MASERU – Lesotho’s ailing economic conditions could improve steadily with the introduction of national standards that are in line with the Commonwealth Standards Network (CSN).
This was revealed on Wednesday during a two-day standards and trade stakeholder workshop organised by the Ministry of Trade with the support of the Commonwealth Standards Network (CSN).
CSN aims to tackle non-tariff barriers and promote trade amongst all Commonwealth states through the participation, adoption and implementation of international standards.
Lesotho is a beneficiary of the CSN.
International standards play an important role in promoting productivity and efficiency, reducing costs, and removing barriers to trade while driving economic growth.
As such, CSN is especially relevant to National Standards Bodies (NSBs) from Commonwealth nations that are looking to boost their international trade capabilities.
The two-day workshop was also aimed at creating awareness among stakeholders in a move towards the introduction and setting up of the country’s own national standards.
In this process, however, stakeholders warned that Small, Medium and Micro Enterprises (SMMEs) should not be left behind in a journey towards formulating the national standards as these are the people who may provide insight into what needs to be done by virtue of being on the ground and having to deal with trade challenges on a regular basis.
Government should also actively participate in this journey that is set to promote the use and awareness of international standards which, in turn, will have a direct impact on the country’s economy through reduced trade barriers and eradication of poverty.
With a population of about two million, Lesotho is classified as a lower middle-income country.
The country finds itself at a crossroads needing new engines for growth, a more streamlined role for the state and a dynamic private sector to help it seize opportunities in regional and global markets.
According to World Bank statistics, the country’s economy has faced challenges emanating from political instability and the ripple effects of a prolonged period of slow growth in South Africa.
These, the World Bank says, have led to falling Southern Africa Customs Union (SACU) revenue and liquidity challenges.
The World Bank further reports that economic growth from 2015 to 2017 averaged 1.7 percent.
A 0.6 percent of GDP revenue contraction was experienced in the 2017/18 fiscal year as a result of a contraction in agriculture output and fiscal challenges.
Some of these economic setbacks could soon be eliminated with the advent of national standards as trading across boarders would be much easier, thus opening new market doors for the country.
According to further statistics, the Commonwealth market includes 53 independent states which is home to 2.4 billion people.
The intra-Commonwealth investments therefore generate three times more jobs than investments from non-Commonwealth countries and they are projected to hit one trillion US dollars by 2020.
Minister of Trade and Industry, Habofoanoe Lehana, confirmed that with the ongoing economic conditions, the country desperately needs the standards institution and has to create its own national standards body.
Commonwealth countries on average tend to trade around 20 percent more and generate 10 percent more investment with each other than with non-member countries.
Furthermore, bilateral costs for trading partners in Commonwealth countries are set to be 19 percent less on average compared to those in non-member countries.
“Lesotho desperately needs this body to develop her own standards and adopt international standards and run in tandem with her trading partners,” Lehana said on Wednesday during the opening of the two-day workshop.
In the past years, Government has always had a five-year development plan to, amongst others, move out of poverty.
As portrayed in the National Strategic Development Plan II (NSDP II), lack of commensurate quality infrastructure that runs with the economy stifles the initiatives that the private sector is making.
As a result, Government is responding to this call by operationalising the Lesotho Standards Institution (LSI) which was enacted in 2014.
“We believe that establishment of the LSI will go a long way in supporting our private sector to produce for export markets, hence, creating the desired jobs.
“We would certainly appreciate to be provided with technical assistance to gain the skills necessary to support development of our national standards and, of course, effective use of international standards in trade,” the Minister added.
Since Lesotho has acceded to the SADC Trade Protocol and is also a member of SACU, the Minister emphasised that the CSN initiative will assist Lesotho wise-up and get to maximise on opportunities provided by these arrangements.
To ensure things run smoothly towards the implementation of the Lesotho standards, Mthimkhulu Khohlokwane from the SMME Support Network agreed with the view that the private sector should not be left behind in mapping a way forward.
He said standards are important because the export market, for instance, only recognises national laboratories which will be available through the introduction of national standards.
“SMMEs should not be left behind because they are already on this journey through their different products. Some have their own analytical laboratories as we speak but the main problem is that the export market recognises national laboratories rather than the institutional ones.
“So we are saying a national laboratory should be set up and be used to confirm any results from elsewhere,” Khohlokwane said in an interview with Public Eye on Wednesday shortly after the workshop.
He said setting up the national standards would also reduce unfair competition that comes with substandard products from other countries into Lesotho.
The director of the standards department in the Ministry of Trade and Industry, Molebatsi Rabolinyane, shared similar sentiments, citing that while many people are afraid setting up standards may come with its own challenges within the business world, there are more advantages than disadvantages in setting up the standards.
He agreed SMMEs need to be supported through specialised programmes with regard to the setting of standards.
“We should be able to listen to their challenges through an integrated approach because they have other challenges beside issues of standards. This is important because you cannot have a functioning standards without engaging SMMEs in your planning,” Rabolinyane said in an interview with Public Eye on Wednesday.
He gave an example of India as one of the countries that succeeded in implanting national standards using a pragmatic approach to develop standard treatment guidelines for that country.