Moroke Sekoboto
PRIME Minister Sam Matekane has appealed for greater financial assistance to least developed countries (LDCs) and landlocked developing countries (LLDC)s like Lesotho.
Speaking at the Fourth International Conference on Financing for Development (FFD4) in Seville, Spain, on Monday this week, Mr Matekane conveyed warm greetings from His Majesty King Letsie III, expressing gratitude to the Spanish government and its citizens for their hospitality.
He drew attention to impediments such as climate change, substantial debt burdens, and restrictive trade policies, which he said obstruct advancements towards the 2030 Agenda and the Sustainable Development Goals (SDGs).
Characterising the FFD4 Summit as a “crucial moment for member states”, he said at a time when numerous countries, particularly across Africa, are grappling with severe economic constraints “we must renew our commitments to address the widening financing gap”.
Premier Matekane stressed the vital role of Official Development Assistance (ODA) for LDCs such as Lesotho, which face complex socio-economic issues such as high youth unemployment and insufficient public services in areas like education, health, and infrastructure.
“The decline of ODA not only threatens our current advancements but also endangers our future prospects,” he said, urging development partners to fulfil their ODA commitments and consider establishing multi-year cooperation agreements for more predictable funding.
Mr Matekane said trade was a fundamental driver of development, appealing to transit countries to implement more favourable policies to facilitate access to international markets for landlocked developing countries (LLDCs).
He reiterated the call for developed nations to grant duty-free, quota-free access for all products originating from LDCs, in line with the provisions outlined in the FFD4 Outcome Document.
Mr Matekane’s appeal for LDCs to receive duty-free, quota-free market access in developed nations comes at a challenging time for Lesotho.
Three months ago, the United States declared a state of emergency on trade and imposed steep 50 percent tariffs on goods imported from 180 countries including Lesotho.
On April 2, dubbed “Liberation Day”, US President Donald Trump announced a national emergency concerning his country’s trade deficit and introduced “reciprocal tariffs” targeting all countries not under other sanctions.
A standard 10 percent tariff on nearly all US imports became effective on April 5, although the reciprocal tariffs were temporarily suspended for 90 days. The 90-day suspension by President Trump on the implementation of these “reciprocal” tariffs, affecting approximately 180 trading partners, is set to expire on July 8.
Lesotho’s efforts to engage in negotiations with the US government to reverse the steep tariffs have been unsuccessful, with planned meetings in late April and early May falling through.
Compounding Lesotho’s difficulties, the US declaration of a trade state of emergency automatically nullified the African Growth and Opportunity Act (AGOA) – a US law allowing eligible Sub-Saharan African nations to export goods to the US tariff-free.
Under AGOA, Lesotho’s textile industry flourished for nearly 25 years starting in 2000, at one point employing 53,000 people and ranking as the second-largest employer after the government.
Although the sector has shed thousands of jobs over the past eight years, the imposition of these tariffs has severely impacted Lesotho, jeopardising 12,000 of the remaining 31,000 textile jobs tied to the US market.
Consequently, many factories nationwide are implementing layoffs or sending workers on short-term leave due to reduced orders and the financial burden of the tariffs.
A key focus of the Prime Minister’s address was the mobilisation of domestic resources.
“Developing nations must be empowered to mobilise domestic public resources for sustainable development,” Mr Matekane said.
Lesotho’s premier further underlined the importance of collaborative efforts to combat illicit financial flows and improve tax systems, incorporating measures like digital taxation frameworks.
Addressing the escalating debt crisis in sub-Saharan Africa, where debt servicing consumed nearly half of governments’ revenues in 2023, Mr Matekane advocated for a reduction in borrowing costs.
He stressed the need for coordinated policies to foster long-term debt sustainability, stating, “We must work together to ensure vulnerable countries are not trapped in a cycle of unmanageable debt”.
Furthermore, Mr Matekane acknowledged the critical contribution of Science, Technology, and Innovation (STI) to achieving the SDGs.
He asserted that, “Investment in digital infrastructure is of paramount importance, especially for countries like Lesotho, to leverage digital transformation and enhance regional integration,” highlighting the necessity of closing the digital divide, which disproportionately affects LLDCs.
Finally, Premier Matekane echoed a collective call from member states for reforming the international financial architecture to make it more equitable and responsive to the needs of developing countries.
“It is imperative that we create a financial system that serves us all, rather than one that perpetuates inequality,” Mr Matekane said.
As the conference continues, the insights shared by Mr Matekane are expected to resonate with the ongoing discussions on global financing for development, underscoring the interconnectedness of economic policies and the urgent need for collective action to address the challenges confronting LLDCs.
