Experts debate economic growth options



MASERU – Lesotho’s small manufacturing sector which needs to be diversified faces teething challenges that hinder smooth workflow. However,  the government of Lesotho is taking steps to address these challenges, which includes investing in vocational training programmes, providing financial assistance to small and medium-sized manufacturing companies, and promoting the use of modern technologies in the manufacturing industry.

Lesotho, as a small country located in southern Africa, has a potentially diverse economy with a growing manufacturing sector, this is according to AFSiC Investing in Africa. The manufacturing industry in Lesotho is mainly focused on textiles and clothing, and it is an important source of employment and income for the country.

According to the Private Sector Foundation of Lesotho (PSFL) CEO Thabo Qhesi, challenges facing the manufacturing sector include a shortage of skills, high costs (no proper urban planning), and trade facilitation, which is mostly a problem because there is only one route used in terms of trading, which is the Durban port. He, however, mentioned some of the potentials Lesotho can get through manufacturing, stating that Lesotho is a member of the Southern African Custom Union (SACU), enjoying duty-free trade while on the other hand extending a common external tariff against imports from the rest of the world. He said Lesotho is a member of the African Union Commission and the Africa Growth Opportunity Act (AGOA), which allows Lesotho products to enter the US market duty-free.

“About 35 percent of the goods are exempted, and goods from Lesotho are duty-free. Even so, through all these opportunities, Lesotho is moving slowly, despite being given a chance by the US government to assist Lesotho’s goods in entering the US market.

“I believe the government should put such proposals at the forefront. Lesotho is also a member of the African Continental Free Trade Area (AfCFTA), where there is a free flow of goods and services across the continent, which boosts the trading position of Africa in the global market.

“There are also other things in which Lesotho is still lacking, which are standards. We had proposed that Lesotho should have a standard body, but to date, there are still no standards.

“Lesotho is encountering a lot of challenges, such as huge costs to meet the standards of South Africa. We had also proposed that there be a board that governs the Lesotho Standards Institution (LSI), but to date it has also not been implemented,” Qhesi said.

On the other hand, Millennium Challenges Account (MCA) Lesotho CEO ‘Mannana Phalatse said over the next five years, US$10 million (M190, 543, 000) is set aside for the funding of the private sector.

He said 60 percent of the funding will go towards supporting the private sector, whereas 40 percent will go towards the government. She said they are working in three thematic areas of the compact, which are: the finance technical working group; agriculture; and, gender and social inclusion technical working group.

In line with this, during the public-private dialogue launch on Wednesday this week, the Minister of Trade, Industry, and Business Development, Mokhethi Shelile, said that the key to addressing the challenges facing the Lesotho economy lie in enhancing the efficiency of cooperation between the government and the private sector.

He said one of the ways to achieve that is through the establishment of a public-private dialogue that provides an interactive platform for generating solutions.

“It is evident that the COVID-19 pandemic continues to have a persistent and multifaceted negative impact on cross-border investment during the national, regional, and global financial crises that occurred a decade ago. To ensure Lesotho’s economic recovery, it is imperative that the government and private sector forge a robust partnership. This partnership aims to cultivate a rapidly expanding economy that can reintegrate those affected by the pandemic job losses while simultaneously generating fresh employment prospects,” he said.

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