Lesotho had surpassed most LDCs in attracting foreign direct investment (FDI), predominantly export-oriented, and in significant amounts to the apparel industry, which had generated employment and foreign exchange.

However, this FDI was dependent on temporary trade privileges, and Lesotho had to face the challenge of full global competition once those trade privileges were to expire.

The IPR recommended a strategy to retain existing investors and diversify investment.

Key actions included:

• Developing a competitive base for manufacturing FDI.

• Exploiting more fully complementarities with Lesotho's neighbor, South Africa .

• Improving access to other large markets.

• Building up the country´s own capabilities in manufacturing, services and agriculture.

• Fine-tuning the investment framework.

• Raising workers´ productivity.

• Strengthening local entrepreneurship

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