Speech of The Honourable Minister Trade, Industry, Business Development
and Tourism at the Launch of the Competitiveness and Financial Inclusion
2nd May, 2023
The House is informed that the Competitiveness and Financial Inclusion Project
(CAFI Project) was successfully launched on 3rd April 2023, and that project
implementation has commenced in earnest. The CAFI Project is a successor to the
Private Sector Competitiveness and Economic Diversification Project (PSC Project)
which closed in June, 2022.
The CAFI Project is finance by the World Bank and coordinated by the Ministry of
Trade, Industry, Business Development and Tourism. The project aims to increase
access to business support services and financial products targeted at MSMEs and
Entrepreneurs, especially women and youth. While the focus of the previous
project was on attracting Foreign Direct Investment, the focus of the CAFI Project
is more towards building the local private sector.
Ladies and Gentlemen,
We consider the previous PSC Project to be a true success story. The project
made significant strides in many areas of investment climate reforms and economic
diversification in line with Key Performance Area I of the Second National
Strategic Development Plan: Enhancing Inclusive and Sustainable Economic Growth
and Private Sector Led Job Creation. The CAFI Project is therefore building on a
solid foundation laid by the previous project.
The CAFI Project is also fully aligned the tenure of this House within which the
Project is expected to deliver tangible results:
1) The project is already working with the Ministry of Information,
Communication, Technology and Innovation and other key stakeholders in
the following areas to improve service delivery:
a) Upgrading of technology to enhance the functionality, sustainability,
and inter-operability of key Government-to-Business (G2B) systems
including business registration and licensing, construction permitting,
land administration, trade facilitation (customs and national single
window), and cross-border transport and transit operations.
b) Development of a G2B systems interoperability framework with
institutional agreements and architecture for secure data exchange
between different agencies including OBFC, RSL, MCC LAA and CBL.
c) Implementations of a government payment gateway as a step toward
implementation of a cashless payment system within government.
The days when government systems were not speaking to each other belongs in
the past. The costs of this silo operations to both government and private sector is
immeasurable. For the first time in the history of government services, the Ministry
of Communications, Science, Technology and Innovation will lead efforts to address
this matter once and for all.
2) The Project has also partnered with the Ministry of Finance and
Development Planning, and the Central Bank of Lesotho to strengthen the
credit infrastructure systems and improve access to finance through
development of innovative financial products and instruments targeting
MSMEs, with particular focus on women and youth.
3) The CAFI Project is also working with the Ministry of Finance and
Development Planning, and the Disaster Management Authority to
strengthen the Resilience of MSMEs to Climatic Disasters and Shocks through:
Development of Disaster Risk Financing Policy; establishment a MSMEs
financial resilience fund; and procurement of sovereign insurance to protect
MSMEs from shocks.
4) The Project will also enhance the entrepreneurship ecosystem and improve
access to early-stage financing for youth and women owned innovative
businesses through establishment an entrepreneurship hub and seed
financing facility in Maseru. The Hub will capacitate up to 15 Enterprise
Support Organisation who will in turn incubate a total of 500 innovative
youth and women owned enterprises. A call for expression of interest for
the Enterprise Support Organisation has already advertised and the hub
will be fully operational during the second half of 2023.
5) The Project is also financing a Matching Grant Program – the Lesotho
Enterprise Assistance Program (LEAP) to help MSMEs to expand their
operations and diversify their product. The grants will also support skills
enhancement programs developed jointly by the private sector and public
or private training providers. These programs will target technical,
supervisory and management skills in export sector and high potential
sectors including digital delivery mechanisms such as digital platforms and
selected equipment on a cost-sharing basis. The LEAP program commenced
on 24 April, 2023 and all Lesotho enterprises are free to apply for
6) CAFI Project will support SME participation in High Potential Value Chains
namely, Horticulture and the Textiles and Garment industry.
The Project is already working with the Ministry of Agriculture, Food Security to
expand commercial fruit farming initiative in order to establish a fully-fledged
fruit industry in Lesotho in collaboration with key partners including, among others,
the Ministry of Agriculture, Food Security and Nutrition; The India, Brazil and South
Africa Fund for Poverty and Hunger Alleviation (IBSA Fund) administered by the
UNDP; Lesotho Nation Farmers Union (LENAFU); the National University of Lesotho;
Stellenbosch University and other strategic partners.
The government has specifically partnered with the National University of Lesotho
and the Stellenbosch University to create a Horticulture Incubation and Training
Centre in Mahobong. The IBSA Fund on the other hand has committed resources
to help Lesotho to be a significant player in global horticulture value chains. In all
these, we thank the governments of South Africa, India and Brazil for their
generous support. A competitive selection process for participating farmers has
been completed and 75 will be recruited into a pre-incubation pragramme this
I am also happy to announce that the Horticulture Incubation and Training Centre
will be officially launched tomorrow (3rd May) in Mahobong where the 75 selected
farmers will be publicly announced.
The Ministry of Trade, Industry, Business Development and Tourism has over the
years created several new industries. Textile and Garment industry is one of the
biggest beneficiaries of government support. CAFI is designed to revitalize and
transform our ailing textile industry to make it globally competitive. We have seen
significant job losses and investors closing shop in Lesotho to relocate to other more
attractive investment destinations. This realisation compelled us to partner with the
International Labour Organisation and the International Trade Centre to find ways
of maintaining and increasing Lesotho’s participation in the textile and apparel
The need for an inclusive and resilient economy has indeed necessitated the need
for CAFI Project.
The World Bank has supported various private sector initiatives in this country, and
this is by far the biggest intervention towards creating a competitive private sector
in Lesotho. Our partnership with the Bank will continue to grow from strength to
strength as we jointly implement this noble initiative.
As we implement this project, will we concurrently be reviewing Lesotho’s
Investment regime. The outcome of the process will be an enabling investment
policy and legal framework that will improve investor confidence and make
Lesotho an attractive investment destination in the subregion.