The sub-national economic and spatial development impacts of AGOA in Lesotho: An exploratory study

Abstract

This exploratory study investigates the sub-national economic and spatial development outcomes of the African Growth and Opportunity Act, 2000 (AGOA) in Lesotho. The findings reveal that the settlements where the ‘AGOA-factories’ are located have experienced not only positive, but also significant negative economic and spatial impacts. While AGOA resulted in the creation of tens of thousands of job opportunities for unskilled and semi-skilled Basotho youth, it did not provide them with portable skills for use once they had left the AGOA factory floor. Neither did AGOA motivate the youth or local entrepreneurs to tap into the manufacturing sector. In terms of spatial development, the AGOA factories had led to infrastructure investment, essentially to serve the factories, which, in turn, also benefited the surrounding territories. In many of the settlements, rental units – unplanned and without planning permission – have been constructed in response to the huge demand for affordable housing by the thousands of migrant workers. While fulfilling a definite need, these units have simultaneously led to the development of monotonous ‘sleeper towns’, over-burdening of already strained municipal services, haphazard land development, and a feeling of ‘anything goes’. The research findings suggest that, while ‘trade and development boosting tools’ such as AGOA may be useful in providing term-based job opportunities for an unskilled workforce, they will most likely not have as significant a positive impact on the local economy, the creation of an indigenous industrial class, or the building of sustainable human settlements.