Maseru- In support of Lesotho’s efforts to promote private sector-led growth to create employment, the World Bank last week approved US$ 13.4 million for the second Private Sector Competitiveness and Economic Diversification Project (PSCEDP II).
Handing over the money, Paul Noumba Um, the World Bank Country Director for Lesotho expressed that they are pleased to provide additional support to this important project which will help the government of Lesotho’s efforts to promote private sector-led economic growth and job creation. Noumba mentioned that the project is in line with the World Bank’s goals to reduce poverty and promote shared prosperity for the poorest people in the world.
This support is set to help in improving the business environment for firms, strengthen select government institutions, and further diversify the economy. Noumba further explained that the additional financing would further assist improve the business environment through the continued facilitation of reforms to reduce the time and cost associated with doing business in Lesotho.
“Moreover, it will facilitate easier access to finance, make trading across borders simpler, and provide streamlined, accessible, and efficient government to business services in order to attract private investment and boost growth,” he emphasized.
The additional financing will stretch as far as supporting a more efficient investment promotion as well as property management agency that can more effectively attract and retain investment. In line with this, the project will pilot a linkages programme between small firms and large ones, and fund the construction of a Tourism and Handicraft Information Center that can serve as a reference point and retail centre for tourists and locals.
World Bank says the private sector can play a vital role in the country’s economic growth and therefore PSCEDPII also works to further economic diversification through continued support of the handicrafts and commercial fruit tree sectors.
For the commercial fruit tree sector, the goal is to create significant local employment and business opportunities through building the necessary value chains and catalyze private sector efforts to scale up production.
Up to this point under the PSCEDPII, Lesotho not only made improvements to its business environment, particularly with regards to access to credit, but also in the ‘Doing Business in Lesotho’ rank where the country jumped by 12 spots to No. 100 in 2017 as opposed to the previous year. The World Bank says this was largely due to the credit accessibility being supported under the project that now cover over 7 percent of the adult population.
The World Bank further states that initiatives to boost private sector diversification have also yielded positive results with the deciduous fruit farms that serve as the hub for horticulture expansion after earning recognized certification and having begun to export apples, plums, peaches and apricots to other countries.
“The project also financed administrative support to the Lesotho Enterprise Assistance Programme (LEAP) which has offered business development support to more than 130 micro, small, and medium enterprises (MSMEs),” World Bank says.
LEAP is working on offering funding for equipment in addition to business development support, deepening the impact of the programme in the long-term.