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Opportunity Issue 101

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INVESTMENT Invest in Lesotho A major exporter of diamonds with a thriving manufacturing sector, Lesotho is attracting interest in a wide range of sectors from mining and upstream textile manufacturing to tourism, high-value agriculture, automotive components and electronics. Lesotho represents a good value proposition for investors of many types. LESOTHO NATIONAL DEVELOPMENT CORPORATION Lesotho National Development Corporation (LNDC) is a corporate body mandated by the Government of Lesotho to “initiate, promote and facilitate the development of manufacturing and processing industries, mining and commerce in a manner calculated to raise the level of income and employment in Lesotho”. LNDC also promotes Lesotho as an attractive investment location for both foreign and indigenous investors. The Corporation is charged with the implementation of the country’s industrial development policies and investment strategy. Vision A be a catalyst for a diversified, globally competitive economy, underpinned by manufacturing and high-tech agriprocessing industries. Mission To deliver excellent and speedy services as we partner to achieve inclusive and sustainable economic growth. Services LNDC offers four core services: investment and trade promotion, investment and trade facilitation, aftercare and development financing services. These core services are offered to foreign and indigenous investors primarily through serviced industrial and commercial sites and buildings. In addition to serviced sites, LNDC offers an array of financing solutions. Organisational structure The Executive Management Team comprises four General Managers who head four strategic business units: • Development finance institution (semi-autonomous) • Property development and management (semi-autonomous) • Investment and trade promotion • Corporate services. INVESTMENT OPPORTUNITIES Lesotho is growing beyond its traditional strengths, for example as a manufacturing hub for automobile components. Major opportunities lie in mining and in upstream manufacturing in the textile industry. Investment opportunities also exist in the manufacturing of electronic and automotive components as well as tourism, high-value agriculture and micro, small and medium enterprises. KEY INDUSTRIES Mining Diamonds are the most-exported commodity in Lesotho. The premium quality of 100-plus carat diamonds make them popular around the globe. Lesotho’s mines produce the highest proportion of large stones 46 |

in the world, representing attractive opportunities for new market entrants. Lesotho also has mineral deposits in base metals, clay, dimension stone, sand and gravel, which support the mining sector. The country is exploring further investment opportunities in the mining sector value chain, including the exploration and mining of diamonds, diamond polishing, sandstone and quarrying and harnessing water resources. Manufacturing: textiles, apparel and footwear Lesotho is among the top four producers of textile and garments in Africa and has a well-established footwear sector. The sector produces high-quality textile, garments and footwear for global brands in the US and South Africa. The country’s single vertically integrated spin-yarn, dye-weave, textile mill specialises in the manufacture of denim fabrics and produces for notable companies such as Levis Strauss, The Children’s Place and Gap. Lesotho also produces knit garments and woven garments. The clothing and footwear sector has started the “Made in Lesotho” initiative which has been attracting foreign investments. Lesotho is also known for its fair and ethical labour standards in the textile industry. Lesotho represents an attractive hub for investors looking to invest in the production of denim garments and has a higher potential for export and trade. Automotive components Lesotho has a growing proposition in the automotive industry, strategically focusing on supplying labour-intensive automotive components to South Africa’s strong automotive industry. The country’s competitive advantage in manufacturing, lower fuel costs, relatively competitive wages and overall lower production costs allow it to produce automobile components for companies such as Volkswagen, BMW, Nissan and Toyota. Lesotho’s automotive industry also has the potential to develop capacity for service-export markets such as the manufacture of leather car-seat covers, plastic and leather interior accessories and electrical components. Electrical appliances and electrical components The electronics component and appliances sector currently produces switches, relays, fuses, surge suppressors, plugs, sockets, lamp holders and other products which it exports to China, the EU and the UAE. For the electronic appliance sector, Lesotho produces TV sets, sound recorders and producers and related accessories, which it exports to Southern African countries. Investors could benefit from double-digit returns in the electrical appliance and components sector. Water Lesotho has one of the purest water sources of any country in the world, with very little microbiological and chemical contamination requiring little treatment. The country currently sells bulkwater For more information Lesotho National Development Corporation Email: | Website: to South Africa. There are investment opportunities in the waterbottling industry to export safe drinking water to South Africa and neighbouring countries. Agriculture and agro-processing Lesotho is well endowed with a pristine climate that is good for agriculture and an abundance of pure water to support the growth of crops and processing. The government provides strong support to commercialise the agricultural sector in the form of lower tax rates (10%) compared to normal tax rates of 25%. The favourable climate and highlands in Lesotho allow it to produce fruits such as peaches, apples and blueberries that are out of season in other parts of the world, creating an opportunity for year-round production of fruits for exports. The country is also exploring opportunities in cold-chain management and increasing salmon farming for export. The Lesotho National Development Corporation is also providing support to investors in the agriculture sector by pooling land for investors and simplifying the process for setting up agro-processing businesses. Government plans to invest in greenhouses, plants and farms that can be leased to investors, thereby reducing the cost of setting up businesses. Tourism Tourism is a growing sector in Lesotho, with a focus on nature, mountains, highlands and adventure tourism. The country boasts a wide range of outdoor adventures and extreme sports, including skiing at Afriski slopes. Technology and innovation The high literacy level in Lesotho and pool of qualified graduates who are available for ICT projects of all types make the country an attractive proposition for investors in this sector. The country has a partially-open ICT sector with a good level of international connectivity. Other sectors Call centres; Knowledge Process Outsourcing (KPO) and Business Process Outsourcing (BPO); Fashion design hub. QUICK FACTS ABOUT LESOTHO Lesotho is an established manufacturing hub for textiles, garments and footwear in Africa. It is second in Africa in value terms in exports to the US, and fourth in volume. Lesotho benefits from one of the lowest tax rates in Africa at 10%. • Building on its global competency and low cost of doing business, Lesotho is positioning itself for automobile component production, electronic appliances and electric components. • The country has the potential to become a centre for IT outsourcing and innovation, given its high literacy rate of 86% and steady supply of graduates. • Lesotho is developing Special Economic Zones which will serve several industries including agriculture and agro-processing, medicinal cannabis, pharmaceuticals and manufacturing. • The currency Lesotho Loti (LSL) is pegged to the South African Rand (ZAR) one-to-one and Lesotho is part of the regional Common Monetary Area.

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