Beyond Trade Preferences: Contingent Development and Structural Transformation Under Agoa in Lesotho
Abstract
The African Growth and Opportunity Act (AGOA), introduced by the United States in 2000, has been one of the most significant trade preference initiatives aimed at integrating sub-Saharan African economies into global markets. Lesotho is often cited as an important AGOA beneficiary because of the expansion of its textile and apparel industry, which created jobs, boosted exports, and connected the country to global production networks. However, the extent to which these gains have led to sustainable structural transformation remains contested. After expiring in September 2025, AGOA was reauthorized retroactively through December 31, 2026, renewing questions about the durability of development strategies built around preferential access. This article examines how AGOA has shaped economic transformation in Lesotho and whether the resulting gains have contributed to sustainable domestic productive capabilities. Drawing on a qualitative political economy analysis of academic literature, institutional reports, government documents, and policy sources, the article argues that AGOA generated significant developmental benefits but did not, by itself, produce the productive capabilities required for sustained structural transformation. To explain this outcome, the article advances the concept of contingent development, in which economic progress is enabled by externally structured opportunities while the durability of those gains remains dependent on external markets, investment decisions, and policy arrangements. The analysis of Lesotho's textile sector shows that participation in global value chains can generate employment and export growth without necessarily producing technological upgrading, strong domestic linkages, or economic resilience. The article contributes to debates on trade-led development by arguing that preferential market access should be understood as an opportunity for capability accumulation rather than as a substitute for industrial policy. Sustainable transformation requires stronger domestic productive capabilities, strategic industrial policies, regional integration, diversification, and inclusive approaches capable of converting externally generated opportunities into enduring economic capacities. Keywords: African Growth and Opportunity Act, AGOA, trade preferences, structural transformation, global value chains, productive capabilities, industrial policy, contingent development, Lesotho, political economy