‘Dynamic private sector key to economic growth’

MASERU — The principal secretary in the Ministry of Trade and Industry, Co-operatives and Marketing, Teleko Ramotšoari, has said a dynamic private sector holds the key to Lesotho’s economic growth.
Ramotšoari made the remarks at a press conference held last Friday to brief the media on progress in implementing the private sector competitiveness and economic diversification project.
“A dynamic private sector is important to economic growth and job creation in Lesotho, and can help us in diversifying sources of revenue,” Ramotšoari said.
Ramotšoari said the key objective of the five-year US$10.5 million project was to facilitate and stimulate the growth of the private sector which the government says is the engine for economic growth.
“There is a need to improve the business climate in the country and diversification of export markets.
“Some of these measures have already been implemented and we are still in the process of further improving the business climate in Lesotho,” Ramotšoari said.
The private sector competitiveness and economic diversification project was launched in 2007 and is expected to run until 2012. It is financed by the government of Lesotho and the International Development Association (IDA), an affiliate of the World Bank that helps developing countries.
The IDA provides long-term, interest-free loans to the world’s poorest nations the majority of which are in Africa.
Chaba Mokuku, the project manager at the private sector competitiveness and economic diversification, told the media briefing that they were working flat out to improve the business environment in Lesotho.
“Through the project we (have embarked on ways) to improve the business environment in the country, for the growth and development of the private sector,” Mokuku said.
Mokuku said the biggest challenge for small, micro and medium enterprises was access to finance and the weak regional business linkages with economic powerhouse South Africa.
He however said the introduction of a credit guarantee facility would help solve the problem of finance.
“There is M50 million that has been allocated to the credit guarantee facility which will make it easier for the SMMEs to have start-up capital,” he said.
Mokuku said they were happy with the introduction of a one-stop business facilitation centre which was introduced in 2007 which had helped significantly reduce the cost of doing business in Lesotho.
Business leaders say the new centre had significantly reduced the time it takes to obtain trading licences, export certificates and other permits for investors.
“It used to take between 30 and 35 days to register a business, but that time has been reduced to around five days. This has contributed to improving the business environment,” Mokuku said.
The government had also simplified the registration of companies at the Law Office, he said.
Before the new measures were implemented it was a nightmare to register a company in Lesotho and put off foreign investors who wanted to set up businesses in the country.
Mokuku said the project was in the process of pushing for the adoption of a Leasing Bill to make it easier for small local leasing companies to work with those in South Africa.
He said there was need to increase market links between Lesotho and those in South Africa and the United Kingdom.
For example, Mokuku said the project was currently conducting research in partnership with local horticulture farmers to improve production for domestic and export markets.
“We are currently in the process of identifying varieties of horticultural products that can give the best yield for both the export and domestic markets,” said Mokuku.
He said they were also in the process of conducting research on production of organic products to help tap into the high-premium markets.