Investment Policy Review of Lesotho

Lesotho had surpassed most LDCs in attracting 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 neighbour, 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
  • Addressing infrastructure constraints
  • Strengthening FDI promotion and facilitation.

In 2013, at the request of the Government and in cooperation with UNDP, UNCTAD assessed the implementation of the IPR recommendations. Overall, the report showed that progress in implementing the suggested reforms was mixed. In some areas, such as the mining regime, companies act and environmental issues, progress is significant. In several other areas, reforms are yet to be undertaken.

Since the IPR was published, UNCTAD has assisted the Government by:

  • delivering a training course on good governance in investment promotion and facilitation, which included the development of a client charter and customer service training for the IPA
  • drafting the national investment policy
  • developing a set of policy recommendations to improve the business environment.

Other reports: Report on the Implementation of the Investment Policy Review: Lesotho