Situated in the heart of South Africa, Lesotho has a substantial consumer market at its doorstep, as well as being in close proximity to the port at Durban on South Africa’s east Coast. This gives it access to South Africa’s first class infrastructure and communications networks and through this the wider international community, making it suitable for export-oriented manufacturing industries.

Lesotho’s political and regulatory environment is stable and investor-friendly, with its free market economic system forming the basis for sustained development and growth. The legal framework is solid and based upon the rule of law, as demonstrated by anti-corruption cases upheld by the best judges in the world. The country’s labour force is young, predominantly English speaking, highly versatile and trainable, and wages are substantially lower that in South Africa. Serviced industrial sites and factory shells are available for rental at competitive rates, with a subsidy provided to investors who erect their own factories at designated sites. Investment in Lesotho is protected through Multilateral Investment Guarantee Agency (MIGA).

The Lesotho Government has establishes a ‘one-stop-shop’ for the speedy processing of import and export permits, and plans to improve infrastructure (water, electricity, refuse removal and others) are underway. Furthermore, the Lesotho Revenue Authority (LRA) is putting in place a new system to streamline the process of refunding Value Added Tax (VAT) in order to lessen the cash-flow problem of firms.


LESOTHO NATIONAL DEVELOPMENT CORPORATION

The Lesotho National Development Corporation (LNDC) is a development institution falling under the Ministry of Trade and Industry, Cooperatives and Marketing. The corporation seeks to facilitate economic growth and development in Lesotho, particularly through the promotion of the country as an attractive investment location to both foreign and indigenous investors. Investment services offered by the LNCD include:

• Facilitating the procurement of all permits and licenses.
• Providing assistance with company registration.
• Undertaking investment project appraisals.
• Equity participation in projects considered to be of strategic importance to the national economy and also demonstrate long term viability.
• Subsidies to investors wishing to construct their own industrial buildings at LNDC serviced sites.

Supported by a healthy government-administered incentive regime, the LNDC has clear channels of communication with other government departments and parastatals to speed up service delivery. The corporation’s Investment Services Division is involved in assisting potential investors with the process of work permits and residency applications, registration and other requirements.

Visit the LNDC website at: http://www.lndc.org.ls

INVESTMENT PROSPECTS IN LESOTHO

Lesotho is a founding member of the Southern African Development Community (SADC), a grouping of 14 southern African countries of Angola, Botswana, Democratic Republic of Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. Lesotho provides the potential investor with access to a market of over 218 million (2004 estimates) within an enabling environment of political stability, attractive investor incentives, low labour costs and a geographic positioning with infrastructure that provides easy access to the SADC market and beyond.

Projects which have the potential to fulfill Lesotho’s wider macroeconomic and developmental goals are encouraged. Priorities include diversification of the industrial base to include manufacturing enterprises other that the garment and apparel sub-sector, with government focusing development on areas where Lesotho has a comparative advantage and therefore stands a chance of competing with the rest of the world. The introduction of new production techniques and transfer of technology are important considerations, with joint venture arrangements between Basotho entrepreneurs and foreign investors vigorously encourages, particularly with regard to projects such as telecommunications infrastructure and housing development. Regional markets are being developed for export in addition to existing international agreements. South Africa is seen as having great potential, with labour-intensive export-focused manufacturing to be targeted.

The development of tourism infrastructure and facilities is another key area. Lesotho’s rugged, natural beauty, complemented by vast dams and snow capped mountains in winter, is unique in southern Africa and contains potential for adventure and sports tourism that is yet to be fully explored.

Investment opportunities in Lesotho include: Knitted fabric mill, Leather and footwear manufacturing, Assembly of consumer electrical and electronic appliances, food processing, water bottling, plastic products, resource-based projects, environmental projects (waste recycling) and infrastructure development.