A new policy to drive industrialisation in Lesotho was launched in Maseru this week. The Lesotho National Industrialisation Policy 2024–2028 is being spearheaded by the Ministry of Trade.
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The ministry says the policy seeks to accelerate economic diversification in the industrial base, enhance productivity and productive capacity for industrialisation and advance domestic and regional value chains for industrialisation.
It also seeks to promote and develop industrial clustering, promote inclusive industrialisation, support entrepreneurship development and strengthen business linkages.
The new policy will also seek to enhance energy efficiency and sustainability, promoting technology adoption and innovation, services-based industrialisation, and stimulating agro-based industrialisation.
This is not the first time Lesotho has launched an industrialisation policy. Previous policies have all failed.
The first attempt was the 2015–2017 industrial policy, whose aim was to accelerate the industrialisation agenda and address key challenges facing the country.
The second one was the 2018–2023 policy, which after its unsuccessful execution during the three years of implementation, the government extended it to the National Strategic Development Plan Strategic Focus (2023/24-2027/28).
The new industrial policy’s target is set to activate implementation on innovation to enhance the efficiency and competitiveness of domestic industries, create decent jobs and improve the welfare of Basotho.
Thabo Moleko, the Ministry of Trade Principal Secretary, said the implementation of the new policy is set to deepen economic growth, promote industrialisation and enhance competitiveness.
“The plan includes greater investment in industrial development with the intention to create employment and incomes while building on maintaining the existing industrial trade,” Moleko said.
Mamello Nchake, a consultant for the United Nations Economic Commission of Africa (UNECA), said the development goals of the industrial policy are set to ensure an achievable inclusiveness and equitable growth as they aim to create sector-led quality jobs for Basotho.
Nchake said the goals are meant to “develop and maintain enabled infrastructure that is critical to the private sectors and also to promote gender equality, environmental and climate risk management”.
“Moreover, the policy (will seek to) harness the collaboration with private sector firms to address common challenges and promote industrialisation,” she said.
The workshop discussed constraints that hindered the implementation of the 2018 – 2023 policy that undermined investment and trade opportunities.
The constraints include access to land for investment, inadequate provision of infrastructure, an outdated and a lack of appropriate regulatory environment, low productive capacity, market size and topological constraints, unstable macroeconomic environment, external factors, and over-dependency of trade preferences.
To address the strategic objectives, the previous industrial policies had proposed tax incentives for industrial development, trade policy and regional integration as the main vehicle for industrialisation and structural transformation.
They had also proposed mechanisms for policy coordination and implementation, institutional alignment and linkages.
However, several key challenges were identified in the implementation of the 2015-2017 industrial policy.
They included limited financial and investment capacity to effectively implement the industrial policy actions.
“Financing instruments are not aligned with the level of development needs of the private sector,” stakeholders heard at the workshop.
They also heard that there is “persistent dependency on few industries that poses risks in the face of global economic uncertainties and ever-changing consumer preferences”.
Another identified problem is limited investment climate that makes it costly for foreign firms to invest in Lesotho.
It was also observed that a shortage of specialised education and skills crucial for growth of industries impact the ability of firms to adopt advanced technologies and improve productivity and the productive capacity.
Stakeholders also heard that there is limited global competitiveness and access to global markets.
Lesotho’s industries, they heard, particularly textiles and garments, face competition from other low-cost manufacturing countries.
The country is also spooked by poor coordination between the implementing agencies due to a lack of a clear implementation framework.
Khahliso ’Molaoa
