Leemisa Thuseho
THE African Export-Import Bank (Afreximbank) has announced its readiness to unlock between USD$300 and USD$400 million (M5.4 to M7.2 billion) in investments for Lesotho.
This declaration was made by Afreximbank’s head of project preparation, Zitto Alfayo, during an interview with the Lesotho Times at a recent Joint Project Preparation Facility (JPPF) workshop between the bank and the Lesotho National Development Corporation (LNDC).
The workshop, themed: Leveraging Project Preparation to Boost Trade and Investment in Lesotho, was held at Avani Maseru over the weekend.
Afreximbank is a pan-African multilateral financial institution created in 1993 under the auspices of the African Development Bank in Abuja, Nigeria, in October 1993. Its headquarters are in Cairo, Egypt. It is a financial provider to African governments and private businesses in support of African and Caribbean trade.
Afreximbank shareholders are a mix of public and private entities divided into four classes and consist of African governments, central banks, regional and sub-regional institutions, private investors and financial institutions, as well as non-African financial institutions, export credit agencies and private investors. Lesotho is one of the 51 African states owning a stake in the bank.
“We have allocated sufficient funding ranging from USD$300 to USD$400 million in investments, specifically for Lesotho,” Mr Alfayo said.
He noted that the targeted sectors include infrastructure, industrialization, manufacturing, and export development, among others.
Mr Alfayo emphasized that one of the workshop’s key objectives was to address a significant challenge facing the African continent: the lack of a sustainable number of investment-ready projects.
“The issue is not a lack of ideas; there are plenty. The problem is packaging these projects in a way that meets financial institutions’ expectations,” he explained.
To tackle this, Afreximbank is providing technical and financial support services, helping to assemble project documentation that will meet the standards required by financial institutions.
“We are aware that it often takes a long time for developers to secure funding from financial institutions. Through these interventions, we aim to shorten that time by ensuring projects are well-prepared. This will also accelerate the number of projects brought to the market,” Mr Alfayo added.
Additionally, Afreximbank is assisting LNDC in establishing its own Project Preparation Facility (PPF) to support local investors. The PPF initiative supports the development of bankable, investment-ready projects, assisting with project concept, design, and scoping, all the way to financial closure.
“As a development financial institution, we are helping LNDC benefit from our experience. We teach them how to prepare projects, enabling them to flourish and assist the government,” Mr Alfayo said.
The LNDC’s interim chief executive officer, Molise Ramaili, highlighted the rigorous assessment required to develop a concept into a bankable project, including technical, financial, commercial, environmental, social, and legal feasibility.
“This partnership will prepare transformational projects for bankability and investment readiness,” Advocate Ramaili said.
He emphasized the collaboration aims to build a pipeline of bankable projects that the private sector can finance, thereby unlocking development impact in the country.
Adv Ramaili said the JPPF partnership would strategically support the development and implementation of quality projects, rapidly progressing novel concepts to bankability, and accelerating the establishment of manufacturing and industrialization plants.
“This ensures economic diversity and resilient economic growth,” he added.
For his part, the principal secretary in the Ministry of Trade, Industry, and Business Development, Thabo Moleko, praised the partnership between LNDC and Afreximbank, noting that the workshop had provided a valuable platform for stakeholders, particularly from the private sector, to interact with development finance experts.
“Our mission is to position Lesotho to engage effectively with institutions like Afreximbank, ensuring our economy’s expansion, diversification, and development for regional, continental, and global trade,” Mr Moleko said.
He also acknowledged that access to finance has been a significant barrier across Lesotho’s economic sectors.
“For small business start-ups, the issues are lack of collateral and bankable proposals, while for long-term investments, banks are often reluctant to finance long-term projects. These challenges have been recognized by the government, and the workshop initiative reflects our progress in addressing them,” he said.
