Development in World textiles Markets: Implications for Fund Surveillance, a memo prepared by PDR, August 6, 2003; IMF, Washington, DC.
U.S.-Africa Trade Report (various issues), Africa Coalition for Trade Inc., Washington, DC.
Mattoo, A., D. Roy and A. Subramanian, 2003: The African Growth and Opportunities Act and It’s Rules of Origin: Generosity Undermined?, “IMF Working Paper 02/158 (Washington, International Monetary Fund)
Prepared by Shahabuddin M. Hossain.
The available statistics on exports (value and volume) are incomplete and often inconsistent with the import data of the United States, the main destination of exports. They do, however, reveal the extraordinary growth in exports during the last decade. The reported statistics on textiles sector value added also include leather and footwear. The latter is a very small sub sector.
Among others, Mattoo, A., D. Roy and A Subramanian (2002) indicate that the restrictive rules of origin imposed by AGOA significantly reduces the potential medium-term benefits to African countries relating to the textiles sector.
Lesotho’s track record is, however, not perfect. In 1999, new trading enterprise regulations introduced reserve licenses that prohibited FDI in 17 business activities, mainly in the retail business and service sectors. Existing business activities were given 12 months to exit, and a number of businesses were closed as a result.
Lesotho is considering reintroducing the Duty Credit Certificate (DCC) scheme, which was withdrawn owing to misuse, to encourage regional backward linkages. The DCC scheme would grant exporters an import duty credit based on a percentage of their exports. As a result, fabrics from South Africa may become price competitive with East Asian products.