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Map
of Lesotho |
 Limited edition stamps
were issued to commemorate the inauguration of Katse Dam, one of the
world’s largest man-made lakes. The stamps symbolize the regional
and international co-operation, which saw the project through to a
spectacular conclusion. They also bear witness to outstanding
contributions from labour and the private sector and how, through
harnessing their specialist skills, the landscape, as depicted her,
was transformed in a matter of only 16 years.
Valuation and Pricing
The Government uses internationally accepted methodologies to determine
an initial offering price for State Owned Enterprises (SOEs). Valuations
are conducted by a certified and experienced party. These do not
constitute a non-negotiable “sales price” for any SOE, but rather serve
as a basis for negotiation in the context of other economic factors and
bidding guidelines. |
An
Attractive Investment Location
 Lesotho is small open economy and an outstanding location for export
oriented manufacturing industries. Over 50 foreign companies have
established manufacturing bases in the Mountain Kingdom and successfully
serve a wide variety of world markets. During the last decade
considerable economic growth has taken place through the adoption of
policies based on encouraging export-oriented industry and by creating
an environment conducive to private sector investment. Real GDP growth
in 1997 was 3.5%. In 1996,1995 and 1994 the GDP figures were 12.7%, 9%
and 13% respectively.
GDP Growth
The engine of economic growth has been the industrial sector with its
share of GDP accounting for approximately 32% in 1998. While some of the
growth is attributable to the implementation of the Lesotho Highlands
Water Project, there has been impressive growth in the manufacturing
sector whose share of GDP grew from 6.6% in 1990 to 17% in 1998.
Manufacturing Growth
The Kingdom is member of the Lomè Convention and is granted quota and
duty-free access to EU markets. Trade concessions are also granted by
the USA under the Generalized System of Preferences (GSP). Other
preferential trade agreements have been entered into with the Southern
African Development Community (SADC), Western European countries outside
the EU, Nordic Countries, Japan and the Southern and East African
Preferential Trade area (PTA) countries.
Lesotho is an active member of the Southern African Development
Community (SADC), which has a population of 138 million, and since 1996,
Lesotho has chaired the Water Sector. Southern Africa and South Africa
in particular exert a major influence over the socio-economic and
political developments in Lesotho. The Southern African Customs Union (SACU)
absorbs some 49% of the country’s exports to Africa. South Africa
accounts for 50% of this amount. Over 80% of the country’s imports are
from SACU markets.
In addition a substantial component of Lesotho’s labour force works in
South Africa and developments in South Africa’s mining industry
therefore are of crucial importance. Income earned on South African
mines accounts for 45% of GNP and contributes between 45% and 55% of
receipts on the external account.
Quality of Life
Lesotho offers a temperate climate, an abundance of unpolluted water,
pleasant living conditions and excellent recreational opportunities. The
capital Maseru provides the convenience o modern living, international
banking, and excellent international hotels as well as recreational
facilities such as golf, tennis and squash.
Often referred to as the Mountain Kingdom, Lesotho is also on the
doorstep of southern Africa’s highest mountain range, the Maluti, which
caters to mountaineers, trout fishers and eco-tourists. The Maluti also
provide a spectacular backdrop for pony trekking, a pastime for which
Lesotho has achieved world renown.
Infrastructure
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 For
much of the first half of this century, approximately 75% of Lesotho
was inaccessible due to inhospitable mountainous terrain. During
that time sure-footed horses burdened with goods and people picked
their way along bridle paths and light aircraft landed on grazing
fields. Improved physical infrastructure has brought greater volumes
of trade, increased tourism and sheer convenience. Modern day
Lesotho boasts a significantly improved road network and domestic
air service, which provides swift and efficient transport.Although transport facilities have been upgraded on an ongoing basis, an
intensity of construction activity has been seen especially in the
infrastructural development associated with the huge Highlands Water
Project. With investment flowing into Lesotho in the wake of this
project, new roads, bridges, schools and industrial areas are
transforming the country. The constructions of feeder roads, and
pedestrian or livestock crossing, are included in the infrastructure
programme. |
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Water Resources |
 Lesotho
has been one of the first countries to benefit from regional
cooperation in southern Africa. Blessed with abundant water
resources, its scenic highlands are home to one of the largest
infrastructure projects in sub-Saharan Africa, the Lesotho
Highlands Water Project. Inaugurated by King Letsie III and
President Mandela in January 1998, the project will generate
substantial income flows while serving as a major water source
for the industrial heartland of South Africa.
Power Generation
Lesotho is no longer dependent on South Africa for its electricity
needs. A hydro-electric power station at Muela in the north of the
country commenced operation during January 1999. Situated midway between
Katse Dam and the transfer tunnels to South Africa, the power station
has enhanced Lesotho’s ability to provide ‘clean’ energy for industrial
and commercial purposes. |
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Competitive Environment
Lesotho offers investors
a highly competitive environment, which is conducive to productivity.
Some of the advantages offered by the Mountain Kingdom include:
A literate English speaking labour force, which has established a
reputation for high productivity at competitive wage rates.
A 50% skills training grant.
100% foreign ownership allowed.
Concessional loans and /or equity participation facility.
Preferential access to developed country markets including the Lomè
Convention signatories and the Generalized System of Preferences and
access to North America, Japanese, Nordic and other developed countries.
Excellent infrastructure and close proximity to SADC’s major markets.
A low corporate tax rate (15%) for manufacturing companies with no
secondary or withholding taxes on dividends.
Free repatriation of profits.
Double taxation agreements with South
Africa and Mauritius.
Sales tax exemption on machinery and equipment for manufacturing
industries and raw materials for export production may be imported
duty-free.
Labour Availability
People are Lesotho’s most important natural resource: they are diligent
and adaptable, and live within easy reach of where they work, a factor,
which encourages low absenteeism and punctuality. They are quality
conscious and easily trainable.
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Labour Quality |
 At 75%, Lesotho’s literacy rate is the second highest in Africa and
Basotho workers are quality conscious and easily trainable. More
importantly, English is taught in all schools from pre-school upwards.
Each year 40 000 pupils enter high school and 600 students qualify at
the National University of Lesotho. The country also has three
vocational training institutes, which produce a wide range of skilled
technicians and craftsmen.Lesotho’s labour cost is competitive by world standards and is
considerably lower than in neighbouring South Africa.
Basic minimum wages
are fixed annually and reviewed by the Statutory Wages Advisory
Board on the basis of macro-economic indicators. The Board is
composed of representation from Government, private sector employers
and employees (mainly trade unions). |
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