Lesotho, with its new coalition government led by Thomas Thabane’s All Basotho Congress (ABC), has prioritised the acceleration of economic growth along with the restoration and maintenance of political stability, peace and good governance amidst challenging global, regional and local environments. This involves instituting the much-anticipated independent constitutional, administrative and political reform procedures, which will be undertaken with assistance from the international community. The energy and goodwill of all Basotho is being drawn upon to create an inclusive process that is inspired by the National Vision 2020 document.
While emphasising the importance of controlling expenditure and intensifying revenue collection in the short to medium-term, Government anticipates improving prospects on the global and regional front. This is based on the expected economic recovery in South Africa of 0.8 percent in 2017 and 1.6 percent in 2018, and growing activity in international economies as manufacturing and trade strengthen along with financial markets. Following growth of just 2.1 percent in 2016/17, the domestic economy is forecast to recover to an average of 3.4 percent over the medium term. The improved economic outlook rests on increased agricultural production following better rains, and projected mining growth of 17.3 percent in 2017/18 as a result of the recovery in global demand for diamonds. Other promising industries include textiles and apparel manufacturing, which is finding increasingly diversified markets, and the tourism sector, where a revised tourism master plan, investment policy and promotion strategy are being completed.
An emerging dynamism is evident in Lesotho’s private sector, which has the potential to set the country on an upward growth trajectory, provided political stability is fostered and maintained. Government is committed to re-energising dialogue with the private sector as part of a collaborative effort to accelerate investment, economic growth and job creation. This will be formalised in the next National Strategic Development Plan (NSDP), whose implementation will begin in 2018/19.
Trade and market access are also in the spotlight, with the development of industrial infrastructure at Tikoe and Ha Belo, and establishment of effective national standards. Legislation to further both trade and private sector development has been created, and includes the Business Licensing and Registration Bill, Competition Bill and Trade and Tariff Administration Bill, which are being presented to parliament in the near future. When passed, these bills will simplify trade licensing, reduce uncompetitive business behaviour, and consolidate the administration of tariffs under the SACU Agreement.
The Private Sector Competitiveness and Economic Diversification programme is spearheading economic diversification, enterprise assistance and investment climate reform. Achievements to date include the roll-out of One-Stop Business Facilitation Centres to major manufacturing hubs such as Maputsoe and Mafeteng, implementation of the 2011 Land Act, regulations on land administration, modernisation of company law under the 2011 Companies Act, establishment of a credit reference bureau in 2015, and the introduction of the national identity card. In addition, the Financial Inclusion Strategy is being implemented as a means of boosting entrepreneurship and private sector activity. It seeks to improve access to financial products and services in the rural areas, deepen usage of such products across a wide spectrum of instruments, and increase the take-up and effective use of mobile money and digital finance products and services.
Lesotho’s future growth is highly dependent on attracting increased attention from global and regional investors, and it is thus important that the opportunities which presently exist for private sector investment are marketed and promoted to potential investors and business leaders. The Lesotho Review provides a comprehensive overview of the country’s business climate and major economic sectors, as well as current policies, development programmes and investment incentives, making it the ideal medium for showcasing Lesotho as a viable investment destination to the business community and investors worldwide.