Industry and Trade Minister Joshua Setipa and his Turkish counterpart after signing the Economic Cooperation Agreement between Lesotho and Turkey.
LESOTHO is currently on a drive to secure more external markets for its products and Turkey has been identified as a potential trading partner.
Last week at the Turkey-Africa Economic and Business Forum, Lesotho through the Minister of Trade and Industry Joshua Setipa, inked an Economic Cooperation Agreement with the Turkish government towards realising the goal of diversifying its markets.
Lesotho Times reporter Bereng Mpaki (LT) spoke to Mr Setipa (JS) to find out more about the deal and how it will benefit the two countries. Below are excerpts of the interview.
LT: What influenced the signing of the Economic Cooperation Agreement with Turkey?
JS: We embarked on a process of identifying countries all over the world that could benefit our country through strategic partnerships.
That does not mean we are not happy with our current trading partners.
We are simply saying that as we seek to diversify our products, we should also diversify our markets, because there is always a danger in concentrating on one market because when things go wrong in that market, we will have problems.
We experienced that when the USA had a recession in 2008 and their orders were reduced significantly resulting in job losses in Lesotho. So, to minimize risks like that, we have to expand our market.
We have identified a number of countries, among them, Argentina, Turkey, India, China, Chile and South Korea. We realised the need to put in place strategic partnerships that would allow us to pursue a whole range of economic objectives.
So, the Economic Cooperation Agreement that we have signed with Turkey is one such agreement. We are also proposing similar arrangements with the other countries we identified. We are also interested in Nigeria because of its potential as a source of investment and market for our products.
LT: What does the agreement encompass?
JS: The agreement stipulates a number of areas for cooperation. For example, we believe that we will benefit on issues like standards in addition to market access and facilitating investment.
It will enable us to build relationships that will facilitate collaboration between Turkish investors and Lesotho entrepreneurs in order to get them to set up business ventures locally or elsewhere for the benefit of both sides.
Turkey is one country that has achieved economic growth on the basis of small and medium enterprises. For instance, our leather sector which has so much potential could benefit from Turkish support as they could build the industry and also empower Basotho.
Turkey is also the home of Angora goats. Lesotho and South Africa produce a combined 61 percent of the world’s mohair and so by working with Turkey, we could improve the quality and volume of our mohair produce.
We want to use the agreement to drive partnerships and as a result we had some members of the local private sector in our delegation and they got an opportunity to talk to potential Turkish partners.
So, we want to facilitate such trade missions and we agreed with my Turkish counterpart that a trade delegation from that country would visit Lesotho before the end of the first quarter of 2017 in order to take this agreement forward.
We are also working on opening trade representation agencies in both countries.
The agreement also calls for the establishment of a bi-national commission which will meet once every two years with the objective of assessing performance and ensuring that the objectives of the agreement are fulfilled.
They also have a significant interest in infrastructure development. Turkey has some of the largest construction and engineering companies in the world, and if you go to Russia, their infrastructural development market is dominated by Turkish Companies. So they are keen to come to Lesotho.
The agreement also permits Turkish financing institutions such as the Turkish Exim Bank to finance projects in Lesotho.
LT: What sort of infrastructure do we require?
JS: Turkish companies are into different types of infrastructure including roads and airports.
LT: Will they finance private or public projects?
JS: If a Turkish and a Lesotho company enter into an agreement to build a conference facility, they could finance the project through the Exim Bank of Turkey which charges much more competitive rates than our commercial banks.
LT: Do you feel that Lesotho has the capacity to participate meaningfully in this economic agreement with Turkey?
JS: We still have challenges in terms of capacity to trade and this is why the agreement is important because Turkey is going to help us to build our capacity to trade. The technical assistance contained in the agreement will help us support our small and medium companies to trade. So we need that support to be able to grow our own enterprises.
LT: Lesotho is part of the Economic Partnership Agreement between African states and the European Union. How does this agreement with Turkey differ from the EPA?
JS: With EPA, Lesotho is viewed as part of a wider group of countries in the agreement. However, this one is more direct and much easier to implement because we will be dealing directly with each other and not with ten other countries.
Turkey is a developing country and some of their experiences are very relevant to our own experiences. That makes it easier for us to relate to their way of doing things because they are also a developing country.
LT: How does this agreement affect already existing agreements with other countries or regions?
JS: It does not affect them as they are different agreements with different terms and conditions.
LT: What is the next step towards operationalising the agreement following last week’s signing?
JS: The next step is to work out a strategy as Basotho on how to fully exploit this opportunity.
One of my immediate tasks is to engage the private sector to start identifying areas of interest that they can pursue with Turkish businesses.
LT: Is there a time frame for this agreement?
JS: It is a reviewable agreement, which will be assessed every two years and its expansion or termination will be a mutual decision.
