WTO accession
31 May 1995
Population
2,193,843
Per capita growth rate (%)
6.8
WB Ease of Doing Business rank
137
Share of international non-oil trade (%)
0.833
Value of non-oil goods traded (in US$ million)
820
2011 data - Sources: UNCTAD, World Bank, WTO, UN Comtrade

Lesotho became an Integrated Framework (IF) beneficiary country in 2002 and undertook preparations for a Diagnostic Trade Integration Study (DTIS). The DTIS was validated in February 2003, and the final report approved by the Government in February 2004.

 

Subsequently, Lesotho benefited from two IF Trust Fund Window II projects, including; (i) export product and market development (a project on mushrooms and peaches entitled "Product and Market Development of Agro-based Products" implemented by ITC); and (ii) support for an integrated approach to trade enhancement. Other priorities in the DTIS Action Matrix were taken up by other Development Partners (DPs).

Description of the projects (objectives and interventions)

Under the EIF, Lesotho has been implementing its Tier 1 project, 'Support to National Implementation Arrangements (NIAs)', since July 2010, having been approved by the EIF Board in January 2010. The project aims at strengthening Lesotho's integration into the world trading environment and complements the implementation of the Poverty Reduction Strategy, as well as the country’s efforts in raising competitiveness, productive capacity and product diversification. The project focused on supporting the EIF National Implementation Unit (NIU) to build and strengthen capacity for the coordination of activities related to, particularly, trade mainstreaming, donor coordination and productive capacity building.

Lesotho's Tier 1 project has been extended into phase 2 with approval from the EIF Board in May 2014, after a satisfactory Tier 1 Mid-term evaluation in 2013. The Tier 1 phase 2 project (May 2014 to May 2016) will continue to strengthen Lesotho's integration into the global trading system and operationalize the National Strategic Development Plan (NSDP), the DTIS Update (DTISU) and the Medium-term Programme (MTP) so as to accelerate the country's efforts in raising productive capacity, product and market diversification and product competitiveness, both locally and abroad.

In December 2012, Lesotho's Tier 2 Agriculture Trade Development project was approved by the EIF Board. The project aims to develop national capacity in production and marketing of high-value fresh fruit and vegetables. This capacity building will enable smallholder farmers to supply products that meet buyers' requirements, such as in standards and quality for hotels, supermarkets and other retail outlets within and outside of Lesotho.

This project has been driven and led by two key Ministries: Ministry of Trade and Industry, Cooperatives and Marketing (MTICM) and Ministry of Agriculture and Food Security, with technical assistance from ITC. The project focuses on three actions:

  • First, building capacity of the smallholders to acquire and use greenhouse technology in producing fresh fruit and vegetables for local and international markets.
  • Second, building national capacity and knowledge on product standards and their assessment.
  • Finally, building soft infrastructure to facilitate operations of a supply/value chain system that connects fruit and vegetable producers to export markets, including financial support to the producers.

Main progresses to date

Tier 1 project

Lesotho's DTISU was undertaken by USAID and validated in September 2012. The DTISU was formally published in 2013 in both English and Sesotho versions and distributed to all consulted and interviewed participants. These included Government Ministries and Parastatals, Private Sector Organizations, Non-Governmental Organizations, District Administrators and District Officials as well as to all of Lesotho’s Foreign Missions.

The DTISU reviews the progress in implementing the DTIS Action Matrix, identifies gaps, constraints, challenges and opportunities. It also makes recommendations for further reform aimed at strengthening the enabling environment for trade and investment promotion and related capacity building for both government institutions and private sector for export expansion.

The NSDP 2012/13-2016/17 was finalized in March 2012 and explicitly includes trade issues.  Implementation of the trade elements of the NSDP was included in the MTP, which was finalized in 2013. Lesotho was one of the two pilot countries to prepare a MTP with the assistance of the Executive Secretariat for the EIF.

In a joint initiative Lesotho organized Round Table discussions with DPs, International Agencies and private sector as part of the Lesotho Investment Forum Event in South Africa in March 2014. The Round Table discussion explored avenues to achieve the objective of inclusive and balanced economic and human development. In follow up, the NIU are working with DPs to raise resources for the implementation of the MTP.

As part of the Tier 1 Phase 2 project, Lesotho plans to prepare a National Trade Policy (NTP) and a National Export Strategy (NES). In preparation, the NIU worked with UNCTAD to host a two-day workshop in December 2013 on "Mainstreaming Trade into the National Development Strategies". The workshop had a wide range of participation from government, parliament, senate, private sector, academia and non-governmental organizations, and other resident DPs.

The Tier 1 project facilitated organizational support for the One-Stop Business Facilitation Centre through a planning workshop. There is now joint cooperation in the implementation of the One Stop Business Facilitation Centre between the World Bank, UNDP and the EIF.

In 2013, the Tier 1 project also supported the development and validation of the Consumer Protection Policy 2013 as well as publicity and dissemination of the policy to stakeholders.

The Tier 1 project has facilitated the validation of the National Industrial Upgrading and Modernization Programme, the participation of Lesotho in the Fourth Meeting of Trade Ministers for Landlocked Developing Countries, as well as the UNDP Technical Meeting on Gender and Trade Mainstreaming into National Development Strategies held in Pretoria.

The project has also facilitated and funded Lesotho’s participation in the SADC-EPA States Technical Working Group on Services and Investment, 08-13 November, 2013.

Through the EIF programme in Lesotho, an outreach programme was conducted in September 2013 across ten districts in the country, to increase awareness on trade and trade-related programmes at the district level for government officials, the private sector, non-governmental organizations and the civil society.  The MTICM Minister and the Permanent Secretary participated in around half of these district events.

During 2013, at least two events were held with NSC Members to enhance their understanding of the EIF processes and engage with DPs, including a breakfast meeting prior to the DTISU validation with the participation of a number of Ministers, Ambassadors and private sector representatives.

In 2012, UNDP undertook a capacity needs assessment of trade-related institutions in Lesotho. The study was carried out during the period of the finalization of the DTISU allowing for synergies in the processes. The resulting analysis and plan was validated in December 2012 at a stakeholder workshop. The assessment provides recommendations relating to awareness of trade issues; MTICM institutional framework; leadership and management skills; developing trade strategies; inter-ministerial coordination; trade data and information; communications and IT; as well as M&E.

In October 2012, a Private Sector Roundtable was organized through the EIF Tier 1 project to support the national trade agenda.

Outreach activities: Lesotho was part of the film "Trade Works", which has been used to sensitize members of the NSC. An international consultant developed a communications strategy, working closely with the MTICM communications lead to profile the importance of trade and development. Support is on-going from the ES to align the strategy to the NIU work plan and in promoting impact-focused outreach activities.

In rolling out the strategy, Lesotho has developed a website on EIF delivery informing partners of the status of programme implementation and using it as a forum to engage wider trade and trade‑related departments as well as DPs. Lesotho also features in the EIF country profile series, which have been widely disseminated to engage the different stakeholders in driving forward programme implementation.

Lesotho has also been strong in advocating trade for poverty reduction using the DTISU as a roadmap for these purposes. With committed partnership support, a Lesotho post-DTIS event was hosted by UNCTAD in 2012 focusing on using inter-agency cooperation to reduce poverty through trade. Lesotho also participated in the first EIF M&E and Communications Regional Workshop for African Anglophone countries in April 2013 in Zambia.

In February 2012, Lesotho hosted an EIF regional awareness raising workshop on the objectives, principles and implementation of the EIF programme for Eastern and Southern African EIF Countries.

 

Tier 2 project

Lesotho’s ‘Agriculture Trade Development Project for the Fresh Produce Sector’ contributes to the enhancement of Lesotho’s sustainable economic growth, employment, food security, nutrition and poverty alleviation through building and strengthening the capacity of smallholder producers to commercialize, diversify and promote production of fresh fruits and vegetables for domestic and export markets.

In terms of capacity building for agricultural purposes, the fresh produce sector project will directly benefit 1,050 farmers, of which 30% are women.

The EIF Tier 2 project has strong potential for synergies with a World Bank Private Sector support project which also includes work on greenhouse technology.  There is also cooperation with China in the operations of the Mushroom factory, with China providing technical assistance and expertise in the production process. 

Forty Greenhouses and 21 hail net houses have been distributed and installed in four districts (Leribe, Mafeteng, Maseru and Teyateyaneng) to local producers. 

Thirty-seven Horticultural District Officers from ten districts have been trained on the Greenhouse and hail nets Installation, handling, seedling production, transplantation, drip irrigation systems, plant health protection and general factors concerning good agricultural practices.

Thirty-seven Field Services Officers and Agronomists from the Ministry of Agriculture and Food Security and from MTICM were trained (Training of Trainers) on Protected Plant Technology and good agricultural practices.

Furthermore, four officials from the Departments of Standards and Quality Assurance, Agricultural Research and Disease and Plant Control have undertaken a training attachment in Kenya.

On 7th November 2013, the first seeds (cucumbers, sweet peppers (green, yellow and red) and tomato) were planted.  Moreover, the initial batch of cucumber seeds matured much more rapidly than expected indicating that Lesotho cucumbers may have a production advantage of 20 days compared to the production and harvesting norm.

Outlook

There is ongoing resource mobilization for implementation of the MTP and greater integration of the NIU into the Ministry's operational structures.

Work under way with UNCTAD, ITC and UNDP on drafting a NTP and a NES.

Outcome 1: Sufficient Institutional and management capacity built in EIF countries to formulate and implement Trade related strategies & implementation plans
Outcome IndicatorBaseline2013201420152016
O1.1 Tier 1 ' Support to NIAs' project completed or under implementationNoYes
O1.2 EIF Country with complete, up-to-date validated DTIS Action MatricesNoYes
O1.3 Level of capacity of NIU to perform fiduciary programme management for Tier 1 projectN/A3
O1.4 Country with up-to date trade strategiesNoNo
O1.5 Country with quality trade strategyN/AN/A
O1.6 Country with quality trade strategy implementedN/AN/A
Outcome 2: EIF countries mainstream trade into their national development strategies and plans
Outcome IndicatorBaseline2013201420152016
O2.1 Trade in PRSP and/or National development strategies22
O2.2 Existence of productive sector strategies integrating the trade dimensionYesYes
O2.3 Functioning public/private consultation mechanism31
Outcome 3: Coordinated delivery of trade related resources (funding, TA etc.) by donors & implementing agencies to implement country priorities following adoption of DTIS Action Matrix
Outcome IndicatorBaseline2013201420152016
O3.1 Availability of an annual rolling implementation overview integrating all trade-related government & donor-supported activities (including gender & environment)NoYes
O3.2 Frequency of government and donor consultations on trade-related matters43
O3.3 UN CEB Cluster activities based on DTIS Matrix priorities in EIF CountriesYesYes
O3.4 Country with joint donor initiatives in the trade area (such as need assessment; strategy formulations; programming; pooled funding; M&E; etc.)NoYes
Outcome 4: EIF Countries secure resources in support of initiatives that address DTIS Action Matrix priorities
Outcome IndicatorBaseline2013201420152016
O4.1 Country with implementation plan integrating DTIS/Action Matrix priorities and indicating financing needs to be met through ODAN/AN/A
O4.2 Country where a Government budget exists for implementation of its trade strategyNoYes
O4.4 Number of projects funded by donors related to the DTIS Action Matrix02
O4.4.1 Amount of projects funded by donors related to the DTIS Action Matrix (Million USD)037.8

The Diagnostic Trade Integration Study (DTIS) process has been used as a catalyst to improve the business environment, promote private sector development and to pilot some new crops (especially since Lesotho is an agro-based economy with 80% of the population living in rural areas engaged in subsistence farming practices). Several relevant legislative changes and new laws have also been undertaken since, and through the DTIS, Government has managed to better engage with Development Partners to take forward the prioritized national action plans.

Earlier EIF support under the Integrated Framework driven by the EIF National Implementation Unit working with ITC and in collaboration with the Ministry of Agriculture, led to the establishment of a Center Mother Unit (experimental station) for spawn production and training of farmers in growing mushrooms. This helped over 5,000 individuals and families across ten districts, 60% of them women and over 12% living with HIV/AIDS.

Farmers' production also increased to 25kg of edible and medicinal mushrooms per square metre which significantly increased their earnings and income. The project also attracted further funding of US$750,000 from China to increase production and export. Lesotho is working to replicate this success in its EIF Tier 2 project promoting the production of fresh fruits and vegetables for domestic and export markets.

Moreover, under the IF funded feasibility study for the peach industry, 7,000 trees were distributed to farmers in six districts to kick-start peaches' production for exports. The study also included the carrying out of market surveys and an export awareness campaign on peaches' high value market potential.

DTIS Update

Starting date / End date
30/01/2012
Approved Budget
160,000
Board Approval Date
26/01/2010
Disbursement
160,000
Expenditure Reported
160,000
MOU Approval Date
22/12/2011
MOU Expiry Date
21/12/2012
Phase
Completed

NIA Support (T1 Phase 1 and 2)

Starting date / End date
15/07/2010
Approved Budget
1,474,000
Board Approval Date
26/01/2010
Disbursement
1,199,000
Expenditure Reported
1,209,604
MOU Approval Date
25/03/2010
MOU Expiry Date
30/06/2017
Phase
Implementation

Agriculture Productivity and Trade Development

Starting date / End date
30/01/2013
Approved Budget
2,735,685
Board Approval Date
21/12/2012
Disbursement
2,735,685
Expenditure Reported
2,005,463
MOU Approval Date
17/01/2013
MOU Expiry Date
31/12/2016
Phase
Implementation
Posted: 30/10/2015

Lesotho: Improving productive capacities, sustainable consumption and production patterns

“From our greenhouse operations, we have contributed meaningfully towards the livelihoods of others around the village in which we’re working, and we are supplying supermarkets and restaurants in Maseru as well as in markets in neighbouring South Africa.” – 'Matiti Kabi Sekamaneng, an owner and primary supervisor of tomato and mushroom cultivation and one of the beneficiaries of the EIF high-value fresh fruits and vegetables project.

As a country entirely surrounded by its South African neighbour, Lesotho has a pressing need for trade to give it the opportunity it deserves to compete in the domestic, regional and international economy and pave its way out of poverty.

With this drive, coupled with a strong commitment to the trade agenda, Lesotho has benefitted from EIF support to strengthen its integration into the world trading environment. Furthermore, EIF support has complemented the implementation of the Poverty Reduction Strategy as well as supported the operationalization of the National Strategic Development Plan, the Diagnostic Trade Integration Study Update (DTISU) and the Medium-term Programme. For Lesotho, these have been ongoing priorities to help accelerate the country's efforts in raising productive capacity, product and market diversification and product competitiveness, both locally and abroad. 

With a robust analysis provided in the DTISU, recommendations have also been made for further reform aimed at strengthening the enabling environment for trade and investment promotion and related capacity building for both Government institutions and the private sector for export expansion. Moreover, Lesotho has managed to respond to significant challenges in building up national capacity to trade productively and sustainably. Through an EIF project, implemented by ITC, Lesotho is working to develop national capacity in production and marketing of high-value fresh fruits and vegetables. Lesotho has made headway to enable smallholder farmers to supply products that meet buyers' requirements, such as in standards and quality for hotels, supermarkets and other retail outlets within and outside of Lesotho.

The EIF‑supported fresh produce project contributes to the enhancement of Lesotho's sustainable economic growth, employment, food security, nutrition and poverty alleviation through building and strengthening the capacity of smallholder producers to commercialize, diversify and promote production of fresh fruits and vegetables for domestic and export markets. The project is meant to directly benefit 1,050 farmers, of which 30% are women and 10% are youth.

To ensure the sustainable utilization of land and resources, 85 greenhouse kits have been distributed with 58 installed in four districts (Berea, Leribe, Mafeteng and Maseru) to local producers. The project has stimulated the rolling-out of additional greenhouses through the investment of other projects and private capital. Linkages to companies have been made to avoid any product wastes, e.g., the tomatoes are sold to Basotho Canneries to be processed into tomato puree for export, or sold to hotels and restaurants as well as retail chain stores (Shop rite, Pick n Pay, etc.).

In the Berea, Leribe, and Mafeteng areas, cucumber, sweet peppers and tomatoes were planted and were harvested much earlier than the harvest time period in the neighbouring countries, which therefore gives Lesotho an early fresh vegetable produce market opportunity and an advantage in the region. The selling prices of this produce in the local market ranges from US$0.35-0.90 per cucumber, US$1.50-2.00 per a kilo of tomatoes, US$2.00-2.50 per kilo of green peppers and US$5.60-6.40 for yellow and red peppers. Cabbage, lettuce and spinach were planted and harvested early as well in Maseru in very good quality. These were bought in large quantities by local hotels, restaurants and food franchises for their salad dishes. Local selling prices ranged from US$0.55-1.50 per head of cabbage, US$1.20-2.00 per head of lettuce and US$0.80-1.20 per bunch of spinach.

Moreover, with the improved production capacities, statistics have showed that each greenhouse populated with 274 tomato plants, 200 sweet pepper plants and 110 cucumber plants had the potential of giving a return of between US$3,500-4,500 (about 35,000-45,000 maloti) per one growing season if well managed and if agro support and training on Good Agricultural Practice were followed. This has provided an opportunity to farmers to make a good living as well as expanding their project at least beyond four planting seasons.

Lesotho has a good basis on which to build for the future. Here, helping to put poor rural communities at the centre of trade and development efforts, has shown how change can have an impact on carving out strong prospects, especially for the most vulnerable. With the right backing, smallholder farmers have been brought on board and community-based organizations built up (many of them for women), helping them start to access new markets with agricultural products.

Sector-wide strategies for agro-products have also been improved, producers have been connected to markets and the agro-product range has been expanded, while improving quality and volumes and developing skills and support for mushroom producers, cooperatives and retailing outlets. Future plans include improved branding and packaging to obtain better prices and move up the value chain to dried and powder products, transportation, cold storage facilities and agro-processing as well as compliance with food standards and certification.

With a nationally led approach putting trade at the heart of poverty reduction efforts, Lesotho's trade development future seems bright with continued support from development partners.

Focal Point

Mr. Fusi NOTOANE
PS
Ministry of Trade and Industry
, Lesotho
Tel: +266 58889919 or 66329919

NIU Coordinator

Mr. Phera LEPATI
Planning Unit, Chief Economic Planner and Head of Planning
Ministry of Trade and Industry
, Lesotho
Tel: 22320565

Donor Facilitator

Mr. Ashah KANAN
UNDP
UN House, United Nations Road, PO Box 301
Maseru, Lesotho
Tel: +26658851170

UNDP Contact

Ms. Nthatuoa MATSOSO
Resident Coordinator, Personal assistant to Resident Coordinator
UNDP
Maseru, Lesotho
Tel: +
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WTO DG Azevêdo visits EIF project in Lesotho
WTO DG Azevêdo visits EIF project in Lesotho
WTO DG Azevêdo visits EIF project in Lesotho
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