EXPORT OPPORTUNITIES

Lesotho: Serving World Markets

Manufacturing exports have been the driving force behind Lesotho’s economic development. Manufacturers have combined its competitiveness with its highly favourable access to world markets to achieve profitable growth. Table 1 shows growth in exports between 1991 and 1998.

Exports have shifted from a traditional dependence on the Southern African Customs Union. Tables 2 and 3 show the growth in exports by destination.

TABLE 1 ( CHART)

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TABLE 2 AND 3 (PIE CHARTS)

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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:

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 60 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 non-reciprocal trade benefits and concessions including unlimited entry for a wider range - over 99% of industrial goods from ACP countries, especially least developed ones like Lesotho. This access into the 400 million European Union consumer market is for a twenty year period starting in June 2000. The agreement is a successor to the Lom`e Convention.

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United States of America (USA)
The generalised system of preferences that provides highly concessionary access for Lesotho exports has been enhanced by the Africa Growth Opportunities Act (AGOA)/Trade and Investment Act 2000 that will afford duty-free and quota-free access to a wider range of products from Sub-Saharan countries, including Lesotho, into the markets of USA for an eight-year period starting on the 1st October, 2000. This will provide a significant competitive price advantage over many other international suppliers. A special provision for Least Developed Countries allows for export of apparel made from third country raw materials for the first 4 years of the eight year bill.

Southern African Development Community (SADC)
Lesotho, as a member of SADC, enjoys concessionary access to these markets which serve 200 million consumers. Implementation of the SADC Trade protocol offers improved access into the regional SADC market.

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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.

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.

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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 material 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 material or components at the time of importation.

This facility ensures that a company located anywhere 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:

The Director
Department of Customs
P O Box 891
MASERU
Tel: +266 - 22313796

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