Lesotho Country Profile

The overall goal of the United States Agency for International Development (USAID) Southern Africa Trade Hub (SATH) is to increase international competitiveness, intra-regional trade and food security in the Southern Africa region. With a team of long term regional and international experts based in Gaborone, Botswana, SATH delivers targeted technical assistance to governments, the private sector and civil society organizations in support of advancing regional integration and increasing the trade capacity of selected value chains within Southern Africa.

While the majority of SATH's activities are regional in nature, some activities specifically target Lesotho as a direct beneficiary. Through various regional and cross-cutting initiatives, SATH is working with Lesotho to reduce the costs of doing business, improve the investment climate, facilitate customs connectivity, and increase investment and trade in textile and apparel. Lesotho also stands to benefit significantly from SATH's support for regional integration through the Southern African Development Community (SADC) and our work on the implementation of the United States (US)-Southern African Customs Union (SACU) Trade, Investment and Development and Cooperation Agreement (TIDCA).

SATH will be piloting a Regional Customs Connectivity program in July 2012 based on a Microsoft Cloud Computing platform. While the program is being piloted between Botswana and Namibia, Lesotho has participated in the program as an observer with a view to joining the pilot after the initial stages. This program presents substantial potential to reduce the costs and time of doing business and trading across borders.

Customs Modernization: In May 2012, SATH received funding through USAID's Trade Facilitation Partnership to support the Lesotho Revenue Authority (LRA) in implementing its preferred trader program. The funding will assist the LRA across a range of areas including the development of pre-arrival customs processing guidelines and the mechanisms for implementa-tion. This activity will commence with a scoping exercise in June 2012.

Lesotho Investor Roadmap: Developed over the course of the past year, the Roadmap is a tool to support government efforts in undertaking critical reforms that can spur investment. The Roadmap examines the individual procedures that represent the critical path to business startup and operations and creates an action plan to eliminate the red tape that imposes avoidable costs on investments. The Roadmap was presented to stakeholders in March 2012 and SATH will be working with the Lesotho National Development Corporation (LNDC) and Lesotho's One Stop Business Facilitation Center to implement the agreed action plan.

Diagnostic Trade and Integration Study (DTIS) Update: An initiative of the Enhanced Integrated Framework (EIF), the DTIS evaluates internal and external constraints to a country's integration with the world economy and recommends where technical assistance and policy actions can help the country overcome these barriers. Lesotho completed its initial DTIS in 2004 and, in 2010, initiated the process to develop the update. SATH has just completed the DTIS update for in-country validation prior to the final presentation of the action matrix which is planned for July 2012.

Textile and Apparel: As one of the regions predominant garment exporters, Lesotho benefits from SATH's regional activities in this sector. Lesotho firms will participate in the "SOURCE Africa 2013" trade show, which will bring together regional producers and regional and international buyers. SATH is currently completing an opportunity analysis for the textile and garment sector in Lesotho which will then be used to help the LNDC attract additional value chain investments. Based on the results of this study and from previous consultations, SATH efforts will be focused on attracting a knit mill to Lesotho with the potential for supplying not only Lesotho's industry, but also regional manufacturers.

Effective Implementation of Regional Trade Agreements: As a member of both SADC and SACU, Lesotho benefits from SATH's work to ensure the effective implementation of regional trade agreements. SATH is currently engaged in a study with the SACU Secretariat to identify constraints to expanded SACU exports to the US under the TIDCA. A capacity building program to address identified obstacles in the SACU Member States will be developed.