Lesotho faces economic blow from Donald Trump’s aid cuts and trade pact uncertainty
Lesotho, a small landlocked kingdom in southern Africa, is bracing for a major economic crisis following aid cuts imposed by Donald Trump’s administration. The country now faces the possibility of losing up to 40,000 jobs if the US president cancels the African Growth and Opportunity Act (AGOA), which grants duty-free access to the American market.
Lesotho’s Heavy Reliance on Exports and Foreign Aid
Entirely surrounded by South Africa, Lesotho’s economy is heavily dependent on exports and foreign aid. The country’s $2 billion GDP could suffer a significant setback if the AGOA trade pact is terminated.
Speaking ahead of his trip to Europe, King Letsie III warned about the economic consequences of the potential trade deal cancellation.
“If AGOA is terminated, it will have an immediate impact on the economy because it could mean the loss of jobs for 30,000 to 40,000 people,” said the king during an interview at his palace in Matsieng, about 45 km from the capital Maseru.
The monarch acknowledged the uncertainty surrounding the renewal of AGOA, expressing concern over Trump’s trade policies, which have already led to multiple economic disruptions worldwide.
“It’s a worrying thing, but if it happens, we’ll have to deal with it,” he said.
Uncertain Future for AGOA
AGOA was enacted in 2000 to provide duty-free access for selected products from around 30 sub-Saharan African countries. The trade agreement is set for renewal in September, but Donald Trump’s return to the White House has cast doubt over its continuation.
Since his reelection, Trump has been making sweeping changes to US trade policies, leaving countries like Lesotho uncertain about their economic future.
Impact on Lesotho’s Healthcare System
Apart from the economic concerns, Lesotho is also struggling with one of the highest HIV rates in the world. The country is still reeling from Trump’s decision to freeze US funding for its healthcare sector.
The United States has contributed more than $630 million since 2006 to support anti-HIV/AIDS efforts in Lesotho. However, with funding cuts now in place, many fear the impact it could have on life-saving programs.
Trump’s Controversial Remarks on Lesotho
Adding fuel to the fire, Trump recently defended the aid cuts, making a mocking remark about Lesotho by saying it was a country “nobody has ever heard of.”
King Letsie III admitted he was disappointed by the comment.
“I was a little bit upset,” said the monarch, who, despite holding a symbolic position with no formal power, plays an important diplomatic role.
However, he remained hopeful, stating that the publicity from Trump’s mockery could be used to highlight Lesotho’s beauty and potential for tourism and investment.
“We have enjoyed very warm relations with the US and the people,” he added, emphasizing the long-standing partnership between the two nations.
King Letsie III’s Upcoming European Visit
In response to the economic uncertainty, King Letsie III is set to travel to France on Wednesday, where he is expected to meet President Emmanuel Macron on Thursday.
The visit is part of Lesotho’s diplomatic efforts to strengthen ties with European nations, particularly in areas such as trade, investment, and health.
To conclude his European tour, the king will also participate in a nutrition summit over the weekend, aiming to address food security and public health challenges affecting the nation.
With AGOA’s future hanging in the balance and US funding cuts already taking effect, Lesotho is now forced to explore new international partnerships to secure its economic and healthcare stability.
