LESOTHO dropped seven points to number 120 out of 138 countries on the Global Competitiveness Index (GCI) in the 2016 rankings for trade.
This was revealed yesterday by Private Sector Foundation Chief Executive Officer Thabo Qhesi during a press briefing in Maseru which was held under the theme “Taking stock of 2016 in connection with private sector development”.
Mr Qhesi said the decline was worrying especially as it was occurring in consecutive years. Lesotho was ranked number 107 in 2014 and number 113 in 2015.
“It is imperative for policy makers and all stakeholders to pull up their socks,” he said.
The ranking is normally used by investors to gauge the economic competiveness of a country.
Defining competitiveness as a set of institutions, policies and factors which determine the level of productivity of a country, GCI scores are calculated using data covering 12 categories, referred to as pillars of competitiveness.
These are institutions, infrastructure, macro-economic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.
Mr Qhesi identified five key factors that contributed to Lesotho’s low performance in the business sector.
“The most problematic factors of doing business in Lesotho are: access to financing, corruption, inadequate supply of infrastructure, insufficient capacity to innovate and inefficient government bureaucracy.
“Late payments by government departments also affect businesses badly.”
He also criticised parliament for failing to adequately consult with stakeholders before enacting laws that affect business.
Mr Qhesi said the enactment of the draft Public Procurement Bill into law would go a long way in addressing the problem of corruption which was one of the obstacles to doing business in the country.
He also suggested there should be designated places for business in all the country’s ten districts.
Mr Qhesi however, commended the Central Bank of Lesotho (CBL) for introducing new laws to relax security conditions for loans from commercial banks.
He said the new innovation introduced by the CBL allowed people to put up their moveable property, such as vehicles, as collateral when seeking business loans from banks.