Seithati Motsoeneng
THE absence of comprehensive investment laws continues to hinder Lesotho’s ability to attract a wider pool of investors, the Competitiveness and Financial Inclusion Managing Director, Chaba Mokuku, has said.
Speaking on Lesotho’s Investment Climate Action Plan yesterday in Maseru, Mr Mokuku said the country was competing directly with other nations for investment and therefore needed to create an enabling environment in which the private sector could thrive.
He said Lesotho ranked among the lowest in the Southern African Development Community (SADC) in terms of investment climate.
“The SADC region uses an investment index to measure how conducive countries are for business. Most SADC countries score around two, which indicates a relatively enabling environment,” Mr Mokuku said.
“Lesotho, however, scores approximately four on average, meaning the business environment is more difficult compared to the regional average.”
He attributed the poor ranking largely to the absence of clear laws governing investments, saying investors preferred predictable legal frameworks that clearly defined and protected their rights and obligations.
“A business law and investment policy that clearly stipulate the rights and obligations of both parties are essential.
“Such laws also specify procedures for resolving disputes between investors and government.”
Mr Mokuku said establishing a robust legal framework would encourage investment and strengthen promotion efforts, adding that there was an urgent need to fast-track the enactment of the laws.
He further highlighted that current business licensing and registration regulations had created bottlenecks that discouraged private sector investment.
“Lesotho currently restricts access to as many as 53 business sectors for foreign investors.
“When restrictions are viewed as too stringent, investors often move to countries with more enabling business environments.”
Mr Mokuku also called for the review of immigration laws to ensure that incoming investors contributed meaningfully to the economy instead of competing with local micro and small enterprises (MSEs).
“The immigration law needs to be revitalised to ensure incoming individuals contribute positively to the economy rather than compete directly with local MSEs,” he said.
For his part, Prime Minister Sam Matekane stressed the need to accelerate the approval of the investment policy and related legislation, including amendments to business registration, licensing, work permits, residency permits, and the establishment of a one-stop shop for construction permits and horticulture foreign direct investment (FDI).
“The investment policy must be submitted to Cabinet for approval without delay. Two drafts have already been consolidated,” Mr Matekane said.
“I expect a Cabinet submission within two weeks, followed by the enactment of the investment law within a defined timeframe.”
Minister of Trade, Industry and Business Development, Motlatsi Maqelepo, confirmed that the investment policy and law were still pending, describing them as critical for transparency, predictability, and investor confidence.
Mr Maqelepo said his ministry was committed to concluding the process promptly and also underscored the importance of finalising the Micro and Small Enterprise (MSE) policy to enable Basotho entrepreneurs to participate meaningfully in the economy.
However, Thabo Steven Monyamane, a board member of the Lesotho Chamber of Commerce and Industry, expressed reservations about fully opening the economy to foreign investors.
Mr Monyamane argued that restrictions protecting Basotho-owned businesses should remain in place.
“What business does an investor bringing only M1 million into the country have?” he asked.
He urged stakeholders to ensure regulations continued to limit foreign participation in small businesses reserved for Basotho entrepreneurs.
Mr Monyamane added that despite the absence of an investment law between 2000 and 2005, many Basotho businesses had still managed to thrive.
“I am not saying we should not fast-track the laws — we should. But at the centre of it, there must be a clear definition of what success looks like. We need to define success in terms of maloti and cents, as well as the number of jobs created, to truly understand the future we are building.”
