Rethabile Pitso
THE Competitiveness and Financial Inclusion (CAFI) this week rolled out a series of high-level engagements aimed at strengthening Lesotho’s trade network, empowering local enterprises and advancing efforts to build resilience in regional and continental markets.
On Monday, CAFI hosted its Demo Day, a showcase that brought together local and international investors to listen to pitches from 15 emerging enterprises.
The businesses had just completed a six-month incubation programme under CAFI, designed to prepare them for investment readiness and market expansion.
On Tuesday, attention shifted to the country’s struggling textile industry as CAFI convened the second meeting of the Textile and Apparel Sector Thematic Working Group (TWG) — a forum bringing together trade unions, government agencies, private-sector players, development partners such as GIZ, and institutions including the Land Administration Authority, LNDC and BEDCO.
The meeting focused on strategies for regional and continental trade, particularly in light of new disruptions affecting the sector.
CAFI is a World Bank-funded project under the Ministry of Trade, Industry and Business Development, created to revitalise the private sector, improve financial inclusion and stimulate economic growth. This year, 54 enterprises took part in its incubation programme, from which the top 15 were selected to pitch before investors during Demo Day with the hope of securing critical financing.
Addressing the gathering, CAFI Managing Director, Chaba Mokuku, said the event marked a major milestone for Lesotho’s entrepreneurship landscape.
“Between 2020 and 2022, many economies around the world were severely impacted by COVID-19, and Lesotho was no exception,” he said. “Value chains were disrupted across priority sectors such as manufacturing, particularly textile and apparel, as well as tourism and agriculture. MSMEs and start-ups were especially hard-hit because they are less resilient to external shocks.”
Mr Mokuku said the government and the World Bank launched CAFI to help rebuild the private sector by creating an enabling environment for growth and expanding opportunities for youth and women.
With a budget of M100 million, CAFI has prioritised the horticulture and textile sectors — some of the hardest hit during the pandemic. He said the project has already delivered major gains, with more improvements on the way through new digital platforms intended to streamline business processes.
“We have deployed digital business and trade facilitation systems to be launched by the end of this year or early next year,” he said.
These include: a Business Facilitation Single Window at the One Stop Business Facilitation Centre (OBFC), designed to simplify business registration and licensing, and a Trade Facilitation Single Window for issuing import and export permits, licences and certificates — easing burdens, particularly for MSMEs.
He added that the government is working with South Africa to remodel border infrastructure and install digital systems to improve cross-border trade, including enhanced immigration and customs management tools.
Even as CAFI works to stimulate recovery, Lesotho’s textile sector is confronting a fresh crisis. This follows heavy tariffs imposed by US President Donald Trump — a move that has destabilised Lesotho’s access to the AGOA market and shaken the industry’s foundations.
Prime Minister, Sam Matekane, recently convened a Public-Private Dialogue (PPD) to address the crisis, from which the TWG was established. The TWG focuses on two sectors: textile and apparel, and agro-processing.
Investment Promotion Manager, Tšehla Letlotlo, said the TWG’s mandate is to craft a strategy to revive the textile sector and reposition it for new markets.
“We started by interrogating the challenges within the sector and how they could be mitigated to enable efficiency,” Mr Letlotlo said. “One of our key solutions is to diversify into other markets, which will also require diversifying our products.”
He said Lesotho is now eyeing the Southern African Customs Union (SACU) region, the broader African market under the African Continental Free Trade Area (AfCFTA), and the European Union (EU) market.
“AGOA was lucrative because we traded in high volumes and earned in dollars. But unlike AGOA, Europeans are very particular about style. If an order demands a specific style, that may affect production, especially given the limited skills among our workforce. There is a need to capacitate workers to sustain the industry.”
