By: Thoboloko Ntšonyane
MASERU
Amid the global economic uncertainties, Lesotho stands to benefit under the Regional Value Chains Lesotho (RVCL+) project, supported by the European Union (EU) and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), is targeting high youth unemployment and economic vulnerability by developing two specific sectors: agro-processing and light manufacturing.
The EU is providing resources and technical expertise to support the development of the Micro, Small and Medium Enterprises (MSMEs), with the objective of improving their competitiveness and enabling them to exploit the SADC-EU Economic Partnership Agreement.
These sectors are seen as offering potential for Lesotho to diversify its economy and connect with both regional and international markets.
The SMMEs stand to explore sectors with export potential aligning with value-added production processes.
Under the RVCL+ initiative Basotho micro, small and medium enterprises (MSMEs) are being equipped to participate meaningfully in regional and international trade. The project targets agro-processing and light manufacturing, providing MSMEs with export opportunities in areas such as the production of indigenous herbs, spices, and rosehip for use in cosmetics and food, as well as the use of duck and geese feathers for making items like duvets and clothing.
These sectors have been identified for their potential to create jobs, add value to local raw materials, and diversify Lesotho’s export portfolio.
To qualify, MSMEs must be legally registered and actively operating within Lesotho, with demonstrable potential to scale and engage in exports. The project supports them through training in market intelligence, export readiness, and compliance with international standards. Over 60 producers have already received the training in the feather and down value chain in Maseru, while others are being equipped with technical skills and certification pathways to meet export requirements.
The Ministry of Trade has called on the small businesses to position themselves competitively. If successful, the initiative could help Lesotho withstand current economic pressures, while also building resilience and opening access to new markets.
Also, there is an initiative linked to the EU-SADC Economic Partnership Agreement (EPA), which came into force in 2016. The agreement gives Lesotho preferential access to European markets, enabling the country to expand its export base beyond diamonds and textiles. Strengthening regional value chains, particularly with South Africa and neighbouring countries, is viewed as a step towards broader market access, job creation and more stable economic growth.
The EU market is one of Lesotho’s export destinations receiving diamonds and garments. The EU Lesotho said in a statement that Lesotho is the EU’s second trading partner with a share of 16.5% and Lesotho reportedly exports 45% of its goods to that market.
According to the reports, as at 2023 Lesotho’s trade with the EU reached €408 million, approximately M8.9 billion.
The recent global economic developments, particularly actions taken by the US President Donald Trump, have sent shockwaves across the world. Lesotho has not been spared, having been hit with a 50% tariff. However, following numerous appeals by several countries negotiating for reduced tariff rates, Lesotho exports to the US Markets will be charged 10%, the arrangement which will last for 90 days.
The Minister of Finance Dr Retšelisitsoe Matlanyane previously urged the public to remain calm and not to panic. Meanwhile, the Minister of Trade, Industry and Business Development Hon Mokhethi Shelile revealed that next month, Lesotho will dispatch a delegation to engage in negotiations regarding the renewal of the Africa Growth and Opportunity Act (AGOA) which is set to expire this September.