Mauritius, August 16th 2004 - What is your objective at the SADC Summit?

Lesotho’s goals are similar to those of other countries in the region. We want to develop and build an integrated community, which is clearly a means towards increased trade and investment, which involves a great deal of cooperation in monetary and economic fields. This has been led by the need to build capacity within the region and reduce our dependence on the economy of South Africa, which materialized through projects like the Lesotho water scheme which is providing water supply to South Africa.

The infrastructure of Southern Africa already has a strong potential for intra-regional cooperation. Yet there is a need to develop that infrastructure, so we believe that it is important to move forwards towards a greater economic development, investment, telecommunications and overall interconnectivity.

As head of the Commission for Political, Defense and Security Cooperation, what are your conclusions?

Lesotho has had the honour of chairing the Commission during the last year, dealing with the numerous issues that have involved the redefinition of security organs, the institutionalisation of defense and security cooperation and adoption of conflict management politics. It has been a very productive year.

Lesotho is the smallest economy of the SADC region. Do you feel that your strength is in the development of niche markets within the region?

As a small economy we have an advantage of being able to easily select specific niche markets that will have a great impact on the local economy. For example, thanks to AGOA [the African Growth and Opportunity Act], our exports in the last 5 years have greatly increased. We now have 55,000 people employed in the textile sector and in the space of only 5 years we have become the largest exporter to the US textile market of the AGOA member countries. This would not have had such a great impact in a larger country, yet in Lesotho the impact on the local economy was far greater, due to its smaller size.

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We have also adopted a customs union between Lesotho, Botswana, South Africa, Swaziland and Namibia, which facilitates a free movement of goods and services, which means that any company that locates its offices in Lesotho can exploit the whole market. This creates a dynamic and stable environment in terms of labour, trade and productivity. These are some of the means that we plan to use within SADC as well as the SACU [Southern African Customs Union] region, in order to target specific markets and niches.

Tourism is also another area: while there are numerous tourists that are going to South Africa on vacation, there is no reason for which they could not come to Lesotho within a regional package tourism offer. We offer great opportunities in adventure tourism that are waiting to be discovered.

The economy only grew by 4.2% last year. What must be done to increase growth?

When I introduced my budget two years ago, I was laying the foundations for sustainable economic growth. We have grown from 2.8% growth in previous years to a 4.2% last year. Although we were anticipating 4.8% growth this year, the high cost of the Rand means that we should stay at current levels of growth for now.

I believe that Lesotho’s growth will continue, as we diversify and deepen our economic development.

Has foreign direct investment been growing?

It has been high for the textile sector, but it is not as high as it could have been due to the completion of certain construction projects.

We are, however, opening a diamond mine and in negotiations to develop another mine, and we are looking into diversification of our industrial activity. For example, we believe that it is also possible for us to produce certain auto part components that are used in the final assembly line of South African car manufacturing plants.

Therefore I am confident that investment will pick up in the next few years.

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