Trade Hub Backs Lesotho to Validate Investor Roadmap
24 April 2012
In cooperation with the Lesotho National Development Corporation (LNDC), SATH launched the Lesotho Investor Roadmap with a stakeholder validation workshop to discuss the findings and recommendations.
The Roadmap is an analytic tool, a detailed prescriptive document and a catalyst for change which examines the individual procedures that represent the critical path to business start-up and operation, and creates a series of action plans to eliminate the red tape that inflates the cost of investments. The Roadmap is premised on the fact that outdated and cumbersome regulations deter investors and make it difficult for entrepreneurs to start and operate new businesses. Therefore, reducing the regulatory and administrative burdens on businesses is expected to lead to sustained economic growth and employment opportunities.
SATH facilitated a discussion of foreign direct investment (FDI) inflows to Lesotho as well as a comparison of international competitiveness indicators. Lesotho’s flows of investment are relatively low and declining owing to several factors, including the administrative impediments outlined in the Roadmap. With regards to the competitiveness indicators, it appeared that Lesotho’s ranking is declining, and the country is performing poorly compared to other FDI competitors.
The workshop provided a platform to identify and share examples of regional and global best practices in investment climate reform. Among the key reform examples presented was in Rwanda, where company registration and incorporation takes only two procedures and is complete within 24 hours. Several countries have instituted other measures that make it easier for business to thrive.
General observations were made that are common to the four process areas of the Roadmap (Employing, Reporting, Locating and Operating), identifying procedural transparency in Lesotho as a major concern. Most government agencies, with a few exceptions, do not have procedural guides and websites that inform potential investors of the legal requirements, submission requirements, time frames and costs of starting and operating a business. The workshop further discussed the critical and significant binding constraints on stimulating investment notably, access to land, access to credit, construction permits, visa issues, as well as work and residence permits.
Government and cooperating agencies, such as the Millennium Challenge Account (MCA), Private Sector Unit (PSU) and World Bank office, are supporting a number reforms aimed at improving the investment climate. However, participants raised concerns that these organizations and departments are working in silos and are thus not communicating their activities to the general public. The workshop participants concluded that there was need to coordinate all government reforms and identified the Roadmap process as a mechanism to achieve such coordination. The workshop recommended that a structure be established to spearhead the reform process, consolidate all reform processes in the country and identify reform priorities. Participants committed themselves to obtain support from the highest political and technical officers in their various organizations, departments and ministries in order to ensure the progressive implementation of the Roadmap recommendations.
SATH will continue to work closely with the LNDC and other national stakeholders on the implementation of the Roadmap and the overall reform process.
The Roadmap is an analytic tool, a detailed prescriptive document and a catalyst for change which examines the individual procedures that represent the critical path to business start-up and operation, and creates a series of action plans to eliminate the red tape that inflates the cost of investments. The Roadmap is premised on the fact that outdated and cumbersome regulations deter investors and make it difficult for entrepreneurs to start and operate new businesses. Therefore, reducing the regulatory and administrative burdens on businesses is expected to lead to sustained economic growth and employment opportunities.
SATH facilitated a discussion of foreign direct investment (FDI) inflows to Lesotho as well as a comparison of international competitiveness indicators. Lesotho’s flows of investment are relatively low and declining owing to several factors, including the administrative impediments outlined in the Roadmap. With regards to the competitiveness indicators, it appeared that Lesotho’s ranking is declining, and the country is performing poorly compared to other FDI competitors.
The workshop provided a platform to identify and share examples of regional and global best practices in investment climate reform. Among the key reform examples presented was in Rwanda, where company registration and incorporation takes only two procedures and is complete within 24 hours. Several countries have instituted other measures that make it easier for business to thrive.
General observations were made that are common to the four process areas of the Roadmap (Employing, Reporting, Locating and Operating), identifying procedural transparency in Lesotho as a major concern. Most government agencies, with a few exceptions, do not have procedural guides and websites that inform potential investors of the legal requirements, submission requirements, time frames and costs of starting and operating a business. The workshop further discussed the critical and significant binding constraints on stimulating investment notably, access to land, access to credit, construction permits, visa issues, as well as work and residence permits.
Government and cooperating agencies, such as the Millennium Challenge Account (MCA), Private Sector Unit (PSU) and World Bank office, are supporting a number reforms aimed at improving the investment climate. However, participants raised concerns that these organizations and departments are working in silos and are thus not communicating their activities to the general public. The workshop participants concluded that there was need to coordinate all government reforms and identified the Roadmap process as a mechanism to achieve such coordination. The workshop recommended that a structure be established to spearhead the reform process, consolidate all reform processes in the country and identify reform priorities. Participants committed themselves to obtain support from the highest political and technical officers in their various organizations, departments and ministries in order to ensure the progressive implementation of the Roadmap recommendations.
SATH will continue to work closely with the LNDC and other national stakeholders on the implementation of the Roadmap and the overall reform process.
Activities