By Thandiwe Kubere

MASERU – The Ministry of Trade Industry Business Development and Tourism on Friday officiated the awarding ceremony of five Entrepreneurship Support Organisations (ESOs) to kick start the 6 months incubation programme, through the World Bank funded Competitive and Financial Inclusion (CAFI) Project.

The occasion marked a great milestone of fulfilling one of the promises made by the government of Lesotho through the Ministry of Trade Industry Business Development and Tourism. The day witnessed nine Lesotho Enterprise Support Organizations (ESOs) being presented with certificates of achievement for having completed the capacity building program. 

 The aim now, is to see more ESOs coming on board through formal licensing processes to qualify them to deliver the incubation program. From the nine ESOs, five were provided funds to start the piloted process.

Each ESO was awarded $100,000, where $30,000 is for the ESO for 6 months and $70,000 is to be used as seed capital for 10 Enterprises at $7,000 each (Start-ups and SMEs) to incubate over 6 months. Applications for Basotho’s start-ups are to be expected from the 9th to 20th October. The five winning ESOs were; Basotho Enterprises Development Corporation – BEDCO, LUCT Lesotho, NUL Research and Innovations Hub, Raizcorp Lesotho and last but not least The Entrepreneurs Network.

CAFI Project Manager Mr. Chaba Mokuku reminded that the project was successfully launched in April 2023, with the aim of increasing access to business support services and financial products targeted at Micro Small Medium Entrepreneurs (MSMEs), giving more priority to women and youth enterprises. The CAFI Project is moving towards building the local private sector as 500 small businesses are planned to be incubated up to the year 2028 in July. CAFI is funded through a loan of $45Million, with a supporting grant of $7.5Million totalling $52, 5 Million.

 “The CAFI project is by far the biggest project on supporting the private sector in the country”, he said. It is founded on three interrelated priority areas or pillars which are intended to enhance the competitiveness of the private sector in Lesotho. The first pillar is to improve the business environment. The second pillar is to expand SMEs participation in high potential value chains.  The third pillar is strengthening the entrepreneurship ecosystem and also supporting SMEs in Lesotho. He further enlightened that the event was focused more on the third pillar.

World Bank Country Representative for Lesotho, Mr. Yoichiro Ishihara declared this was great progress in the CAFI project and the entrepreneurship ecosystem. He congratulated the ESOs for having completed the program. “It is also crucial for the ESOs here today, to engage and join efforts. The Lesotho Entrepreneurship Hub and Seed Financing (LEH&SFF) will work closely with the ESOs in the coming six months, and we need more and more ESOs.” He further expressed his excitement for being part of such a great momentous occasion which promises development and improving the entrepreneurship landscape in the country through the CAFI project. “Let us start working today, we do not have to wait for next time. The promising sectors are those of textile, tourism and agribusiness. There are many opportunities waiting to be realized so let us explore and realize them”, he enlightened.

Representing the nine ESOs, Ms. Mpho Letima expressed, “Ladies and gentlemen, what we had during the program was not amazing, it was an experience of a lifetime. I have no idea how we were selected but there was a watershed moment when I looked at all of the ESOs to say how did I become part of such an amazing team? It is not a matter of if we deserved to be there, because we did, and we did not seat there and start wondering how the next person became part of the program. This is because we are a set of ESOs which are highly qualified of being selected and that is one thing I can confidently stand to say because each and every one of them deserves it.” She added that amongst them were people who put their hands in the ground to make sure that Basotho progress. They therefore applauded the Ministry of Trade Industry Business Development and Tourism for doing so well.

 “I would also like to say to the World Bank, I do not know what you saw but you ensured that the project was amazing and fulfilled the purpose it was intended for. You walked with us, and you understand. You gave us things we only dreamt about as Basotho because we had watched it happen elsewhere and we never thought we would be part of a journey where we all see ourselves with all this case studies which were presented to us”, said Letima.

She mentioned amongst the amazing experiences the program offered were practical, realistic, and educational and they could relate to all the aspects of it. “It was hands on deck to make sure that when we come back home, we deliver what needs to be delivered. To those who did not get the baiting today, it does not mean we are not winners- we are still winners, and we are still yet to work together. However, even though we have such a capable team, there are a few things we still have to pay attention to.” She declared there is still a lot to be done concerning the country’s Legal Framework, more especially in relation to enterprise ecosystems. She stated building the enterprise ecosystems was one of the challenging things they had to do. “So, the question is, as we carry this important part of national building social cohesion, peace building even, at the end of the development, what tools are we going to use to make sure that the work which is supposed to be done is carried out within proper measures? For us to be able to succeed, we need the appropriate tools for this to happen and this is very important to consider”, she urged.

Then again, through CAFI, the government made a deliberate effort to digitalize government on business services to promote public sector efficiency and reduce the time and costs of doing business. “The World Bank supported the government of Lesotho in the previous operations where we were able to implement a number of government-to-business digital systems that made it possible to issue licenses and permits efficiently” said Makuku. He enlightened these include business registrations and licensing systems. It also includes systems such as construction permits, land administration and property registrations with LAA and also systems for facilitating trade across borders with Revenue Services Lesotho.

Therefore, the CAFI project was assured to enhance these systems and ensure data is securely exchanged between these systems. Another component of improving the business environment is improving financial accessibility as it has been found to be one of the major constraints facing the private sector. So, to bridge that gap, CAFI is working with financial institutions to develop innovative financial products. The project is also working closely with LNDC to review the operational systems to make them more efficient, as well the Central Bank of Lesotho to improve existing credit infrastructure systems with a view to improving access to credit in the country. The third component is enhancing the resilience of MSMEs to climatic shocks and disasters. “We learnt a lesson from Covid 19 which caught us unaware, and we ended up struggling to mitigate the impacts of poverty”, he noted. Lessons learnt from Covid will now be applied in this regard- the government has established a resilience fund, as a grant, which will be used towards climatic shocks and disasters and will be disbursed to SMMEs should drought hit and other disasters in the country. The stakeholders are also working with the Ministry of Finance to develop the disaster-ready financing policy as well as the World Bank to look into the possibility of procuring insurance for the country’s emergency disasters which cannot be resolved or addressed with the contingency fund the government already has in place.

“The government is working hard to try and level the plain field. Coming to the second aspect of, we have two selected value chains which we believe can transform the economy of this country and create the much-needed jobs. This is the textile and garment industry, which took a knock during Covid, and the government is working with a number of partners   including the international labour organization and ITC to revitalize the sector. We are also looking to promote the participation of Basotho firms in the industry”, he said.  

Additionally, he declared another important high potential value chain is that of horticulture. Here a couple of projects were identified and undertaken, which demonstrated that Lesotho has a comparative advantage in the seed and fruit production. “We have three commercial farms in Leribe district, and the intention is to roll out the program to establish at least fifteen of national farms in the country. So, we are working closely with the UNDP to ensure that we build and capacitate our farmers to be able to participate in this industry, focusing mainly on exports.”  

In terms of the third pillar, which is strengthening the entrepreneurship ecosystem and also supporting SMEs in Lesotho, he said the entrepreneurship ecosystem in Lesotho is fragmented and there is hope to see a much more coordinated approach to entrepreneurship. As a result, the World Bank, under CAFI is supporting the establishment of the Lesotho Entrepreneurship Hub and Seed Financing with an objective to strengthen the emerging entrepreneurial ecosystem in Lesotho and to improve access to early-stage finance for start-ups and innovative Small and Medium Enterprises (SMEs). The LEH&SFF aims to achieve this objective by providing business support services, entrepreneurship training, and access to capital for Basotho start-ups and innovative SMEs over a period of five years. 

“The strategy that we are using to implement this program with various stakeholders is to ensure that as we build the entrepreneurship ecosystem in Lesotho, we link or integrate it to the broad dimensional entrepreneurship ecosystem in Southern Africa. We are also looking to link it with the Diaspora community who will come as investors with the much-needed skills to support the initiative”.

He further indicated that the nine ESOs have been capacitated to deliver comprehensive support to Basotho start-ups and SMMEs in order to provide incubation. The Hub is located at the Fairways Plaza and work has already begun of capacitating enterprises and incubators.   

In particular, the ESOs are going to be capacitated to provide incubation services to up to 500 start-ups and innovative SMEs during a period of five years. Each ESO will be allocated 10 enterprises to incubate over a period of six months. This come in handy at a time where the country is moving towards achieving the National Strategic Development Plan by 2030, which aims to have a sustainable inclusive economy that is private sector led.