ABSTRACT: This paper presents a baseline assessment of micro, small, and medium enterprises (MSMEs) operating within Lesotho’s textile and apparel sector, with a focus on clustering potential and industrial readiness. The research employed structured interviews, textile and apparel product evaluations, and observational methods to evaluate production skills, equipment sufficiency, and entrepreneurial motivation. A total of 188 MSMEs were assessed, revealing strong foundational skills in garment construction and fabric economy, but significant gaps in textile science, specification sheet interpretation, and quality assurance systems. Business acumen—particularly in marketing, financial management, and sourcing—were found to be feeble. Despite these limitations, 86% of participants expressed high motivation to scale operations and engage in industrial production. The study proposes a four-tier clustering model based on skill and equipment levels, recommending targeted training, centralized services, and policy support to enhance competitiveness. The findings inform strategic interventions for export readiness, industrialization, and sectoral transformation. The report concludes with recommendations for digitized production training, care labelling education, MSME registration support, and the establishment of a standards regulation authority. This assessment lays the groundwork for inclusive, skills-based clustering and sustainable growth in Lesotho’s textile and apparel industry.

KEYWORDS– MSMEs, Textile and apparel sector, Skills assessment, Clustering strategy, Industrial readiness, Lesotho, Entrepreneurial development, Export competitiveness