LESOTHO finally signed the African Union (AU) agreement for the establishment of the African Continental Free Trade Area (CFTA) which is aimed at fostering free trade and boosting economic growth on the continent.
Foreign Affairs and International Relations minister, Lesego Makgothi, signed on behalf of Lesotho during the African Union Heads of State Summit in Nouakchott, Mauritania on Sunday. This brings to 49 the number of African countries that have signed the agreement that will see the creation of the world’s biggest free trade area.
Lesotho had initially refrained from signing the CFTA agreement when other countries signed at the AU Extraordinary Session on the African Continental Free Trade Area in Rwanda in March this year.
This was because there were fears that if Lesotho felt that joined the CFTA, this could affect its long-standing membership of the Southern African Customs Union (SACU). SACU is one of the world’s oldest customs unions and it consists of Botswana, Lesotho, Namibia, South Africa and Swaziland.
Mr Makgothi recently told the Sunday Express that the fears that joining the CFTA would affect Lesotho’s standing in the SACU were unfounded, adding that the agreement would allow Lesotho to have full trade relations with all African countries as was the case with SACU.
He said the CFTA would enable Lesotho to trade with all African countries without any restrictions.
“The main objectives of the CFTA are to create a single continental market for goods and services, with free movement of business persons and investments as well as to pave the way for the establishment of the African customs union,” Mr Makgothi said yesterday.
“We were restricted because we could trade within the southern African region but the CFTA will allow us to trade in all African countries.
“With the CFTA, Lesotho’s exports will not be subjected to customs and other excise duties and that will make the export processes smoother.
“The CFTA will also help Lesotho to evaluate where its products stand in relation to other countries in Africa.”
Mr Makhothi further said that Lesotho would broaden its economic sector to boost its product range for export.
“The only resources we are currently exporting are water and textiles but we will work hard to ensure that Lesotho has more products and services to export.”
He said among other things, Lesotho would also process its wool and mohair locally so that it would fetch higher prices on the international markets.