MASERU – Lesotho will get more aid from Ireland to help Basotho entrepreneurs diversify their products on the international markets under a pact signed on Monday.
The memorandum of understanding was signed by Finance Minister Timothy Thahane and Ireland Ambassador Gerry Garvin.
Lesotho has for over 10 years struggled to diversify its products and markets despite repeated calls by the government.
The Central Bank of Lesotho’s economy review says 91 percent of Lesotho’s exports, which are mainly textile products, are destined to the United States market under the Africa Growth Opportunity Act (Agoa) provision which will expire in 2015.
AGOA gives African countries a right to export all their products except arms to the vast United States market without tariffs.
The agreement with the Irish government is expected to help Basotho diversify their products on the foreign market.
Speaking at the signing ceremony Thahane said Ireland has pledged its support to Lesotho in financial management, construction, and volunteer training in addition to sectors the country has been benefiting under bilateral ties since the early 1970s.
“Despite being hit by the current economic recession Ireland has chosen Lesotho as one of its focus areas of assistance in Africa,” Thahane said.
“They have not forgotten the poor developing countries.”
Thahane said the Irish government was supporting Lesotho’s economic growth initiatives through the World Bank’s fast initiative programme.
Speaking at the same occasion, Ambassador Garvin said the Irish government was committed to helping sub-Saharan countries to grow their economies.
“We are proud of the ties we have made with them,” he said.
The signing comes three months after Trade Minister Leketekete Ketso emphasised the importance of diversifying products and markets.
Ketso pledged to parliament that he would intensify the search for new markets and diversify products so that Lesotho will not depend entirely on textile exports to the United States during the current financial year.
He said he hoped to increase economic integration and market access in the global economy.
“It is dangerous that Lesotho’s economy is almost entirely dependent on the money made in the textile industry,” Ketso said.
He told the august House that the US market is likely to shut doors on Lesotho by 2015 when the African Growth Opportunity Act, expires.
“We depend too much on access to the American market which will expire in 2015.
“If we cannot take this chance to diversify and establish markets now we will find ourselves in trouble when the AGOA facility expires,” Ketso said.
Lesotho was in trade negotiations to attain enhanced market access under Sadc, Sacu, India Free Trade Area, trade agreement between Sacu and the US and the EU-ACP Economic Partnership Agreements.