Over $900m in World Bank projects thrive
Money from Lesotho a business background
NEO SENOKO
MASERU – The US$52.5 million (M965 209 875) Competitiveness and Financial Economic Programme (CAFI) that was introduced by the government of Lesotho in April this year is making significant strides towards its objectives, two months after its establishment. The total budget for the project is US$52.5 million (M965 209 875 00), comprising US$45 million (M827 100 900 00) as a loan from the World Bank and US$7.5 million (M137 786 025) as a grant from the Global Risk Financing Facility (GRIF) to strengthen the resilience of the Lesotho private sector to climatic shocks.
The country has also received additional financing from the India, Brazil, and South Africa Fund for poverty and hunger alleviation to support the horticulture component of the project. Led by the Ministry of Trade, Industry, Business Development, and Tourism, the project seeks to enhance access to business support services and financial products, particularly for small businesses and entrepreneurs, with a special emphasis on women and youth-led ventures.
The project strives to capture and strengthen the local private sector, a vital component in generating employment opportunities and ensuring sustainable economic growth. Yesterday, one of the critical components of the project, the Lesotho Entrepreneurship Hub and Seed Financing Facility, was launched with the intention, among others, to provide vital support for young Basotho entrepreneurs, and women, who possess immense potential and have embarked on an inspiring journey to shape a brighter future not only for themselves but also for the broader population.
“This entrepreneurship hub and seed financing facility perfectly aligns with our national trade strategy, which emphasises the development and improvement of production as a means to enhance income and create employment opportunities, particularly for women and youth.
“The strategy further highlights the critical need for robust infrastructure, business skills, and a conducive environment to nurture horticultural development. Our partnership with the World Bank will continue to flourish as we jointly pursue this noble endeavour,” the Minister of Trade, Industry, Business Development, and Tourism Mokhethi Shelile said during the launch yesterday.
The government, he said, in tandem with the CAFI project, is committed to realising the objectives outlined in the second National Strategic Development Plan, which underscores the significance of entrepreneurship, innovation, and targeted investments in fostering sustainable job creation. He said the Entrepreneurship Hub and Seed Financing Facility perfectly aligns with the ministry’s National Trade Strategy, which emphasises the development and improvement of production as a means to enhance income and create employment opportunities, particularly for women and youth.
CAFI Project Manager Chaba Mokuku said while close to half of the country’s population is living in abject poverty, the private sector is the answer to that challenge, hence the introduction of the CAFI project. The project, he said, will ensure that the private sector becomes the engine of economic growth as expected.
“The project is timely because it comes at a time when the country is recovering from the devastating socio-economic impacts of COVID-19 and lately from the Ukraine War, which is affecting economies across the world,” Mokuku said.
The project has three pillars that are designed to transform the private sector into an engine of growth in Lesotho. The first is improving the business environment, with the main focus on levelling the playing field for the private sector to become competitive. According to Mokuku, the main intervention under this pillar is the enhancement of government digital systems to reduce the cost and time of doing business in the country.
“We have digital systems across ministries that are intended to ensure that the government becomes efficient in delivering its services. We are also working with financial institutions to see how we can improve access to finance for MSMEs,” he added. The second pillar is increasing the participation of small and medium-sized enterprises in high-potential value chains. Another high-potential value chain that is supported by the project is the horticulture value chain, with the main focus on the production of deciduous fruits in the country.
To date, the country has successfully piloted the production of deciduous fruits, and rural farmers have been actively participating in this sector. The third pillar is supporting MSMEs entrepreneurship through the establishment of an entrepreneurship hub as a seed financing facility. Lack of entrepreneurship, coupled with a lack of access to finance for startups, have been cited as some of the main challenges.
So the hub is intended to strengthen the entrepreneurship ecosystem by bringing together various ecosystem plans and co-ordinating the efforts of various stakeholders in building a coherent entrepreneurship ecosystem.
