Prime Minister Pakalitha Mosisili on Monday officially opened 11 factory buildings at Tikoe Industrial Estate which are owned by the Lesotho National Development Corporation (LNDC).
The factory shells, whose construction was bankrolled by government and development partners to the tune of US$28.4 million (approximately M380million), would be occupied by 10 new companies. The firms are expected to create more than 5000 direct jobs and help alleviate extreme poverty among Basotho.
In his keynote address, Dr Mosisili noted 27 hectares of land had been developed into “a fully-serviced estate with roads, water, electricity, and 11 factory shells.”
The premier paid tribute to the Arab Bank for Economic Development in Africa as well as the Organisation of Petroleum Exporting Countries Fund for International Development, which jointly funded the project with government.
Dr Mosisili further disclosed the shells were initially expected to cost US$24 million but “due to various challenges encountered during the 36 months of construction, this figure rose to US$28.4 million.”
The LNDC is a government institution tasked with promoting Lesotho as an attractive location for both foreign and indigenous investors.
“You will recall that over the past three years, the LNDC has intensified efforts to promote the diversity of investment and markets. It is gratifying to note that companies earmarked for these factory shells will manufacture diverse products that include textiles and garments, automotive leather-seats, stationery, blankets and furniture. These projects will predominantly service regional markets and take advantage of the recent 10-year re-authorisation of AGOA,” Dr Mosisili said.
The African Growth and Opportunity Act (AGOA) was introduced in 2000 by the American government to help eligible sub-Saharan African countries access US markets without paying duty. The legislation was supposed to expire this month but has since been extended to 2025.
However, according to the premier, it is further gratifying that of the 10 companies allocated space at the new estate, four are Basotho-owned.
“These Basotho-owned companies include Senettam Manufacturing, Quattro M and Tlotliso Holdings.
“In addition, five of the companies are from the People’s Republic of China, while one of them, Johnson Controls, which I had the opportunity to tour recently, is from the United States of America, and would be expanding its facility. Collectively, these companies will employ at least 5 108 Basotho. This will put the industrial employment of Lesotho well over 45 000,” he said.
Dr Mosisili emphasised government continued to prioritise the empowerment of local businesses.
“The initial plan was to include six smaller units of 500 square-metres for local entrepreneurs in this estate.
“This was meant to encourage and make it easier for them to integrate with larger companies through linkages, which should be the trend at all LNDC industrial estates going forward. Due to the challenges I mentioned earlier, this has not been happening but efforts are still being made to fulfill that promise.”
According to Dr Mosisili, further improvements expected at the estate include the construction of a police station, commercial buildings and private stalls for smaller traders who would meet the needs of the workforce at the factories.
“Economic activity within the estate is expected to have a multiplier-effect that will spur growth in other industries such as the transport sector, accommodation, cleaning and security services, just to mention but a few.
“Additional economic benefits from these investments will be increased tax-revenue, increased foreign exchange earnings and improvement in the balance of payment.
“Currently, our manufacturing sector contributes 12 percent to the GDP (Gross Domestic Product). This new development will make immense contribution towards our national goal of poverty-reduction and job-creation,” the premier concluded.
On his part, LNDC Chief Executive Officer (CEO) Kelebone Leisanyane said: “The mandate of the LNDC is to initiate, promote and facilitate the development of manufacturing and processing industries, mining and commerce in a manner calculated to raise the level of income and employment for Basotho.
“The commissioning and opening of this estate will facilitate manufacturing and production within 11 factory shells, whose size ranges from 2000 to 4000 square-metres, and with a total rentable space of 30 000 square-metres. Businesses earmarked for these shells are not only foreign-direct investors, but also include locals who will manufacture diverse products ranging from furniture, stationery to garments.
“Put together, factories at this estate will create well over 5000 direct jobs. And if we assume an overage wage of M1000 a month per job created, then the facility will generate M60 million per annum in wages. This will not only contribute to the achievement of the LNDC mandate but also that of the LRA (Lesotho Revenue Authority) and the retail sector in the form of improved purchasing power.”
Mr Leisanyane also spoke about additional developments earmarked for the estate.
“Let me also point out that out of the 80 hectares which comprise the entire Tikoe Industrial Estate, only 50 percent has been developed. This leaves an opportunity for further infrastructure development and construction of additional factory shells, leading to more jobs and further economic development,” he said.
Mr Leisanyane added this meant the LNDC would soon be knocking at the doors of Finance minister, Dr ’Mamphono Khaketla for more funding to further develop the Tikoe Industrial Estate.