MASERU — Lesotho received a M131 million loan for private sector-led economic growth from the country assistance strategy (Cas) of the World Bank on Thursday. The funds are intended to prop programmes aimed at creating jobs by improving the business environment and increase diversification in new growth sectors like tourism and horticulture through private sector-led economic growth.
The Cas sets out a selective programme of Bank Group support linked to the country’s development strategy and based on the Bank Group’s comparative advantage in the context of donor activities. The programmes are aimed at reducing poverty by way of creating jobs and promoting shared prosperity.
World Bank country director for Lesotho Asad Alam said the funding will more specifically support steps to improve access to finance, help boost the income of small farmers and support growth of the tourism sector, as well as facilitating improvements by supporting regulatory reforms and efforts to streamline the processes for obtaining licenses and construction permits.
“These reforms will help promote the growth of private enterprises through creating a competitive business environment which is essential in attracting investment and creating new jobs that are essential for poverty reduction and promoting equity,” Alam said. Alam is the World bank’s regional director for Botswana, South Africa, Lesotho, Namibia and Swaziland.
Other improvements expected to be brought about by the fund include creation of an electronic portal for business licenses which will include an online database of all laws, regulations, tariffs and steps for all types of trade and industrial licenses. Smita Kuriakose World Bank Task Team Leader for this project pointed out that changes to credit requirements, such as allowing a diversified set of investments, including stocks and equipment, to serve as collateral for a loan, will increase the availability of credit to the unbanked population.
He said improving the business environment, particularly in new sectors with strong background linkages to the local economy would increase opportunities for creating new jobs. This was the second in a series of grants that the World Bank supported Lesotho with this year. The first, which amounted to about M200 million granted on June 3 was on supporting inclusive growth and competitiveness development policy.