AS reported elsewhere in this edition, Lesotho has slumped on the Global Competitiveness Index (GCI) — from 113 to 120 out of 138 countries. The GCI is the world’s most comprehensive assessment of national competitiveness and highlights the strengths and weaknesses of each of the economies featured.
According to the CGI, the Mountain Kingdom has continued to decline in competiveness over a two year period from number 107 in 2014 and number 113 in 2015.
Among the major barriers to doing business in Lesotho over the past three years are access to finance, which remains far and away the main problem, followed by corruption and policy instability.
In other areas, such as infrastructure development, technological readiness, labour markets, financial markets and the training of the labour force, Lesotho also does not fare well.
If ever they were in doubt, the seven-party coalition government has its work cut out to reverse these statistics. This is because competitiveness also entails higher productivity – which is a key driver of economic growth and resilience.
The economy desperately needs to be more competitive considering the volatility and uncertainty of Southern African Customs Union (SACU) revenues. Lesotho needs to diversify its economy and increase competitiveness to spur growth.
It cannot be emphasised enough that government cannot afford to sit on its laurels.
In its report, the World Economic Forum (WEF) states that the economic crisis of 2008 and the relative performance of economies since its onset have shed light on how structural weaknesses can exacerbate the effects of, and hinder recovery from shocks.
During the crisis, the WEF notes, the more competitive economies systematically outperformed the least competitive in terms of economic growth. They either withstood the crisis better or recovered more quickly.
At the heart of an economy’s competitiveness is its capacity to leverage talent. The high unemployment rate in Lesotho, for instance, weighs heavily on the economy and society, resulting in a significant segment of the population disenfranchised and raising the risk of unrest.
The first port of call in addressing these issues is tackling the challenges in the education delivery system. Lesotho cannot afford to continue churning out half-baked educational graduates who are ill-equipped to compete with other nations on the job market.
There is need also for more concerted efforts to ensure no child is left behind in acquiring basic education.
Government will also need to address the glaring infrastructure deficit as highlighted in the CGI. Lesotho needs to be an attractive destination for foreign direct investment and that will only happen if basic infrastructure is in place.
But it would appear government and other stakeholders remain focused on politics to the detriment of economic fundamentals as noted by the European Union in its recent assessment of the socio-economic situation in the country.
And despite us pointing this out in our last edition of our sister publication, the Sunday Express, yet another political party is on the cards after the Majalefa Movement announced their imminent transformation into a fully-fledged political party.
How does the proliferation of the political parties improve our economy? If anything, political parties have shown themselves to be a means to accessing economic opportunities through the award of tenders, a scenario that only consumes rather grow the national cake.
The parties are in fact the symptom of the absence of meaningful economic activity in the country hence they are predators devouring whatever little is generated on the economic front.
We once again urge government and all stakeholders to address the issues that have been identified as inhibiting business and competitiveness.
Ultimately, becoming more competitive is not an option but a necessity for Lesotho.