Free Trade Agreements in Lesotho

Free Trade Agreements in Lesotho: An Overview

Lesotho, a small, landlocked country in Southern Africa, has been exploring and signing free trade agreements (FTAs) with various countries to boost its economic growth and development. FTAs are agreements between countries that eliminate or reduce tariffs, duties, and other trade barriers between them. In this article, we will explore the different FTAs that Lesotho has signed and their potential impact on the country`s economy.

Southern African Development Community (SADC) FTA

Lesotho is a member of the SADC, a regional economic community that aims to promote economic growth and development in the southern African region. As part of the SADC, Lesotho has signed the SADC FTA, which eliminates tariffs on goods traded between member states. The agreement was signed in 2008 and has been implemented gradually since then. The SADC FTA has the potential to boost Lesotho`s trade with other member states and increase exports of goods and services.

Economic Partnership Agreement (EPA) with the European Union (EU)

In 2016, Lesotho signed an EPA with the EU, which is a trade agreement between the EU and African, Caribbean, and Pacific (ACP) countries. The EPA is aimed at promoting trade and economic cooperation between the two regions. The agreement grants Lesotho duty-free and quota-free access to the EU market for all its exports, except arms and ammunition. In return, Lesotho will gradually reduce tariffs on imports from the EU.

The EPA is expected to have a positive impact on Lesotho`s economy, particularly in the textile and apparel sector, which is the country`s major export industry. The duty-free access to the EU market will increase the competitiveness of Lesotho`s textile exports, which will lead to increased investment and job creation in the sector.

African Continental Free Trade Agreement (AfCFTA)

The AfCFTA is a trade agreement between African countries aimed at creating a single market for goods and services across the continent. As a member of the African Union (AU), Lesotho signed the agreement in July 2019. The AfCFTA has the potential to boost intra-African trade, increase economic growth, and create jobs on the continent.

Lesotho`s participation in the AfCFTA will provide new opportunities for trade and investment, particularly in the agriculture and manufacturing sectors. The agreement will eliminate tariffs on goods traded between member states, which will make Lesotho`s exports more competitive in other African markets. However, the country will also face competition from other African countries in its domestic market.


FTAs are important instruments for promoting trade and economic growth. Lesotho`s participation in various FTAs has the potential to boost its economy and create jobs. However, the country also needs to address its infrastructure challenges, improve its regulatory environment, and invest in education and skills development to fully benefit from these agreements. As Lesotho continues to explore and sign new FTAs, it will need to carefully consider the potential benefits and challenges of these agreements.

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