SINCE taking over as the Chief Executive Officer of the Lesotho National Development Corporation in November 2025, Thabo Khasipe has wasted little time redefining the institution’s role in Lesotho’s economic transformation agenda.
Armed with a background in taxation, trade policy and crisis management, Mr Khasipe believes Lesotho’s economic challenges go beyond poor implementation and require a complete structural rethink. Through LNDC’s recently launched Letsema Strategic Plan, he aims to reposition the corporation as the architect of a new economic ecosystem focused on industrialisation, local production and sustainable growth.
In an extensive interview with the Lesotho Times reporter Rethabile Pitso, Mr Khasipe unpacked the thinking behind the strategy, the country’s structural economic weaknesses, and why he believes Lesotho must urgently shift from being an import-driven economy to a production-led one.
Excerpts:
LT: Since joining the LNDC, have the conditions been favourable for advancing the vision you had before assuming office?
Khasipe: The conditions have actually been very favourable. From day one, I found a highly supportive environment internally, starting with the Ministry of Trade, Industry and Business Development, the minister, principal secretary, directors and everyone involved. The principal secretary also chairs the LNDC board, which created a strong alignment from the outset.
The board itself, executive management and the staff welcomed me warmly and were very receptive to the vision I brought. What stood out most was the willingness of the staff to collaborate and contribute meaningfully to that vision.
Externally, I also found stakeholders eager to engage. When we began developing the new strategy after the festive season, we consulted widely with industrialists, government ministries and international development partners. Those sessions were highly productive because people were willing to openly share their perspectives and help shape the strategy.
So overall, both the internal and external environments have been conducive for presenting the vision and refining it collectively.
LT: We understand you hit the ground running after assuming office, particularly with the Letsema Strategic Plan. Can you unpack what the strategy is about?
Khasipe: The Letsema strategy began with articulating my vision internally and then opening it up for refinement through stakeholder input. One thing I strongly believe in when formulating strategy is that you must first diagnose the problem you are trying to solve.
Too often, leaders and policymakers rush to interventions without fully understanding the underlying issue. It is no different from a doctor diagnosing a patient. Symptoms matter, but unless you identify the root cause, you cannot solve the problem sustainably.
That is exactly what we did at LNDC. We took a deep dive into the structure of the Lesotho economy and concluded that our economy is structurally constrained.
By structural constraints, we mean the economy is organised in a way that limits sustainable growth. Lesotho is highly dependent on imports while having very low export capacity. At the same time, our currency, the loti, is pegged one-to-one with the South African rand under the Common Monetary Area arrangement.
Almost everything we consume is imported — food, fuel, pharmaceuticals, building materials, energy and even clothing. Those are what we call “wage goods”, the basic essentials people spend most of their income on.
The challenge is that when the economy grows, demand for those goods rises sharply, but because they are imported, imports surge. That places immense pressure on our foreign exchange reserves because we need rand reserves to buy goods from outside the country.
Countries earn foreign currency through exports. But if you are importing heavily while exporting very little, you end up trapped in a vicious cycle where growth itself becomes unsustainable.
That is why Lesotho has historically struggled to sustain economic growth above five percent. We may hit that level briefly, but then growth falls again because the economy overheats under import pressure.
LT: Why does this happen?
Khasipe: Because growth increases spending power. People consume more food, fuel, energy and construction materials. But since those products are mostly imported, the country must continuously draw down foreign reserves to pay for them.
The Central Bank therefore becomes concerned about preserving reserves because if reserves collapse, the country risks a balance of payments crisis. That means you eventually run out of money to buy fuel, food, pharmaceuticals and other essentials.
Once shelves can then become empty and fuel stations run dry, an economic crisis can quickly become a social and political crisis.
This issue is fundamental to understanding Lesotho’s economy. The combination of high import dependence, weak export capacity and the rand-loti peg creates structural pressure that prevents sustained growth.
LT: So what is your way forward in addressing these challenges now that you are in your very crucial position at the LNDC?
Khasipe: The Letsema strategy argues that we need to move away from simply trying to do the same things more efficiently.
For years, we believed the solution was better implementation, improved budgeting, fighting corruption and improving efficiency within the existing system. Those things are important, but they are not enough.
We distinguish between leadership that works in the system and leadership that works on the system. Our argument is that the system itself is structurally deficient, so unless we transform it, we will continue repeating the same cycle.
The real solution lies in increasing productive capacity. We must produce more of what we consume — food, energy, pharmaceuticals and other essentials.
We are not saying Lesotho should isolate itself from global trade. Trade is important. But we cannot continue importing nearly everything, including staple foods and products central to our national identity.
Take papa, our staple food. Most of the maize and wheat used to make it is imported. Even the Sesotho blanket and Seshoeshoe fabric associated with our culture are largely produced outside Lesotho.
So the strategy focuses first on strengthening domestic productive capacity. We want to produce more poultry, beef, wool, mohair, wheat and horticultural products locally. We also want to add value to products such as wool and mohair by manufacturing blankets and yarn domestically.
That is what we call the defensive part of the Letsema strategy — strengthening the foundations of the economy before moving into more sophisticated industries.
LT: Your ambitions are commendable, but given longstanding concerns from local manufacturers and farmers about imports, do you think this can realistically be implemented?
Khasipe: It is definitely a journey, but it begins with a mindset shift.
I actually disagree slightly with the idea that this has always been understood. Historically, we focused heavily on improving efficiency within the existing economic structure rather than questioning whether the structure itself was sustainable.
We concentrated on implementation, budgeting, civil service reforms and governance improvements, all of which matter. But we rarely stopped to ask whether we were fundamentally organised in the right direction economically.
I often use the analogy of travelling to Johannesburg while unknowingly driving toward Cape Town. You may be driving efficiently and following all the rules, but if you are headed in the wrong direction, efficiency alone will not help you reach your destination.
That is the distinction we are making. The challenge is not only about doing things better. It is about doing the right things.
LT: How does Letsema intend to unlock this transformation practically?
Khasipe: One of the biggest misconceptions in Lesotho is that we lack capital. In reality, there is significant liquidity within the economy.
Commercial banks, insurance companies and pension funds collect substantial amounts of money locally, but much of it flows to South Africa because investors argue there are not enough bankable projects in Lesotho.
So the challenge is not simply money. The challenge is creating a pipeline of viable, investable projects.
This is where LNDC wants to play a catalytic role. We want to identify projects, structure them properly, conduct financial modelling and package them into bankable investments that institutions can confidently finance.
When banks say they need bankable projects, they mean they need detailed evidence showing profitability, sustainability and proper management capacity.
LNDC therefore wants to become the architect of an ecosystem that connects investors, technical expertise and viable projects.
It is not only about financing. Skills and project execution capacity are equally important. Investors also want confidence in the people managing projects.
LT: How do you intend to build investor confidence while ensuring Basotho benefit meaningfully?
Khasipe: Foreign direct investment remains crucial for an economy as small and underdeveloped as ours. We need both external capital and expertise.
However, we also want to ensure Basotho benefit directly. That means deliberately matching foreign investors with local participation and empowerment opportunities.
Lesotho cannot afford growth that excludes its own people. Investments must create jobs, build local capabilities and strengthen domestic entrepreneurship.
LT: How has the LNDC positioned itself to tackle these challenges moving forward?
Khasipe: The strategy is built around four major outcomes over the next five years.
First, we want to create 50,000 new jobs.
Second, we want to establish five entirely new sectors in the economy to diversify away from overreliance on textiles, water and diamonds.
Third, we aim to develop 100 new Basotho industrialists employing more than 100 people each.
Fourth, we want to increase the complexity and value addition of what we produce. In textiles, for example, we want to move beyond low-value products into higher-end manufacturing for premium global brands.
Achieving this requires the LNDC itself to reinvent and strengthen its own capabilities.
LT: LNDC has long been viewed as central to economic transformation. What is key to ensuring it remains relevant?
Khasipe: The LNDC Act gives us a very deliberate mandate — to initiate, promote and facilitate industrial development in a manner calculated to raise employment and incomes in Lesotho.
That second part is extremely important. Industrialisation must directly improve livelihoods for Basotho.
If industries are growing elsewhere while Lesotho merely consumes imported products, then we are failing our mandate.
That is why the LNDC must act as a coordinator bringing together government, development partners, private sector players, financial institutions and even the media.
Economic transformation is a complex challenge. Unlike a complicated problem that comes with a manual, a complex problem requires collaboration, experimentation and continuous adaptation.
LT: Having worked at SACU, what opportunities is Lesotho underutilising within regional trade agreements?
Khasipe: SACU provides Lesotho with critical connectivity to regional and international markets.
Through SACU, Lesotho enjoys duty-free and quota-free access to markets in South Africa, Botswana, Namibia and Eswatini. We also benefit from trade agreements with the European Union and European Free Trade Association countries such as Switzerland and Norway.
The unfortunate reality is that Lesotho has not fully exploited these opportunities. We remain overly concentrated in textiles and apparel.
We need to diversify both what we produce and where we export. There are significant opportunities in agriculture, processed goods and higher value-added manufacturing.
At the same time, we must preserve and strengthen sectors where we already have comparative advantages.
LT: Any final message you wish to convey to Basotho?
Khasipe: The strategy is ambitious and implementation will not be easy. It also requires reforming LNDC itself so that the institution has the capacity to lead this transformation effectively.
But we are optimistic because we are embracing a collaborative and transformational leadership style focused on changing the system itself rather than merely operating within it.
Ultimately, the higher purpose of this strategy is not about LNDC receiving praise. It is about improving the standard of living of the Mosotho.
That is what motivates me every morning, even on difficult days. The purpose is bigger than any individual or institution. It is about creating a better future for Basotho.
