MBABANE:The tariffs imposed by newly inaugurated United States(US) President Donald Trump on eSwatini and other African Nations signals the end of the trade benefits under AGOA, Aljazeera reported this week quoting trade and economic experts.
AGOA stands for the African Growth and Opportunity Act, a United States trade law that provides eligible sub-Saharan African countries with duty-free access to the US market for certain products, aiming to foster economic growth and improve United States-Africa relations.
But US President Donald Trump, shortly after his inauguration, imposed ten per-cent(10%) tariffs on goods imported from eSwatini while 50% was imposed on Lesotho, worsening ongoing efforts to develop the economy of the impoverished landlocked country completely surrounded by South Africa.
Lesotho relies heavily on exports for its modest $2billion Gross Domestic Products(GDP),in 2024, the country’s economy saw modest growth, driven by construction activities, particularly the Lesotho Highlands Water Project-Phase two(II) with GDP growth reaching 2.2% in the fiscal year ending March 2024.
But export-oriented sectors like textiles and mining underperformed due to weaker foreign demand, Lesotho is also trading with the neighboring South Africa, a country that is in the midst of trade and diplomatic tension with the United States with President Cyril Ramaphosa expressing willingness to engage through diplomatic channels.
On the other hand, eSwatini also expressed willingness to engage with the US to promote and strengthen trade relations and this, was disclosed by Mancoba Khumalo, the Minister of Commerce, Industry and Trade.
“This decision is expected to negatively impact our exporters.In response, we are conducting extensive consultations with all relevant stakeholders to gather the necessary details that will help determine which products will be affected. The Ministry will formally inform our traders regarding this matter. Once we receive the official communication detailing the list of affected products, we will engage further with the impacted traders to discuss the implications and necessary actions. The Eswatini Government remains committed to maintaining strong international trade relations with the United States of America and fostering a business environment that supports economic resilience and growth,” reads the statement in part, released by the Commerce Minister on Thursday afternoon.
The high levies on eSwatini, Lesotho and other African States signalled the end of the AGOA) that was supposed to help African economies develop through preferential access to US markets.
Thabo Qhesi, a Maseru-Lesotho based independent economic analyst told Aljazeera this week that, the US tariff on Lesotho will destroy the country’s textile and apparel industry.
It has been reported that in Lesotho, the textile sector is one of the largest private sector employer, eSwatini also relies on the United States markets for some of the country’s textile products.
“If the closure of factories were to happen, the industry is going to die and there will be multiplier effects. So Lesotho will be dead, so to say,” he said.
King Mswati(WAMI-WAMI).