Bid to ease doing business in Lesotho

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MASERU — The government is currently implementing reforms to make it easier for companies to set up businesses in Lesotho, Trade Ministry principal secretary Teleko Ramotšoari said on Tuesday.

Ramotšoari was speaking at a workshop that was organised to review the One-Stop Business Facilitation Centre (OBFC) which was introduced in 2007 to help improve the doing of business in Lesotho.

He said Lesotho urgently needed to implement effective reforms if it is to improve its business climate.

Ramotšoari said some of the reforms involved bringing different government ministries and the Lesotho Revenue Authority (LRA) together under the OBFC.

“Reform is a complex process which involves several departments and stakeholders and requires them to put their efforts together,” Ramotšoari said.

The OBFC, introduced in 2007, has seen some achievements to date after issuing out about 2 000 business licenses and 508 import permits through the system.

The Companies Act has also been signed into law to regulate the operations of companies and make it easier to set up businesses in the country.

However, participants at the Tuesday workshop agreed that Lesotho is still in need of major reforms especially after the country dropped rankings according to the 2011 Doing Business report.

Lesotho slumped to a lowly 138th position out of 183 countries in the Doing Business index which was released by the World Bank earlier this year.

Last year, the country was ranked at position 130.

The index is normally used by investors to gauge the economic competiveness of a country.

The report said Lesotho had failed to improve the business climate in the country and noted that the lack of business growth had contributed to Lesotho’s low GDP.

Lesotho has the second lowest GDP in the southern African region after Zimbabwe, according to the World Bank.

The focal point of Tuesday’s workshop was how to make it easier to set up business in Lesotho and remove barriers.

The workshop was also part of the trade ministry’s wider reform programmes aimed at improving the institutional and human resources sector of the OBFC established four years ago.

“The mandate of the one-stop shop is to bring together and deliver a streamlined and integrated suite of business services for international investors and local enterprises to improve the investment climate and the ease of doing business in Lesotho,” Ramotšoari said.

“These reforms are aimed at cutting the cost and time it takes to start a business in the country,” he added.

“Rwanda is the best because they don’t have many obstacles,” Ramotšoari said in reference to the East African country which is ranked as the second best performing economy globally.

Lesotho Chamber of Commerce and Industry president, Fako Hakane, said they expected a complete decentralisation of the one-stop facility.

“Information dissemination mechanisms have to be put in place (so) we all know what is happening. (At the moment) we are in the dark,” he added.

Lindiwe Sephomolo, from the Private Sector Foundation of Lesotho, said services offered by the OBFC should be available online.

“We have noted several problem areas including a lack of IT support and inconsistency in employee remuneration.

“These should be addressed. We would like to be in the OBFC decision-making, the government cannot advise itself,” she said.

Ramotšoari admitted there were challenges still facing business in Lesotho citing the OBFC Strategic Plan from 2009 which had indicated “a lack of clear institutional and human resource structures being a challenge to the efficient and effective performance”.

The participants also noted that the process of starting a business in Lesotho is a strenuous and costly one.

Special consultant Peter Zhangazha said Lesotho needed to develop a new statute and institutionalise OBFC as an agency with its own employees.

“The OBFC should make its own budget. It should ask for its own funding from the ministry, cost sharing is not workable,” he said.

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