By: Kananelo Maphenchane
MASERU
The Revenue Service Lesotho held a symposium meant to create awareness on tax and Customs treaties and trade agreements that Lesotho is involved in in an effort to encourage Basotho traders to upscale their businesses to international markets. With multiple business owners and organisation’s in attendance, discussions were held to give clear guidance on topics such as trade agreements and Approved Economic Operator registration and their benefits.
Currently, Lesotho is facing uncertainties pertaining to the African Growth and Opportunity Act, which is a US trade agreement that was passed in 2000 to help the economies of sub-Saharan Africa. AGOA had created one of the biggest export markets for Lesotho, and there are chances it might get shut down.
Amid these challenges, Revenue Service Lesotho (RSL) has urged Basotho to explore opportunities offered by other trade agreements in which Lesotho participates. These include the Southern African Customs Union (SACU), the Southern African Development Community (SADC) Free Trade Agreement, the SACUM-UK Economic Partnership Agreement (EPA), and the African Continental Free Trade Area (AfCFTA).
Trade agreements are formal arrangements between countries designed to regulate the exchange of goods and services. According to Thebe Kepa from the RSL, these agreements provide numerous benefits, including increased market access for local businesses. Through arrangements such as SACUM-UK EPA, manufacturers and traders in Lesotho can export their products not only within the SADC region but also beyond the African continent.
These agreements also reduce trade barriers, such as tariffs, making it easier for Basotho entrepreneurs to compete in global markets. Moreover, the facilitation of cross-border trade creates employment opportunities, particularly in the manufacturing sector, which plays a key role in Lesotho’s economy.
Speaking on the importance of these agreements, Thapelo ‘Moleli, Deputy Commissioner for Customs Advisory Services at RSL, emphasised the need for local traders to capitalise on existing trade opportunities. “‘Basotho businesses must align their practices with the requirements of these trade agreements. Partnerships with institutions such as the Lesotho National Development Corporation can attract foreign investments, further boosting our trade prospects,” he stated.
One of the measures taken to improve Lesotho’s trade efficiency is the implementation of the Authorised Economic Operator (AEO) program. AEO is an international initiative under the World Customs Organisation (WCO) SAFE Framework of Standards, designed to enhance supply chain security and streamline customs procedures. Businesses that meet stringent compliance criteria and maintain high operational standards can qualify for this designation.
In Lesotho, the AEO program has proven instrumental in reducing export processing times, especially at South African ports, thanks to close cooperation with South African Customs authorities. This has facilitated faster movement of goods, lowered operational costs, and increased competitiveness for Lesotho’s exports in international markets.
The program also promotes trade security and compliance, while contributing to the broader development of Lesotho’s trade industry. By simplifying logistics and cutting transportation costs, the AEO program makes it easier for local businesses to expand their reach and enhance their profitability.
“The introduction of the AEO program has encouraged compliance and improved the efficiency of trade processes,” explained ‘Moleli. It’s now up to Basotho traders to seize these opportunities and focus on enhancing the quality of their products to meet international standards.
As Lesotho navigates this period of uncertainty, RSL has called on local businesses to work collaboratively to raise the quality of their products and services to compete on a global scale. With the support of initiatives like the AEO program and the various trade agreements Lesotho participates in, there is significant potential for the nation to expand its economic footprint.
Lesotho’s involvement in agreements like the AfCFTA also holds promise. This agreement, which seeks to create a single market for goods and services across Africa, could open doors for Lesotho’s traders to access a market of over 1.3 billion people. Similarly, SACUM-UK EPA provides access to the United Kingdom’s market, offering opportunities for Basotho businesses to export textiles, agricultural products, and other goods.
While the potential loss of AGOA presents challenges, it also highlights the importance of diversification in trade partnerships. By leveraging existing agreements and adhering to international standards, Basotho businesses can continue to thrive in the face of global uncertainties.
On behalf the symposium attendees and business owners, Sam Mphana thanked the RSL for the insightful engagement, stating that the AEO program shows the importance of voluntary compliance from tax payers, especially business owners.
The future of Lesotho’s economy lies in the hands of its entrepreneurs, manufacturers, and traders. With the right strategies, partnerships, and commitment to quality, the nation can mitigate the impact of AGOA’s uncertainty and chart a path toward sustainable economic growth.
RSL’s message is clear: Basotho must embrace the opportunities presented by other trade agreements, align with global standards, and work collectively to unlock the nation’s full economic potential. By doing so, Lesotho can strengthen its position as a competitive player in the global trade arena, ensuring a brighter future for its people.