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Ditch cumbersome laws

by Lesotho Times

LESOTHO this year slumped to position 130 out of 183 countries in the “ease of doing business” survey carried out by the World Bank.

Last year the country was ranked a lowly 128.

The report confirms what we have known all along — that Lesotho still has a raft of laws and regulations that are extremely hostile to business.

The Private Sector Foundation of Lesotho has raised similar concerns in the past.

Businessmen who have tried to invest in Lesotho have also complained about the frustrating bureaucracy encountered when trying to set up projects here.

We hope the relevant government ministries will take note of these concerns and seek ways to remedy the situation.

In the wake of the World Bank report it is important that we engage in serious introspection on what needs to be done to improve the business environment.

The international finance institution called on the government to create an enabling environment for the private sector to thrive.

As the Bank rightly pointed out we cannot understand why it should, for instance, take 40 days to register a company in Lesotho.

In South Africa it takes about 21 days at most to register a company.

Why should it be a battle to register a company in Lesotho?

Entrepreneurs in Lesotho go through a cumbersome process to register a business.

First they need to find a legal practitioner to prepare all documents and register the company at the Deeds Office.

They have to have a land lease stamped and pay the stamp duty.

Next they need to secure a public health inspector from the council to inspect the business premises.

They also need to apply for a trading licence and register for taxes.

The sixth step is to file for a workman’s compensation with an insurance firm with the last step being to request for a post office box or private box.

The World Bank in its report said the “procedures are so burdensome that entrepreneurs may have to bribe officials to speed up the process”.

The government must dismantle these cumbersome procedures if the dream of creating a conducive environment for business is to be achieved.

The government needs to pursue business-friendly policies that encourage the growth of the private sector.

Lesotho is in dire need of private investment to create jobs for the hundreds of thousands of young Basotho who are without jobs.

But bizarrely Lesotho still behaves as if the world owes it a living.

The country needs to move away from this mindset if we are to realise our developmental goals.

In one of our previous editorials, for instance, we urged the government to ditch the two-tier system of work permits and residence permits for foreign investors.

In neighbouring South Africa the department of home affairs issues a single work permit that also serves as a residence permit.

A similar arrangement should certainly suffice here.

With the vast untapped potential in the tourism sector Lesotho could easily become the “Malaysia of Africa”.

But we can only realise that goal if we repeal archaic laws and dismantle restrictions that hamper the development of the private sector.

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