Lesotho considers Starlink license to open to U.S. amid tariff war

While Lesotho breathes a sign of relief with the 90-day pause of the 50% sweeping tariffs – the highest in Africa – the country’s prime minister, Samuel Matekane, wants his government to remove barriers to US investment, including Elon Musk’s Starlink. 

At the Third Public-Private Dialogue National Conference on  April 9 in Maseru, Matekane framed Starlink’s license approval as part of broader efforts to attract U.S. investment. Critics, however, argue that the tariffs are unrelated to Starlink and that opposition to the company stems from its 100% foreign ownership, which raises concerns about national interests. They urged the government to address the issue transparently, rather than linking it to the tariff debate.

The Lesotho Communications Authority (LCA) confirmed it received Starlink’s application for a network services license in February. However, the bid has faced strong local opposition during public consultations. Stakeholders like Vodacom Lesotho and Section Two, a constitutional advocacy group, argue that Starlink should establish local shareholding before receiving approval. They noted existing telecom players, such as Econet Telecom Lesotho and Vodacom Lesotho, as examples of foreign investment coexisting with national interests through local ownership.

Approving Starlink’s license as a potential sweetener for the Trump tariffs could strain Lesotho’s diplomatic relations with South Africa, which rejected Starlink’s application over similar concerns about foreign ownership. This decision could also intensify competition for South Africa’s Vodacom, which holds an 80% stake in Vodacom Lesotho, with the remaining 20% owned by the Lesotho government.

While granting market access to U.S. companies like Starlink might improve diplomatic and trade relations, there is no guarantee it would lead to tariff reductions. Trade negotiations are influenced by broader economic and political factors, and goodwill alone may not suffice.

Lesotho’s Trade, Industry, and Business Development Minister, Mokhethi Shelile, expressed skepticism about the 90-day reprieve in an interview with South Africa’s public broadcaster, SABC. 

“I do not know what is going to happen after 90 days,” he said. “ It is said that it is done so that we can sit down and negotiate. I do not have a good experience in terms of trying to get meetings with the Trump administration.” 

Lesotho’s economy, with a GDP of $2 billion, is heavily dependent on exports. The textile industry is a major contributor, exporting to the U.S. for brands like Levi’s and Calvin Klein under the African Growth and Opportunity Act (AGOA). The U.S. receives $240 million worth of goods annually from Lesotho, compared to only $8 million in exports to Lesotho. 

A proposed 50% tariff on Lesotho’s exports threatens 12,000 jobs in the AGOA-supported factories. Despite the significance of the U.S. market, South Africa remains Lesotho’s primary trade partner, with $351 million in textile and diamond exports in 2023.