Manufacturing Exports
Manufacturing exports have been
the driving force behind Lesotho’s economic development. Manufacturers have
combined Lesotho’s competitiveness with its highly favourable access to world
markets to achieve profitable growth. Chart 1 shows growth in exports between
2000 and 2004.
Exports have
shifted from a traditional dependence on the Southern African Customs Union.
Chart 2 and 3 show the growth in exports by destination.
CHART 1
Export Trend (Million Maloti)
CHART 2
CHART 3
Destination of Exports -
2000 and 2004 (in %)
Thus
Lesotho-based manufacturers have a proven record of success in the world’s most
competitive and lucrative markets. Lesotho’s network of trade preferences has
played a crucial role in providing favourable access, this includes:
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·
Southern African Customs Union (SACU)
Lesotho is a member of
SACU together with the Republic of South Africa, Botswana, Swaziland and
Namibia. This is a significant and rapidly growing market for a large range of
products. Access is duty free for intra-SACU trade whose market represents 50
million consumers.
·
European Union (EU)
As an ACP member state,
Lesotho has signed the Cotonou Agreement, a new ACP –EU
economic and trade co-operation framework. The agreement offers improved trade
benefits and concessions including unlimited entry for a wider range – over 99%
of industrial goods from ACP countries, especially least developed countries
such as Lesotho. This access into the 456 million European Union consumer
market started in June 2000. The agreement is a successor to the Lom`e
Convention.
·
United States of America (USA) – 295 million consumers
The generalised system of preferences that provides highly concessionary access
for Lesotho exports has been enhanced by the Africa Growth Opportunities Act (AGOA)
which affords duty-free and quota-free access to a wider range of products from
Sub-Saharan countries, including Lesotho, into the markets of USA until 2015.
A special provision for Least Developed Countries allows for export of apparel
made from third country raw materials until 2007.
·
Southern African Development Community (SADC)
Lesotho, as a member of SADC, enjoys concessionary access to these markets
which serve 170 million consumers. Implementation of the SADC Trade protocol
offers improved access into the regional SADC market.
·
Western Europe (except EU)
These countries operate
schemes through which Lesotho exports derive benefits. Switzerland allows
duty-free entry for some agricultural products included in the scheme. Austria
grants tariff reductions covered by the scheme and allows some agricultural
products duty-free entry.
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·
Nordic countries (Denmark, Finland, Norway & Sweden)
The Nordic/SADC accord
was signed in 1986. It provides enormous opportunities for Lesotho-based
companies to access and optimally exploit Nordic markets.
·
Japan
The GSP scheme grants
preferential entry at a variety of levels for listed agricultural products.
Most industrial products from Lesotho are accorded either duty-free entry or
entry at 50% of the normal Most Favoured Nation (MFN) rate.
·
Commonwealth
Canada, Australia and New
Zealand operate GSP schemes under which tariff reductions are granted to
specified lists of agricultural and industrial products. Handcrafted goods from
Lesotho may enter these markets duty-free.
Promotion of
the Export Trade
Manufacturers are afforded a
full duty rebate on imported raw materials or components for use solely in the
processing or manufacture of goods for the export market. This facility assists
exporters to avoid the strain imposed on their liquidity by customs and other
duties for the importation of raw materials or components at the time of
importation.
Capital goods
imported for the purposes of manufacturing goods under rebate facilities are
also free of customs duties.
This facility
ensures that a company located any where in Lesotho can have effective Export
Processing Zone status.
More
information on this special incentive for exporters and the operational
guidelines can be obtained from:
Lesotho Revenue
Authority (LRA)
P O Box 1085
Maseru 100
Tel: +266 -
22313295/22313796
Commissioner of
Customs
Department of
Customs
P O Box 891
MASERU
Tel: +266 -
22313796
