SADC region discusses SME challenges

RETHABILE MOHONO

MASERU – Lesotho forms part of the 6TH Annual SADC Industrialisation Week (SIW), an annual public private engagement platform aimed at fostering new opportunities for intra-African trade, developing cross border value chains, and identifying investment opportunities in Southern Africa. Annually, SIW brings together leading private sector experts, and regional and global policymakers, Development Finance Institutions, SADC officials, donors, civil society and leading industrialists and captains of industry in SADC and on the continent to identify investment opportunities, industrialisation bottlenecks and jointly recommend solutions.

The 6th SADC Industrialization Week (SIW) was hosted by the government of the Democratic Republic of the Congo from August 2 to 6. The theme for the 6th SIW was “Promoting industrialisation through agro-processing, mineral beneficiation, and regional value chains for inclusive and resilient economic growth.”  The 2022 SIW was the sixth event following the successful SIWs held in eSwatini, Republic of South Africa, Namibia, Tanzania and Malawi, over the last five years.

Lesotho was represented by an entrepreneur, lecturer, actor and communications specialist, Matšeliso Mohale, who came back home to implement what the participants discussed during the industrialisation week. Mohale said they focused on economic interventions for SMEs, Women, Youth Entrepreneurs and cross-border traders to realise the region’s industrialisation and economic development.

They also discussed challenges faced by SMEs, in particular women and youth. “Organisations which were represented included UN Women, GIZ/GOPA, African Women in Business, Botswana Exporters and Manufacturers Association and Afriexim Bank,” she said, adding that key challenges identified during the gathering included access to finance, limited access and use of technology and limited access to market.

According to SADC Business Council, Lesotho has an estimated population of 1.97 million comprising mostly of younger population (less than 25 years) which makes up about 50.6 percent of the population, those in the age bracket of 25-64 years makes up about 43.8 percent of the population and above 65 years’ age group makes up about 5.6 percent of the population.

Lesotho’s geographical position provides investors with access to the regional market (SADC) of 16 countries with an estimated 200 million population and GDP of US$600 billion (about M9,6 billion). It further highlighted the textile and garment industry are the country’s largest private sector employer as garments produced are usually exported to South Africa and the US. Main exports include clothing, footwear, diamonds, electricity, wool and mohair, food and live animals.

Lesotho’s garment firms specialise in the production of denim garments (mainly jeans and garments made from cotton knit fabrics, such as T-shirts and leisure wear). It is estimated that Lesotho’s 42 apparel firms each year make 90 million knitted garments, and 26 million pairs of jeans. The Formosa denim mill uses African cotton to make a minimum of 6 300 tons of denim fabric a year and about 10 800 tons of cotton (and cotton blends) yarns which is suitable to make knitted fabrics.

The industry is now the largest formal sector employer in the country after the government, employing more than 38 000 people. It continues to remain the largest sub-Saharan exporter of garments to the USA, with an estimated 85 percent of total exports going there. Purchasers of Lesotho’s garments include well-known brands such as GAP, Reebok, Levi Strauss, Ralph Lauren, Walmart, Calvin Klein Jeanswear and J.C. Penney, among others.

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