PRIME MINISTER Thomas Thabane says Lesotho is open for business and reassured foreign and local investors that the government will uphold the principles of transparency and good governance to protect such investments.
Dr Thabane said this in a recent address at the World Economic Forum in Geneva, Switzerland.
He said that his government welcomed foreign direct investment in all sectors of the economy.
“Lesotho is open for business and as a landlocked country, investment is not an option but a must for our sustainable economic growth,” Dr Thabane said.
“Private business activity, investment and innovation are the major drivers of productivity and job creation.
“We are therefore open for foreign direct investment (FDI) in major sectors of the economy. It is the government policy that, once established, the principle of transparency and inclusiveness is afforded for foreign as well as national investors.”
Dr Thabane further said that his government was well aware of the fact that the rule of law and good governance were essential prerequisites for any investment as investors required a safe environment to thrive.
He said as a consequence, his government had embarked on multi-sector reforms to achieve lasting peace and stability.
“We are now embarking on comprehensive national reforms under the auspices of the Southern African Development Community (SADC), which will among other things, enhance our institutional and regulatory frameworks to bring stability and create a conducive environment for investment to flourish,” Dr Thabane said.
This was in reference to the constitutional, security sector, judicial, media, governance reforms that were recommended by SADC in 2016. SADC gave Lesotho until May 2019 to have fully implemented constitutional and security sector reforms.
The Thabane administration has been in power since the 3 June 2017 elections.
Early this year, Finance Minister Moeketsi Majoro told the Sunday Express’ sister Lesotho Times publication that although the government had made great strides to restoring peace and stability, attracting foreign direct investment remained a major challenge.
Dr Majoro said while the advent of the four-party coalition government in 2017 had been welcomed by the international community as an important milestone in the restoration of the rule of law in Lesotho following a period of widespread impunity and instability from 2015 to 2017, investors had nonetheless continued to sit on the fence.
The advent of the new government ended the impunity and instability manifested in the commission of serious crimes by senior military officials. These included the assassination of former army commander Lieutenant General Maaparankoe Mahao and many other ordinary civilians.
And while the new government has ushered relative stability, Dr Majoro said investors remain doubtful of its ability to last the distance.
“We have been in power for several months and we realise that restoring investor confidence is going to take longer than we thought. I didn’t know this at the beginning and I just thought things would revert to normal like switching on a light.
“The first thing that happened when we came in was the investors saying, ‘it is great that you are here and things have changed. We are no longer fearful and that’s good. But are you really going to survive the next five years?’ So now it becomes a situation where they say, ‘we will watch you. Let’s wait and see before we put our money in’.
“This (fence-sitting by the investors) is what we are currently experiencing. I had informal discussions with some investors and they said that the change of government was powerful but for them to dig into their pockets, they need guarantees that the government will survive for five years. So, they are saying, ‘demonstrate to us before we do anything’,” Dr Majoro said.
Dr Majoro conceded that investors were well within their rights to be cautious and demand guarantees of stability because it was the duty of any government to demonstrate that it was stable and it could guarantee the safety of investments.
“It is going to take a lot more work from us politicians to provide guarantees that we will in fact survive the five years and that we are committed to providing peace and macroeconomic stability,” Dr Majoro added.
And in his recent World Economic Forum address, Dr Thabane said the government was prioritising the Investment Climate Reform Agenda to promote business activity in Lesotho.
He said this was being done through updating the legal and regulatory frameworks to provide for transparency, certainty and predictability for business.
“Our One-Stop Business Facilitation Centre in the Ministry of Trade and Industry has greatly reduced the number of procedures, length of time and cost for investors to register and start businesses.
“Consequently, Lesotho has improved its overall position in the World Bank’s ‘Ease of Doing Business’ rankings. We have also punched high on other indicators including safeguarding investments, investor protection and ease of trading across borders,” Dr Thabane said.