Maseru – Lesotho’s textile industry is bracing for another blow after Hippo Knitting (Pty) Ltd announced plans to retrench 420 workers early next year, citing ongoing uncertainty over the renewal of the African Growth and Opportunity Act (AGOA).
In a letter dated November 7 and addressed to the Department of Labour, trade unions, and the Ministry of Trade, Managing Director Grace Lin said the company had been forced to make “a further retrenchment” effective January 25, 2026, as U.S. market access under AGOA remains unconfirmed.
The U.S. legislation, which provides duty-free access for eligible African countries, has long underpinned Lesotho’s garment exports. But with Washington yet to announce a renewal and customers pulling back orders, production at Hippo Knitting has dropped to levels “too low to sustain operations.”
The company warned that the absence of AGOA renewal has rendered its products uncompetitive in the U.S. market, triggering “a severe and sustained decline in orders.” Despite efforts to cut costs and find new markets since June 2025, Hippo Knitting said it has been unable to generate enough volume to keep its factory fully operational.
The firm said it would start formal planning to wind down operations by July 2026 if conditions do not improve. “We will conduct this process in strict compliance with all legal consultation and labour requirements,” the letter stated.
Lin made an urgent appeal for government intervention, calling for “freezing rental obligations and providing financial support to help sustain operations.” She warned that the remaining jobs now depend on “swift and collective action.”
The textile and apparel sector is one of Lesotho’s largest private employers, with tens of thousands of jobs linked to AGOA exports to the United States. If Hippo Knitting proceeds with its retrenchments, it would mark another significant setback for a sector already hit by global uncertainty and weak demand.
Consultations with labour representatives and government officials are expected in the coming weeks.
