa. Despite its modest political profile and breath taking scenic mountains, Lesotho sur­prises many with a remarkable economic as­set: the production of denim jeans. Each year, millions of pairs of jeans bearing prominent American and European brand labels are not manufactured in fashion capitals like New York or Milan, but rather in humble garment facto­ries nestled in the key towns of Maseru and Ma­putsoe. These jeans are more than just a fashion statement; they embody a complex interplay of economy, government policies, free trade agree­ments, and local skills development. Together, these factors weave a narrative about how a small nation can harness its resources and strategic partnerships to forge a path toward economic resilience and growth, illustrating the country’s unique journey from obscurity to significance in the global textile industry.

Lesotho’s transformation into a promi­nent denim manufacturing hub serves as a compelling example of how small economies can effectively integrate into the global value chain. The country’s garment industry stands as the largest formal employment sector, offer­ing livelihoods to over 40,000 individuals, the majority of whom are women. These textile factories produce apparel for major interna­tional brands such as Levi’s, Gap, and Wran­gler, highlighting their pivotal role in global fashion markets. As a result, approximately 6% of Lesotho’s total workforce is engaged in the garment industry, which predominantly relies on exports to sustain its growth and eco­nomic contribution.

Let’s be clear: the story of Lesotho’s jeans did not happen by chance or mere coinci­dence. Instead, it was a carefully orchestrated outcome resulting from strategic planning and the right capabilities aligning seamless­ly with available opportunities. This success was driven by deliberate policy decisions made by policymakers and the implementation of specific international trade agreements, most notably the African Growth and Opportunity Act (AGOA). AGOA is a significant legislation that offers eligible African countries duty-free access to the U.S. market, substantially boost­ing their export industries. Thanks to AGOA, Lesotho gained a comparative advantage in the global apparel trade, encouraging foreign investors, particularly those from Taiwan and China, to establish garment manufacturing fa­cilities to serve the lucrative American market.

I urge you to reflect on the actions your government, investors, and other business leaders have taken or could take to seize simi­lar opportunities, such as those offered by the African Growth and Opportunity Act, to pro­mote economic growth and development in your African country. Offshore, there are some lessons to learn from the story of Lesotho’s jeans industry. Behind every pair of jeans lies a series of strategic policy manoeuvres. The government of Lesotho provided incentives to foreign investors, established industrial zones, and collaborated with international organi­sations to improve compliance with labour and environmental standards. These policies demonstrated seriousness and helped build private sector confidence.

Learning does not merely mean copying and pasting; the story of Lesotho’s jeans also reminds us that Lesotho’s trade policies reveal a paradox many developing economies face: reliance on external frameworks. The coun­try’s textile boom is highly susceptible to shifts in U.S. policy. When AGOA is threatened or delayed, the entire industry experiences the repercussions. This highlights the importance of policy diversification and regional integra­tion to reduce dependence on distant markets.

In its ideal form, free trade offers a level playing field for countries of all sizes. For Lesotho, a small landlocked nation, it opens access to global markets, fostering economic growth and development. However, there are risks, such as vulnerability to currency fluc­tuations, global demand shifts, external policy changes, and increased competition, especially from regions like Asia.

Trade agreements often set rules of origin that can be complex and restrictive, posing challenges for exporters. Lesotho, for example, exports jeans—a key product in its manufac­turing sector—but relies on imported fabric and machinery. As a result, much of the value is added outside Lesotho, making it more of a middleman in the global supply chain than an independent producer. It functions like a facto­ry with limited control over the entire process.

In this context, free trade alone does not au­tomatically lead to economic empowerment for Lesotho. Its ability to truly benefit from open markets largely depends on the skills, infrastructure, and capital available within the country. Without these vital elements, trade openness can simply result in increased com­petition and vulnerability, rather than sus­tained growth and development. Therefore, while free trade can create opportunities, it must be supported by policies and investments that fully develop local capacity and resilience to reach its potential benefits.

One of Lesotho’s challenges—and oppor­tunities—lies in skills development. Most gar­ment workers are trained on the job for repet­itive tasks, with limited exposure to design, engineering, or supply chain management. To move up the value chain, those offshore willing to learn from the Lesotho Jeans story must invest in technical and vocational training, es­pecially in textile technology, fashion design, logistics, and quality control. More skills lead to greater value creation. A worker who under­stands fabric engineering or brand logistics contributes more than a seamstress working by rote. Skills transform a country from a low-wage site into a creative and strategic partner in global commerce.

The jeans of Lesotho remind us that global­isation is not just about access but also about preparedness. Trade agreements like AGOA are important, but without domestic policies that promote industrialisation, skills training, and infrastructure, they remain superficial. Lesotho has made significant progress, but its experience also prompts urgent questions: How can small countries build resilience when faced with ex­ternal policy changes? Can Africa shift from exporting raw labour to controlling more of the production value chain? What role should skills development play in long-term economic policy?

In every waistband sewn and every rivet fastened, Lesotho’s jeans carry the silent im­print of policy choices, trade agreements, and human capability. They represent not just what the country produces but what it has the potential to become. In a continent where many nations are still seeking their economic identity, Lesotho offers a clear example: with the right policies, access to global markets, and investment in skills, even the smallest player can wear the fabric of global significance.

Join me, @anthonykila, if you can, to continue these conversations.

Anthony Kila is a Jean Monnet Professor of Strategy and Development at the Commonwealth Institute for Advanced and Professional Studies