Lesotho committed to African free trade



MASERU – Lesotho officially ratified the African Continental Free Trade Area (AfCFTA) in 2021, demonstrating its commitment to full implementation of the agreement. This membership presents significant opportunities for the private sector to expand its market base, particularly given the limited size of Lesotho’s domestic market.

AfCFTA represents a comprehensive trade agreement aimed at bolstering Africa’s economy by removing trade barriers across the continent. Its primary objective is to substantially enhance intra-African trade, with a focus on value-added production and trade across all sectors of the economy. This preferential market access provided by the AfCFTA will enable the private sector to diversify both products and markets, positioning itself within the regional value chain.

According to Mpeshe Selebalo, Trade Promotion Officer at the Ministry of Trade, Industry, and Small Business, all 55 African countries have signed the agreement, with several having already ratified it. He said the goal is to foster trade among African nations. Selebalo noted that intra-African trade currently stands at around 17 percent, considerably lower compared to Europe and South America.

Given Lesotho’s small population and market size, the objective is to achieve economic growth driven by exports, targeting markets beyond its borders. “In that context, the AfCFTA represents a significant market, encompassing approximately 1.3 billion people, with Africa’s collective GDP reaching around three trillion USD—a substantial figure.

“While trading activity is somewhat higher among countries in the southern region of Africa, there are still barriers inhibiting trade with nations in the western and northern regions. “Lesotho is renowned as a major exporter of wool and mohair, with the majority of its population residing in rural areas. Access to markets significantly facilitates investment in our businesses.

“Moreover, in terms of standards and development, African nations share similarities, simplifying intra-continental trade. “However, challenges arise in emerging sectors within Lesotho, where inputs often originate from regions lacking trading agreements, resulting in steep border tariffs,” he said.

Selebalo also highlighted the Ministry’s National Trade Strategy, which prioritises products outlined in the National Strategic Development Plan (NSDP II), namely; agriculture and light manufacturing, particularly textiles and clothing, with active participation from women and youth. He said easing trade barriers, facilitated by the AfCFTA, plays a crucial role in advancing these sectors.

“Trade agreements alone do not provide all the solutions to our challenges, but they are certainly valuable tools in our arsenal. Therefore, I encourage our colleagues in the private sector to seize the opportunities presented by trading. “Additionally, regarding services, we are focused on streamlining trade processes, particularly for young entrepreneurs, leveraging the growing importance of technology, as highlighted by the impact of COVID-19.

“We are actively developing the National Services Strategy to capitalise on existing strengths and forthcoming opportunities. Digital trading is increasingly significant, and its potential is already becoming apparent, sparking excitement in this realm. “Regarding government efforts to facilitate trade, we have been diligently working on various initiatives. For anyone interested in trading across African countries, the AfCFTA provides a platform to connect with potential partners abroad,” Selebalo also noted.

In alignment with these efforts, the United Nations Development Programme (UNDP) unveiled the national Human Development Report (HDR) 2023–2024 last Friday. The theme, “Breaking the Gridlock: Reimagining Cooperation in a Polarised World,” underscores the essence of the latest Human Development Report (HDR), which, like its predecessors, delves into the barriers hindering individuals from realising their full potential and proposes solutions to address them.

This report meticulously examines the factors contributing to the escalating polarisation, the resultant gridlock in collective action, and offers strategies to foster cooperation and overcome impasse. During the launch event, various ministries, including trade, were queried on how Lesotho could capitalise on the implementation of the AfCFTA.

UNDP Resident Representative, Jacqueline Olweya emphasised the report’s global mission to enhance human development, highlighting the publication of over 700 reports across 143 countries, with dissemination in all 165 countries where UNDP operates. She acknowledged Lesotho’s strides in certain indicators, notably education, juxtaposed with setbacks in others, particularly health, underscoring the need to bridge these gaps and furnish the requisite data.

Olweya explained that the HDR serves to ignite discourse on pivotal developmental issues, such as the gender development index, the human development index, and the gender inequality index. She noted the recent release of the HDR 2023/2024 themed “Breaking the Gridlock: Reimagining Cooperation in a Polarised World,” tracing its inception back to 1990, coinciding with the introduction of the concept of human security.

Echoing these sentiments, the Ministry of Finance and Development Planning’s Director of National Monitoring and Evaluation, ’Malefu Khanyapa underscored the pervasive influence of polarisation, attributing it as a significant impediment at both global and national levels. She referenced Lesotho’s standing, ranking 168th out of 193 countries on the Human Development Index (HDI), reflecting the severity of the challenge. Recent studies reveal Lesotho’s HDI at 0.514 points in 2021, positioning it in the 168th place among the 191 countries surveyed.

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