Editor's note: Aid for Trade aims to help developing countries, particularly least-developed countries, develop the trade-related skills and infrastructure that is needed to implement and benefit from WTO agreements and to expand their trade. The annual Aid for Trade Global Review will be held in Geneva, Switzerland from July 18 to 19, 2011. This story is the last of two the World Bank will be presenting online.
Training centers supported by the World Bank are teaching workers in Lesotho new skills. (Photo Courtesy of The World Bank.)
Washington DC, July 19, 2011 -- A World Bank program to establish workplace training centers in Lesotho has increased the number of skilled workers and helped strengthen the country’s export-oriented industry base.
The program, supported by the Private Sector Competitiveness and Economic Diversification Project, has improved the workforce skill level in the Lesotho economy. In an attempt to boost private-sector participation in Lesotho, part of the Bank project includes a $1.06 million skills development component that involved setting up two training centers in Lesotho’s capital, Maseru, and in the northeastern city of Maputsoe.
Lesotho, a small, mountainous country tucked inside South Africa with a population of 1.9 million1, faces many obstacles in its garment and textile industry. By teaching workers new skills, the centers sought to increase competitiveness through higher productivity, meet buyers’ demands to add more value to “commodity”-type products and support new investors’ efforts to differentiate products.
The program has provided previously unskilled workers the opportunity to work and move up in the industry and as having spread the benefits of foreign investment in the industry more widely in Lesotho. World Bank economists say it is helping slow Lesotho’s shrinking market position and augmented Lesotho’s textile sector’s penetration in South African and European Union markets.
“Deepening and widening the skills base of the workforce is central in increasing overall competitiveness, shifting towards higher quality and value added products and improving compliance with labor and social standards,” the World Bank said in the program document.
The country’s textile industry blossomed in recent years, with exports to the United States and other markets increasing by almost five-fold in six years, reaching $456 million in 2004. Following a drop caused by factors including the expiration of the Multifiber Arrangement, the industry started to pick up again in terms of companies and jobs in 2005 and 2006 – although it has suffered since because of world economic conditions.
In Maseru, there is a concentration of garment factories owned and managed by Taiwanese and other international firms. The output at many of these centers is geared towards the U.S. market for companies such as Levi Strauss, Gap and Walmart as these firms took advantage of preferential access to the US market through AGOA. AGOA is a US act which offers tangible incentives for African countries to continue their efforts to open their economies and build free markets. Maputsoe has a smaller number of garment factories owned and managed by South Africans, as well as some light-manufacturing factories whose skills needs are similar to those of the garment factories.
At the local level, the centers benefited hundreds of Lesotho residents, particularly women. In the two years since its inception, the center at Maseru has trained 625 workers, of whom 491 were women; Maputsoe center has trained 401 workers, including 225 women. Women are also being trained into supervisory roles. At Maputsoe, 40 of the 58 supervisors trained were women.
The training of female supervisors aligns with the World Bank’s goal to increase the number of supervisors, technicians and middle managers from the country. Training ranges from pre-employment training in such areas as basic sewing machine operation to more advanced areas such as quality control, merchandising and export documentation and marketing.
The proposed action plan for the training centers set them up as public-private partnerships. The partnership would introduce private financing and possibly more advanced training programs, which would allow diversification into other industries.
Three firms, from Lesotho, South Africa and Malaysia, have expressed interest in participating in the partnership, according to the Bank specialist. These training providers would need to submit detailed technical and financial proposals clearly specifying what they would bring to the table. While the government will provide infrastructure, the private providers would provide inputs into training materials and reorganize the centers to improve the program.
Despite the recent growth in the garment and textile industry in Lesotho, the world is still recovering from a financial crisis. The global economic downturn has deterred some private investments and the number of textile factories has been dropping; some manufacturer can no longer pay for training. Moreover, there have been other problems in such areas as matching the training offered to the industry’s needs.
The World Bank also found that one constraint on development of Lesotho’s private sector was low labor productivity compared to Africa’s most productive countries and key textile and garment competitors China and India. Nevertheless, the bank specialist praised the program’s existing accomplishments in providing a way for otherwise unqualified people – unskilled trainees with little education – to work in the industry.