WORLD TRADE
ORGANIZATIONWT/COMTD/IF/21
26 February 1998
(98-0785)
Committee on Trade and Development
Integrated Framework for Trade-Related
Technical AssistanceOriginal:  English
TRADE-RELATED TECHNICAL ASSISTANCE NEEDS-ASSESSMENT
PRESENTED BY LESOTHO
INTEGRATED RESPONSES BY IMF, ITC, UNCTAD,
UNDP, WORLD BANK AND WTO1
LESOTHO
                                                     
1Published pursuant to the provisions of paragraph 5 (e) of the Integrated Framework for Trade-Related
Technical Assistance (WT/LDC/HL/1/Rev.1).WT/COMTD/IF/21
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TABLE OF CONTENTS
1. ECONOMIC OVERVIEW
2. CURRENT TRADE AND INVESTMENT TRENDS
2.1 Trade trends
2.2 Investment trends
3. TRADE POLICY
3.1 The objectives of trade policy
3.2 Internal factors influencing policy reviews and formulation
3.3 External factors influencing policy reviews and formulation
4. TRADE POLICIES AND STRATEGIES
4.1 Expansion of industrial base for export growth
4.2 Increasing the domestic value-added content in export products through greater local
processing and utilisation of indigenous raw materials
4.3 Creation of a business environment conducive to economic growth
4.4 Training and development
4.5 Privatisation and deregulation
5. IMPORT REGIME
6. SUPPORT INSTITUTIONS
6.1 The Role of TPU
6.2 The Role of LNDC
6.3 The Role of BEDCO
6.4 The Role of the LCCI
6.5 The Role of LMA6.6 The Role of BAPS
6.7 The Role of WIB
7. WTO ISSUES
7.1 Coordinated African Programme of Assistance on Services (CAPAS)
8. TRADE PROMOTION AND TRADE SUPPORT SERVICES
8.1 Obstacles to trade expansion
8.1.1 Information technology
8.1.2 Access to credit
8.1.3 Design, quality and packaging
8.1.4 Marketing channels for exports8.1.5 Procurement of raw materials
8.1.6 Training
8.1.7 Standardization and quality assuranceWT/COMTD/IF/21
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9. MARKET ACCESS
9.1 Standards and quality
9.2 Rules of origin
9.3 The generalised system of preference (GSP)
10. TECHNICAL ASSISTANCE WITHIN THE PAST FIVE YEARS
11. SUMMARY OF TECHNICAL ASSISTANCE NEEDSWT/COMTD/IF/21
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TRADE-RELATED TECHNICAL ASSISTANCE NEEDS-ASSESSMENT
PRESENTED BY LESOTHO
1. ECONOMIC OVERVIEW
Lesotho's economy has shown considerable growth in the last five years.  Available estimates
indicate that 1996 was again a year of strong eco nomic growth.  Gross Domestic Product (GDP) grew
at 14 per cent as against 12 per cent and 9 per cent in 1994 and 1995 respectively.  This was duemainly to increased construction activities at the Lesotho Highlands Water Project, growth in the
manufacturing sector and recovery in agriculture.
The manufacturing sector will continue to be an important engine for growth of the economy
of Lesotho in the medium and long-term.  Its contribution to GDP rose from 10 per cent in 1991 to 15
per cent in 1994.  According to the economic projections, this trend is expected to be maintained in
the foreseeable future.
Inflation in Lesotho is estimated to be 8.5 per cent in 1996, compared with 8.9 per cent
in 1995.
Despite this remarkable performance, unemployment remains one of the most serious
problems facing Lesotho.  The rate of unemployment was last estimated at 30 per cent.
2. CURRENT TRADE AND INVESTMENT TRENDS
2.1 Trade Trends
TABLE 1
Merchandise Trade:  1991 - 1995 (Million Maloti)
1991 1992 1993 1994 1995
Imports, c.i.f.*-2320.2 -2683.3 -2931.3 -3093.3 -3667.8
Exports, f.o.b. 186.2 310.9 438.9 509.3 580.6
Trade gap -2134.0 -2327.4 -2492.4 -2584.0 -3087.2
Growth rate of trade gap 29.5 9.1 7.1 3.7 19.5
Exports as a percentage of imports, c.i.f. 8.0 11.8 15.0 16.0 15.8
Source:  Bureau of Statistics
*Imports figures shown above are for commercial imports, e.g. imports excluding donations of  food and clothing.
Although still on the deficit side as far as the current account is concerned, there has been
improvement because of increasing exports. There is cause for optimism as exports have increased
rapidly since 1986.
Lesotho is working towards overcoming its struct ural imbalance in the external trade.  The
Government is committed to reversing the trade deficit trend which has grown in absolute terms every
year since 1969.WT/COMTD/IF/21
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TABLE 2
Value of Exports by S.I.T.C. during 1991-1995:   (Million Maloti)
1991 1992 1993 1994 1995
Food and live animals 21.6 22.9 25.7 26.0 35.1
Beverages and tobacco - 1.9 - 2.2 1.6
Crude materials, inedible 16.9 19.5 22.3 32.2 34.6
Mineral fuels and related products - - - - 0.5
Chemicals and related products 2.9 1.7 0.5 2.6 6.9
Manufactured goods 10.2 9.6 13.4 10.1 13.1
Machinery and transport
equipment5.2 35.0 25.5 69.8 66.5
Miscellaneous manufactured goods 129.3  220.1 348.2 366.2 422.2
Commodities n.e.s. 0.1 0.2 3.3 0.2 0.1
TOTAL 186.2 310.9 438.9 509.3 580.6
Source:  Bureau of Statistics and Customs Department
The value of manufactured exports has risen following policies that have led to the
establishment of the new export-oriented industrial sector in Lesotho.  Other driving forces are the
establishment of a new Export Promotion Strategy, the introduction of a Comprehensive Export
Finance Scheme (EFS), continued inflows of fo reign investment, aggressive industrialisation
programme driven by the private sector and the development of new exportable products.  In the past
years, export goods were dominated by diamonds, wool and mohair which were exported raw, no
value added.  In recent years, the manufacturing sector, especially the clothing, footwear andelectronic sub-sectors have been the fastest growing sector of the economy.  For example,
manufactured goods rose from M.139,000,000  in 1991 to M.435,000,000 in 1995.
TABLE 3
Direction of Trade Exports F.O.B.:  1991-1995   (Million Maloti)
Region 1991 1992 1993 1994 1995
World 186.2 310.9 438.9 509.3 580.6
Africa 76.9 154.4 206.0  261.8 306.6
SACU 73.7 152.7 201.3 258.9 299.6
SADC 2.8 1.5 4.4 2.7 5.4
Other 0.4 0.2 0.3 0.2 1.6
Europe 55.9 72.3 82.6 53.2 54.3
EU 50.6 70.5 80.0 51.3 53.7WT/COMTD/IF/21
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Other 5.3 1.8 2.6 1.9 0.5
America 52.1 83.3 147.0 192.7 218.3
Asia 1.0 0.8 2.0 1.6 1.4
Oceania 0.3 0.1 1.3 - -
Source:  Bureau of Statistics and Customs Department
Table 3 reflects the relative importance of export markets over the period 1991-1995.  USA
exports grew from M.52,000,000 in 1991 to M.218,000,000 in 1995.  It further indicates that though
the South African Customs Union (SACU) still remains the major market, the USA and EU areincreasingly becoming important markets.  SACU, the traditional export market of Lesotho currently
absorbs less than 50 per cent of Lesotho exports.  In 1988 SACU absorbed 74 per cent of Lesotho
exports as compared to 46 per cent in 1993.  Hence, dependence on SACU market has been
drastically reduced.
2.2 Investment Trends
TABLE 4
Gross Domestic Product by kind of Activity
(As a Share of GDP at Factor Cost in per cent)
1991 1992 1993 1994 1995
Primary sector 14.2 10.4 12.9 13.7 9.5
Agriculture 13.6 10.0 12.3 13.1 9.1
Mining and quarrying 0.6 0.5 0.6 0.6 0.4
Secondary sector 36.6 38.7 37.7 39.9  44.3
Manufacturing 13.9 14.3 14.4 13.6 14.1
Electricity and water 0.9 1.3 1.3 1.2 1.1
 Building and construction 21.8 23.1 22.0 25.1 29.1
Tertiary sector 49.2 50.9 49.5 46.4 46.2
Wholesale and retail trade 8.3 8.6 8.6 8.6  8.0
Government 22.6 24.0 23.1 22.2 23.2
Other services 18.3 18.3 17.7 15.6 15.0
GDP at factor cost 100.0 100.0  100.0 100.0 100.0
Source:  Bureau of Statistics
Table 4 demonstrates GDP by kind of activity.  It shows relative importance of sectors.  Since
1990 the contributions of the manufacturing and construction sectors to GDP have been increasing
while that of the agriculture sector has been declinin g in relative terms.  This is an indication of the
importance of the manufacturing sector in contributi ng to employment as well as poverty reduction.WT/COMTD/IF/21
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3. TRADE POLICY
Two decades ago Lesotho's trade policy was not export-oriented but like in many developing
countries was influenced by a policy of protection of local industries and import substitution.  In
recent years, trade development policies have been based on broad objectives aimed at alleviation of
poverty through creation of employment opportunities and sustainable economic development.  Focus
has been directed at increasing export earnings and generating employment through industries whereLesotho has a competitive urge.
3.1 The Objectives of Trade Policy
- creation of employment opportunities through increased production of exports;- reduction of huge unfavourable balance of trade through expansion of exports;
- identification of new exportable products and new market outlets;  and
- development of indigenous entrepreneurship.
3.2 Internal Factors Influencing Policy Reviews and Formulation
The Ministry of Trade and Industry (MTI) carries out periodic reviews and impact
assessments of the trade policies in place.  The ma in objective of such efforts is to find out if the
existing policies are still addressing the needs of the business community and to simultaneously adjust
policies as far as possible to conform with the country's obligations in both regional and international
trade agreements.
In the process of trade policy formulation and review of existing ones, the MTI usually
consults intensively with the private sector organisations, academic institutions, and other
government, ministries and departments whose activitie s either directly or indirectly impact on trade
developments.  These include the Ministries of Agriculture, Law and Constitutional Affairs, Finance,
the Departments of  Sales Tax, Income Tax, Customs, the Central Bank of Lesotho (CBL) andNational Environment Secretariat (NES).
MTI further consults with service providing organizations such as, the Lesotho Electricity
Corporation (LEC), Water and Sewerage Au thority (WASA), Lesotho Telecommunications
Corporation (LTC) and Shipping and Forwarding Agencies.
3.3 External Factors Influencing Policy Reviews and Formulation
Lesotho is a member of SACU together with Botswana, Namibia, the Republic of South
Africa (RSA) and Swaziland.  Trade policy changes occurring within the framework of SACU
automatically influence the review of the national trade policy of Lesotho.  As SACU is currently
being re-negotiated, Lesotho's policies will be tailored in line with the outcome of re-negotiations.
SACU Agreement advocates free interchange of  goods between members, application of the
common external tariff and trade regulations to goods imported from outside the Common Customs
Area.  These major principles will be maintained in accordance with the WTO guidelines pertaining
to regional economic groups.  The new elements at the re-negotiated SACU will include schedules of
reduction on tariffs per WTO obligations of SACU members, competition regime, dumping and
countervailing procedures, industrialization policy and institutional arrangement.WT/COMTD/IF/21
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In the similar manner, the ACP/EU C onvention arrangements and SADC economic
integration policies will influence the future of Lesotho's trade policies.  In no small measure,
Lesotho's policies will also be influenced by her WTO obligations.
4. TRADE POLICIES AND STRATEGIES
4.1 Expansion of Industrial Base for Export Growth
Lesotho has developed a two pronged strategy to  expanding the industrial base for export
growth.  The Government has put in place policies and a comprehensive incentive package to attract
foreign direct, export oriented investment.
However, given the constraints in attaining a high rate of growth of formal sector
employment, the Government is also in the process of upgrading and improving the performance of
the Small, Medium and Micro Enterprises (SMMEs), including the craft sector.  Properly developed,
handicraft products have a potential of being a major source of foreign exchange earnings.  Small and
medium scale producers have been identified throughout the country for assistance the exportbusiness.  The export programme for the SMMEs has been proposed to the World Bank for support.
4.2 Increasing the Domestic Value-added Content in Export Products through Greater
Local Processing and Utilisati on of Indigenous Raw Materials
The fact that the formal manufacturing industry has provided for employment to the labour
force of 18,000 persons whereas the informal and small scale industries absorb approximately160,000 workers, the importance of SMMEs in achieving the national objectives of employment
generation and poverty reduction cannot be ignored.
The Government is committed to elevating the SMMEs to a high profile in its development
agenda since the majority of the indigenous investors are concentrated in this sector.  This
commitment is further articulated in the 6th National Development Plan.
In view of the fact that Lesotho has a limited base of natural resources, and the need to
enhance the productive capacity of the indigenous producers, the Government is pursuing the policy
of maximisation of the export potential of the c ountry's resource based industries, such as precious
stones, semi-precious stones, clay deposits, leather products and handicrafts.  Some success has been
attained in this endeavour through the establishment of clay based brick and ceramic tiles operations.
4.3 Creation of a Business Environment Conducive to Economic Growth
It is recognised that the success of Lesotho in attracting investment is dependent upon
creation of an enabling environment.  Efforts are being made to maintain political stability, good
governance, accountability, transparency and macro-economic management.
Other measures that have been adopted to further complement the above efforts include:- simplification of import/export procedures, removal of administrative barriers to trade
and investment, review of the export incentive package, and revision of investment
laws with the purpose to facilitate flow of foreign direct investment and external
trade;
- improving the efficiency, reliability and cost-effectiveness of utility services (water,
electricity and telecommunications);WT/COMTD/IF/21
Page 9
- maintenance of sound industrial relations.  The Government is forging constructive
industrial relations through the labour law enacted in 1993, which provides for
dispute settlement throughout tripartite arrangement made of the Government,
Employers' Associations and organised labour;  and
- establishing a "one stop shop" as an incentive to prospective export oriented
investors.
4.4 Training and Development
The Government has sought cooperation from international organisations such as the United
Nations Industrial Development Organisation (UNIDO) to support the initiative for developing human
resources in the field of foreign trade and trade-related services, formulation of trade policies and
procedures with a view to enhancing a conducive environment for business.  However, the proposed
support has not yet materialised.
4.5 Privatisation and Deregulation
The Lesotho Government is in the process of privatising state controlled enterprises and
services.  The objective is to introduce and pursue commercial trading and marketing practices whilst
improving the capacity of the private sector to engage in profitable and sustainable trade and
investment matters.
Crucial components of the strategy are among others:- encouragement of export-orientated agriculture and manufacturing production;
- fostering of labour intensive industrial growth;  and
- legislation reforms as well as deregulation of markets.
5. IMPORT REGIME
The main laws and regulations dealing with trade policy on exports and imports are the
Export and Import Control Act, 1988 and the Import Restrictions Regulations, 1988.  This legislation
is administered by MTI in controlling exports and imports of goods.
In terms of the Regulations, no person is allowed to import goods into Lesotho from outside
the Common Customs Area unless he/she is in possession of a valid import permit.  However, the
granting of an import permit is auto matic subject to fulfilment of certain reasonable requirements.  A
trader or manufacturer is simply required to be in possession of a valid licence and to import goods
that are relevant to his/her business operation.  Residents are also free to import reasonable quantities
for personal use.
There are no export bans in Lesotho except for protected Fauna and Flora and other
endangered species.  In case of import restriction or prohibition, there is control by permit ofimportation of goods such as firearms, chemicals and pharmaceuticals causing threat to human and
animal life and protected species by regional and international treaties to which Lesotho is a party.
6. SUPPORT INSTITUTIONS
The following are principal support institutions which play important roles in the
implementation of trade-related projects at the country level:
- Trade Promotion Unit (TPU);
- Lesotho National Development Corporation (LNDC);WT/COMTD/IF/21
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- Basotho Enterprises Development Corporation (BEDCO);
- Lesotho Chamber of Commerce and Industry (LCCI);
- Lesotho Manufacturers' Association (LMA);
- Business Advisory and Promotion Service (BAPS);
- Women in Business (WIB).
6.1 The Role of Trade Promotion Unit
TPU is an integral part of the Ministry of Trade and Industry.  It was established in 1978 with
a specific mandate to promote, co-ordinate and develop Lesotho's exports in international markets.  In
general, TPU is supposed to provide technical assistance and advisory services to the business
community.  Principal functions of TPU include:  dissemination of information on business
opportunities, responding to business inquiries;  facilitating participation of local business community
in international trade fairs in order to learn of  competing designs and innovations and to promote
Lesotho products internationally, assistance in product and market development and advising inpolicies and other measures that are conducive to export growth and development.
In addition to its promotional work, TPU administers on behalf of the Ministry, an Export and
Import Control Act 1988 and its Regulations.  In this regard TPU is responsible for processing of
import and export documents and issuance of import licenses/permits.
Need for technical assistance:- capacity building in monitoring changes in trade regimes of the leading markets:
SADC, North America, Europe and Asia among others;
- capacity building in product and market development;
- training in policy formulation;
- building capacity in information management and dissemination to the business
community;  and
- building capacity in equipping the business persons with knowledge of basic
requirements for successful export ventures.
6.2 The Role of Lesotho National Development Corporation
LNDC is the Lesotho Government's main agency for promotion and facilitation of medium to
large undertakings in the manufacturing, processing, mining and commercial sectors in the country.
In pursuit of this goal the main activity in recent years has been the promotion of Lesotho as an
attractive investment location for both foreign and domestic investors.
The main thrust of the present industrial development policy in the medium to large scale
industries is to broaden and deepen the existing industrial base.  This approach acknowledges that thesuccess of the industrial development strategy will have to be founded on the country's competitive
strengths and the careful exploitation of the unfolding opportunities and the concerted efforts to
rectify the inherent weaknesses in the internal operating environment.
Need for technical assistance:
- Establishment of a home page on the Internet and computerised Management
Information Systems (MIS)WT/COMTD/IF/21
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Given the current thrust of the LNDC and the prevailing international trends in
investment promotion, a key requirements for a more effective and aggressive
investment promotion campaign and hence the need for technical assistance, is the
establishment of the home page on the Internet.
In addition, technical assistance in the form of a computerised investor tracking
system for qualifying and managing investors database, from enquiries and hotprospects to actual commitments, would greatly enhance the LNDC's investment
promotion efforts.
- Technology assessment
Given the need to move up in the production chain to attract high value added
products, one of the key requirements is the in-house capability to identify and assess
and keep abreast of developments in technology especially for large scale labour
intensive industries that the LNDC is currently pursuing.
- Industrial linkages
One of the key elements in the current programme for sustainable industrial
development is the forging of linkages between the small indigenous enterprises and
the large, predominantly foreign owned enterprises.  The forging of these linkages
has been elusive for some time due to internal shortcomings.
6.3 The Role of Basotho Enterprises Development Corporation
BEDCO assist with the establishment and development of the Small Enterprises Sector in
Lesotho with emphasis on the promotion of indigenous entrepreneurial skills.  The main areas of
support offered by BEDCO include:
- provision of small factory units at quasi-commercial rental;
- short courses in woodwork;
- bulk purchasing for entrepreneurs in the woodwork sector;
- sub-contracting to woodwork entrepreneurs;
- training courses in sewing and knitting;
- training courses in book-keeping and business managements;- preparation of projects for entrepreneurs to access financing facilities at commercial
banks;
- business counselling and monitoring of on-going projects;
- machine hire facilities;  and
- marketing and product development.
Need for technical assistance by priority:
Capacity building by provision of technical expertise, training in quality control, training of
trainers, training modules and basic training equipments in the following areas by priority:
- woodwork;
- textile production/productivity trainer;
- leather products/design;
- metalwork.WT/COMTD/IF/21
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6.4 The Role of the Lesotho Chamber of Commerce and Industry
The LCCI as a private institution strives to be a catalyst in forging, promoting and protecting
the interests of the entire busine ss community within the frame-work of the broad economic policy of
the Government.  It aims to promote and encourage investment with a strong emphasis on the
participation of indigenous businessmen and to redirect the tradition of a service sector oriented
economy to an industrial oriented economy.  The LCCI aims at:
- promoting cooperation among businessmen in Lesotho on all matters involving their
interest;
- promoting harmonious relations between large and small entrepreneurs through sub-
contracting arrangements;
- participating effectively in the formulation of business legislation;
- collecting and disseminating information and statistics on all matters or general
mercantile interest;  and
- promoting dialogue with public authorities, other organizations similar and
individuals on all subjects of mercantile interest.
Need for technical assistance:
- training in import and export management skills and in negotiation of joint ventures
with foreign partners;
- capacity building in training the clientele in business start-up and management;
- industrial building;
- capacity building in design of bankable projects;
- information dissemination skills and infrastructure;  and
- capacity building in identifying business opportunities for the clientele.
6.5 The Role of Lesotho Manufacturers' Association
The main purpose of this private association is to promote business and cooperation among
the entrepreneurs in Lesotho, especially the small-scale manufacturers and other related service
enterprises.  The association aims as:
- influencing formation of legislation and regulations;
- creating an enabling environment for the small scale manufacturers;
- assist small manufacturers in quality production;
- assisting members with services deemed necessary for the improvement, promotion
and strengthening of the members' enterprises training, marketing, information and
credit;  and
- contributing principally in the reduction of unemployment through the creation of
jobs, apprenticeship, vacation employment as well as on-the-job training within the
small-scale manufacturing and related service enterprises.
Need for technical assistance:
- establishing a training and production factory centre for the clientele aiming at
disciplines of quality control, designs and marketing;
- support in advising services pertaining to exports;WT/COMTD/IF/21
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- establishment of a facility for bulk procurement for the clientele which is small to
individually enjoy benefits of discount accruing from bulk purchasing.  The facility
can also assist as a wholesaling outlet for members;
- training in market development and responding to market signals;
- training in assisting members to access financial facilities through formulation of
bankable projects;  and
- capacity in promoting the clientele products in the international market.
6.6 The Role of Business Advisory and Promotion Service
BAPS is one of the components of the Industries and Agro-industries Development Project
supported by the World Bank and Lesotho Government since 1991.
The original mandate of BAPS was confined to information dissemination to entrepreneurs on
services available from the network of support organizations and building linkages between local
enterprises and the Lesotho Highlands Water Project (LHWP), larger foreign investment companiesand Government procurement programmes.  However, the mandate of BAPS was broadened in 1992
to deal with fundamental weaknesses in the support systems for the development of the Basotho
private sector.
The role of BAPS now falls into the following five categories:
- being an APEX organization responsible for coordination of activities of the other
support organizations;
- pioneering new ways to develop the private sector;
- as a provider of last resort of some development services;
- providing advisory services to entrepreneurs and referral services to the network of
support organizations through establishment of Business Information Centres (BICs);and
- assisting the Ministry of Trade and Industry on policy determinations and special
tasks meant to support development of the private sector especially in the areas of
market research and coordination of activities of the support institutions.
Need for technical assistance:- recognising that the World Bank support will phase out by the end of 1997 and that
BAPS challenges of coordinating information from all support institutions with a
purpose to make it readily available to the business community, assistance is required
for enabling BAPS to efficiently man the three newly established Business
Information Centres (BICs);
- the technical capacity of BAPS for strengthening business support institutions and
assisting them in rationalising their activities need to be increased;
- BAPS need to be strengthened in conducting research in the areas of marketing,
financially sound productive investment by the small and medium enterprises and
mutually benefitting joint ventures (linkages) between large foreign companies and
local small and medium enterprises;  and
- ability of BAPS to conduct diagnostic analysis of the problems pertaining to start-up,
expansion and sustainability of business enterprises, especially small and medium
operations should be improved.  This will assist Government and all support
institutions to make timely and appropriate interventions.WT/COMTD/IF/21
Page 14
6.7 The Role of Women in Business
WIB was founded in July 1989.  This organization was launched with a purpose of addressing
gender related barriers pertaining to setting up and developing business.
As such, WIB aims to assist emerging rural and urban women entrepreneurs to overcome
problems they encounter in order to be successful, and to provide relevant and useful information to
women who intend to enter into new business.  In particular, WIB is keen to concentrate its activities
on meeting the needs of the rural women in Lesotho.  As 40 per cent of the male population are
employed in the mines of South Africa, it is women entrepreneurs who dominate the private sector at
micro and small level.
Objectives:
- to provide members with access to relevant and useful business training, directly or
through other organizations;
- to facilitate business networking, the sharing of information and experiences within
Lesotho, regionally and internationally;
- to assist members with access credit to sources such as WIB's revolving fund and
facilities available at commercial banks;
- to work together with other women's organizations locally and internationally in order
to develop business and trading links, to contribute through international
projects/conferences by addressing key women's issues, and to learn from theexperiences of other women;  and
- to undertake projects on behalf of members, often with other agencies and
government.
Need for technical assistance:
- expertise is needed in counselling and advising WIB members on feasible and
sustainable projects
- establishing information systems and monitoring mechanism of performances of the
businesses of the clientele;
- capacity building in training on business management, costing and marketing;
- there is need to equip the organization with skills in operating micro finance facilities
including revolving funds;
- initial capital support for a nucleus/care staff to manage the affairs of the
organization;
- study tours and attachments to similar organizations in African and other part of the
world to acquire experience and skills in servicing the clientele;  and
- training of trainers in development of guidelines for managing SMMEs and
interpreting such guidelines to the clientele.
7. WTO ISSUES
Lesotho is a founder member of the WTO.  In  preparing itself to comply with the WTO
Agreements, MTI which is responsible for coordinating WTO affairs has set up a WTO Coordinating
Committee comprising senior officials in the Ministry to attend to WTO matters, in particular,
preparation of notifications.  Besides handling WTO matters, these officers have numerous
responsibilities.
Furthermore, the Ministry in its endeavour to sensitize and create awareness of the WTO
framework, is in the process of launching the National Steering Committee which will comprise all
relevant government agencies including the private sector.WT/COMTD/IF/21
Page 15
The state of familiarity with the WTO multilateral trading system among government and
government-related agencies and private sector is very limited.  However, efforts to create public
awareness through workshops and seminars are being pursued.
Given the challenges surrounding the implementation of WTO Agreements, technical
assistance to address the question of human resources and institutional capacities in order to be able to
oblige as well as monitor international trade development and mount appropriate strategies to managethese changes is required.
Therefore, technical assistance is needed in order to:
- enhance human and institutional capacities of both WTO Coordinating Committee
and the envisaged National Steering Committee;
- assist and provide guidance to the Ministry of Trade and Industry to lead all sectors of
the economy in meeting other WTO notification obligations;
- build negotiating capacities both in bilate ral and multilateral arrangements to enable
Lesotho to participate effectively in the on-going negotiations in Trade-in-Services;
- develop trade policies such as competition and technology transfer policies;  and
- enhance skills and knowledge in the areas of market access, agriculture, anti-dumping
rules, subsidies and safeguards.
7.1 Coordinated African Programme of Assistance on Services (CAPAS)
The MTI had lodged a formal request with UNCTAD to launch CAPAS Project in Lesotho.
This is a capacity-building programme of technical assistance to African countries aimed at
developing capacity for domestic and international trade policy-making in the field of services.
The principal objective of CAPAS is to provide African countries with tools for assessing and
reforming national policies on services in conjunction with the regional and global integration of theircountries through service trade agreements, including their integration through the General
Agreement on Trade-in-Services (GATS) negotiated as part of the WTO multilateral framework.
CAPAS is coordinated jointly by UNCTAD a nd UN-DDSMS (New York) and is funded by
the Carhegie Corporation of New York, IDRC-Canada and the French Government.
The introduction of this project in Lesotho is crucial, particularly because this is a new and
complex agreement in the WTO.
The project will enhance our competence to participate efficiently in the on-going
negotiations on GATS Agreement and will also assist us to assess and reform national policies
pertaining to services if need be.
8. TRADE PROMOTION AND TRADE SUPPORT SERVICES
8.1 Obstacles to Trade Expansion
The following are the main bottlenecks inhibiting the development of sustained export
capacity of goods and services:  inadequate infrastructural facilities;  limited human resources and
institutional capacities;  limited export base;  lack of modern technology;  lack of quality control and
standards;  lack of working capital and access to credit by local entrepreneurs in particular the
SMMEs;  low quality of products;  lack of modern designs;  presentation and packaging of products;WT/COMTD/IF/21
Page 16
products development;  market development;  inadequate collection and dissemination of trade
relevant business information;  lack of export cu lture especially among indigenous entrepreneurs and
little experience in export business;  and uncoordinated training facilities.
8.1.1 Information Technology
Lesotho SMMEs have inadequate or even poor access to information on existing international
market opportunities.  This has effectively limited the "window of opportunity" of SMMEs andtherefore their ability to capture a comparatively greater share of the international market.  The
sector's inability to gain timely information on international markets and their characteristics and
specific needs has played a significant role in keeping the production base of the sector small and
narrow.
The support institutions who have responsibility to facilitate and provide effective, timely and
up-to-date information for the enterprise sector on export/import business opportunities, namely TPU
and BAPS, are not adequately equipped to carry out this function effectively.
In order to communicate effectively with other business players in the international markets
and to gain access to information on import and export opportunities and other business related news,
technical assistance is required to strengthen the TPU, LNDC and BAPS by establishing an
information centre that caters for the needs of th e export oriented business community.  Ideally the
information centre should have available:  up-to-date information on hard copy such as businessdirectories, magazines and trade bulletins.  Currently, information that exists is outdated and
insufficient.  There is need for computer based databases and CD Roms containing information on
international trade markets and;  the Internet and Internet based trade networks, such as GTPNet,
should form an integral part of the information ne twork.  These currently do not exist mainly because
of financial constraints.  This service is particularly important to SMMEs, who individually do nothave the financial resources to purchase computers and to be connected to the Internet.
8.1.2 Access to Credit
The reluctance of the formal financial institut ions to extend credit to the SMME sector and
the inability of SMMEs to access existing export finance schemes means that the sector as a whole is
unable to inject the necessary capital to expand production for exports.  The sector is often perceivedas risky by financial institutions and yet it is unable to offer collateral security.
In this view, there is need for the establishm ent of lending schemes.  Technical assistance is
required for these schemes to be self-sustaining.  So far in Lesotho, there is no "stand alone"
institution that has succeeded in information sector lending, thus the need for technical and human
resources capacity building.
8.1.3 Design, Quality and Packaging
A study undertaken by BAPS indicated that in order to promote exports from the SMME
sector, there is a need to improve the design, quality and packaging of SMME products to create
demand for such products from foreign buyers.  Although efforts have been initiated under the BAPS
and New Ideas for Export Development Aid (NIEDA) to start addressing design, quality and
packaging problems, the programme has not yet taken of f due to lack of resources.  Therefore, there is
still need for technical assistance to strengthen these factors in order to promote SMME sectorexports.WT/COMTD/IF/21
Page 17
8.1.4 Marketing Channels for Exports
The indigenous export community in Lesotho is composed mostly of craftsmen scattered
throughout the country.  They work with various product categories.  They rarely work in
communities and cooperations, most of them work on their own.  This is a contributing factor that has
made it more difficult and costly to concentrate assistance in specific product groups.
These small scale producers do not have the organisational structures and expertise to enter
export business and be efficient in developing markets for export.  They lack adequate knowledge of
the technicalities involved in marketing abroad si nce they produce mainly for the domestic market.  It
is one thing to sell domestically, or in the neighbour ing SACU market, and another to sell in overseas
markets which are highly competitive and offer real potential for export growth.
The problem underscored hereabove can be solved through technical assistance to strengthen
and promote specialised marketing mechanisms such as, trading companies, export houses, export
consortia and the like.  These bodies will become very useful tools to support the export activities ofthe SMME sector.
8.1.5 Procurement of Raw Materials
The fact that SMMEs purchase raw materials at high prices, as a result of their inability to
engage in bulk procurement and lack of information on sources and comparative prices of raw
materials suppliers, contributes towards high production costs that are characteristic of the sector andaffects the sector's ability to offer competitive prices in international markets.
Technical assistance is required to facilitate and encourage the establishment of a specialized
marketing mechanisms within the private sector.  It is envisaged that this specialised marketing
mechanism will be manned by qualified local people and/or attract foreign trading companies to carry
out this function.
8.1.6 Training
Training is required at four levels in order for Lesotho as a whole to significantly increase
exports.  Training is required at the policy level, level of support of support institutions, enterprise
level and training institutions level.  Policies need to be strengthened to encourage both foreign and
indigenous investment and export growth.  Competenci es in the areas of strategic export planning and
execution need to be strengthened both at the support institution and enterprise level.
There is a need for technical assistance to build practical advisory skills in the field of export
promotion, that is, product development, quality a nd design, production of publications and research
to inform and assist enterprises in their export endeavours.
8.1.7 Standardization and Quality Assurance
The MTI has recently established a Standards and Quality Assurance Division manned mostly
by new recruits.  The Division is generally expected to:
- assist companies establish and implement sound and cost effective quality assurance
systems and also to introduce a standards and quality assurance legal framework and
institutional framework to oversee and coordinate all standardization activities.WT/COMTD/IF/21
Page 18
- increase its share of export market, and boost employment.  Lesotho needs to adopt
strategies that will allow for competitive production in terms of quality and cost.
In order to achieve this objective, the Division requires:
(a) Erection of a building which will accommodate the following laboratories:
- material testing laboratory and equipment for testing leather and leather
products and textiles and clothing products;
- chemical laboratory and equipment for testing pharmaceuticals, food and
agricultural products;
- electrical laboratory and equipment for testing electronic products and
electrical commodities;
- mechanical laboratory and equipment for testing force, tensile strength and
crush test;  and
- legal metrology laboratory and equipment for testing mass (E2 class),
pressure, temperature, current and volume.
(b) Technical training in quality assurance, quality management and metrology.
9. MARKET ACCESS
Lesotho's major export markets as indicated earlier are the Southern African Customs Union,
North America and the European Union.  The main market access problems faced by Lesotho are in
the following areas:
9.1 Standards and Quality
The inability of local indigenous manufacturing enterprises to meet the quality standards set
in international markets.  The sophistication of these markets limited knowledge regarding changes in
tastes and lack of market intelligence in general pose problems particularly for small and mediumproducers to access international markets of No rth America and the European Union.  Large
companies manage all these factors well because they have physical presence in terms of officers and
representatives in such markets.
9.2 Rules of Origin
Lesotho has a limited base of natural resources, as a result, it imports most of its raw materials
for manufacturing.  This has led to difficulties in gaining access to international markets, specifically
the European Union, on a preferential basis accorded to Least Developed Countries (LDCs) because
Lesotho is unable to meet the stringent Rules of Origin.  As a result of this constraint, Lesotho
manufacturers are accorded derogation which also limits the opportunity for Lesotho exporters to
expand their market share because of quantitative restrictions imposed by the derogation rules.
9.3 The Generalised System of Preference (GSP)
It has proved difficult for some product lines to gain access to the USA market as a result of
the GSP system.  Under GSP, cumulative production is not recognised and since Lesotho often has to
import raw materials and semi-finished goods, for export, manufacturers have difficulties in meeting
the stipulated value added content in order for their goods to have originating status.WT/COMTD/IF/21
Page 19
Lesotho has entered into bi-lateral trade agreements and relations with a number of countries
with the objective of promoting intra-regional trad e and cooperation.  It is in such countries where
Lesotho's products and services enjoy either duty free access or preferential tariff treatment.
10. TECHNICAL ASSISTANCE WITHIN THE PAST FIVE YEARS
Several projects have been undertaken within the past five years that are related to or aimed at
strengthening trade.  These include:
The Lesotho Government and UNDP/UNCDF -
Small Scale Enterprises Project SSEP (on going)
The aim of this project is to encourage employment generation and poverty alleviation by
facilitating the development of indigenous small and micro scale enterprises.  The project is a credit
guarantee facility under which small and micro scale enterprises are extended loans from Lesotho
Bank funds and the project guarantees these loans.
The objectives of the project also include, enhancing the technical and management
capabilities of Lesotho Bank and agents in loan appr aisals and credit extension services to small and
micro scale industries.
The Lesotho Government and UNIDO –
Small and Medium Industry Development and Informal Sector Promotion Programme (on
going)
This project aims at supporting the efforts of the Government to strengthen support facilities
in both the public, non-governmental and private sect ors as well as by developing a closer working
relationship between the Government and private sector organizations.
The project is currently focusing on building a database on the small and micro enterprises;
strengthening the capacity of support institutions;  and assisting Government to strengthen policies forthe development of the SMME Sector.
Food and Agricultural Organization (FAO) Project -
Assistance to Establish a Food Control System in Lesotho (on going)
The aim of the project is to assist in establishing a National Food Control System in order to
ensure the quality, safety and nutritional values of food for human consumption including streetfoods.
SADC Project -
SADC Quality Management/Quality Assurance (on going)
The project seeks to promote quality by training a team of employees in quality assurance to
motivate and enable them together with the quality manager to implement quality systems in theircompanies.
11. SUMMARY OF TECHNICAL ASSISTANCE NEEDS
In order for Lesotho to achieve sustainable socio-economic development in the advent of
trade liberalization, there has to be a greater focus towards export growth and expansion andWT/COMTD/IF/21
Page 20
improving substantially on productive capacities of the local small and medium enterprises in
particular.  To achieve this socio-economic objective, there is a need for technical assistance in the
following areas:
(a) The establishment of a Trade Information Centre (TIC) that will have available, the right,
timely and cost-effective information.  In order to  network with the rest of the world in trade
matters.  To facilitate information exchange, internationalism and globalization of business,the Internet should form an integral part of the TIC connecting TPU, LNDC and BAPS and its
BICs, LMA, the Consumer and Standards Divisions within MTI to the network.
The establishment of a Trade Point that will connect Lesotho to the GTPNet is crucial and
should also form an integral part of the TIC.
(b) Capacity building of the WTO Coordinating Committee and the envisaged National
Committee to effectively execute responsibilities pertaining to WTO and also the
implementation of the CAPAS project aimed at developing capacity for domestic andinternational trade policy-making in the field of services.
(c) Long-term and short-term consultancies to firstly, evaluate the current trade promotion
support structure existing in Lesotho and its effectiveness based on this assessment, to assist
Lesotho to build a comprehensive and holistic productivity and productive capacities and
Export Promotion Strategy.  The export strategy should lead to an integrated mix ofinterventions necessary for promoting successful international trade including provision of:
- services, such as product development, design, packaging and production of
promotional material such as brochures and export directories;  and
- services geared towards market development and penetration, including publication
of newsletters, informing enterprises of market opportunities, market research,facilitating the participation of enterprises in trade missions and trade exhibitions.
(d) Building capacity through intensive training.  Training is required at four levels, namely, at
the policy formulation, enterprise operation, at support institutions and training institutions to
enable strategic planning and execution of international trade business.  Lesotho has limited
technological and human resources capacities in the new information/communicationtechnology tools such as CDRom and the Internet.  Technical assistance is required to
enhance these capacities.
(e) Establishment of export oriented lending/financial schemes particularly for the SMMEs.
(f) Strengthening the quality of Lesotho's made products and the ability to meet and conform to
international standards by strengthening the human and institutional capacities of theStandards and Quality Assurance Division.
(g) Establishment of specialised marketing channels, e.g.  trading companies, export houses and
export consortia.
(h) Strengthening the human and institutional capacities of support institution in order to promote
exports from their member entrepreneurs.
(i) Establishment of a bulk procurement facility that will enable the SMMEs to procure raw
material and other required inputs at competitive prices.WT/COMTD/IF/21
Page 21
(j) Forging industrial linkages between SMMEs and large-scale industries in order to increase
local content of high quality products and to encourage strong and internationally competitive
clusters and hence improve Lesotho's access to international markets.
(k) Establishing in-house capabilities to assess and encourage appropriate technology to graduate
Lesotho into higher valuer added products.
(l) Establishment of a training manufacturing factory for quality control, design, market-driven
production, sub-contracting between the SMEEs and large commercial entities and export
strategies.
(m) Training of LCCI, LMA, WIB, BEDCO and BAPS in facilitating access to financial facilities
available at commercial banks by the SMMEs.
(n) Establishment of a micro financing scheme for the start-up and graduation of the SMMEs so
foreign trade policies targeted at the new regional and global trade developments.
(o) Institutionalization, rationalization and coordination of training programmes pertaining to
business start-ups and management.
(p) Finally, specific technical needs pertaining to each support institution warrant consideration
and support.WT/COMTD/IF/21
Page 22
INTEGRATED RESPONSES BY IMF, ITC, UNCTAD,
UNDP, WORLD BANK AND WTO
LESOTHO
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 7:
WTO Issues
- Enhance human and institutional
capacities of both WTO Coordinating
Committee and the envisaged National
Steering Committee.WTO 1.With respect to strengthening human
resources the following will be done by theWTO
- Regional specialized workshops on
specific WTO agreements will be organized
for English-speaking African Least-Developed countries in 1998 and 1999.
- A three-week trade policy course for
English-speaking least-developed countries
(including Lesotho) will be held in 1998 and1999.
- Assist and provide guidance to the
Ministry of Trade and Industry to lead all
sectors of the economy in meeting otherWTO notification obligations.WTO With respect to implementation of the WTO
Agreements:
Assistance will be provided to Lesotho for
the drafting/alignment and notification of itsown legislation in conformity with its WTOobligations.
ITC/
UNDPUNDP and ITC will, through the newly
designed project LES/97/005 “Trade
Opportunity for Job Creation and Economic
Growth", assist the Government in exploringpossibilities for trade and investment
promotion through a better understanding of
the WTO Agreements.  In addition, the
project will upgrade the capacity of
Lesotho's trade/commercial representationabroad and will assist in the establishment of
an advisory committee.WT/COMTD/IF/21
Page 23
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 7:
WTO Issues (cont.):
- Build negotiating capacities both in
bilateral and multilateral arrangements to
enable Lesotho to participate effectively in
the on-going negotiations in trade in
services.UNCTAD Workshops and semina rs will be organized
in direct support to WTO negotiating
process, including negotiations in trade inservices.
*
WTO The three week trade policy course will
reinforce Lesotho's negotiating capacities.During this course training will be
undertaken to enhance Lesotho's
participation in multilateral trade
negotiations including those on trade in
services.
ITC/UNDPSame as above.
- Develop trade policies such as
competition and technology transfer
policies.
- Enhance skills and knowledge in the areas
of market access, agriculture, anti-dumping
rules, subsidies and safeguards.WTO See above.
World Bank/
WTORegional Seminar on Trade Policy
Institutions and their economic rational, tobe held in February 1998.
7.1 Coordinated African Programme ofAssistance on Services (CAPAS)
- The Ministry of Trade and Industry has
lodged a formal request with UNCTAD to
launch CAPAS Project in Lesotho.UNCTAD Lesotho is now a CAPAS participating
country and has already benefitted from
CAPAS activities.
                                                     
*Funds are requested.WT/COMTD/IF/21
Page 24
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho needs-assessment: Chapter 6:
support institutions which play a role in the
implementation of trade-related projects at
the country-level:
their technical assistance needs
a) The Trade Promotion Unit (TPU)
Capacity building in monitoring changes in
trade regimes of leading markets; SADC,North America, Europe and Asia among
others.UNCTAD The TRAINS CD-Rom which contains
information on the main trading regimes isprovided.
Capacity building in product and marketdevelopment.ITC See under c), d) and e) of this Chapter.
Training in policy formulation.
Building capacity in information
management and dissemination to the
business community.ITC/
UNDPSee under Chapter 7 above.
Building capacity in equipping the business
persons with knowledge of basic
requirements for successful export.ITC See above and under points c), d) and e) of
this Chapter.
b) The Lesotho National DevelopmentCorporation (LNDC)
- Establishment of the home page on the
Internet and computerised Management
Information Systems (MIS).
- Given the current thrust of the LNDC andthe prevailing international trends in
investment promotion, a key requirement
for a more effective and aggressive
investment promotion campaign- and hence
need for technical assistance- is theestablishment of the home page on the
Internet.
- Technical assistance in the form of a
computerised investor tracking system forqualifying and managing investors data
base, from inquiries, hot prospects, to actual
commitments, would greatly enhance theLNDC's investment promotion efforts.WT/COMTD/IF/21
Page 25
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 6
(cont.):
- Technical assistance related to technology
assessment;  given the need to move up in
the production chain to attract high value
added products, one of the key requirementsis the in-house capability to identify and
assess and keep abreast of developments in
technology, especially for large scale labour
intensive industries that the LNDC is
currently pursuing.
- Technical assistance related to industriallinkages.  One of the key elements in the
current programme for sustainable
industrial development is the forging of
linkages between the small endigenous
enterprises and the large, predominantly
foreign owned enterprises.  The forging of
these linkages has been elusive for sometime due to internal shortcomings.ITC Some assistance in business networking,
joint ventures promotion, subcontracts and
legal aspects of foreign trade is foreseen
under a planned new project which is being
discussed with the Government and which is
complementary to Project LES/97/005 underChapter 7.
*
c) The Basotho Enterprises DevelopmentCorporation (BEDCO)
Capacity building by provision of technicalexpertise, training in quality control,
training of trainers, training modules and
basic training equipments in the followingareas by priority:
- Woodwork
- Textile Production/Productivity Trainer
- Leather Products/Design- MetalworkITC Selected leather sector enterprises will
participate in buyers-sellers meetings under
the Intra-African trade promotion
programme.
d) The Lesotho Chamber of Commerce andIndustry (LCCI)
- Training in import and exportmanagement skills and in negotiation ofjoint ventures with foreign partners.
                                                     
*Funds are requested.WT/COMTD/IF/21
Page 26
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 6
(cont.):
- Capacity building in training the clientele
in business start-up and management.ITC Lesotho is benefiting from the Global
Competitiveness and Trade Tutor Building
Programme, in the field of Human ResourceDevelopment for trade expansion.
- Industrial building.
- Capacity building in design of bankableprojects.UNDP A major credit scheme targeting small scale
enterprises has been ongoing since 1992with the financial support of UNDP and
UNCDF (in collaboration with UNIDO)
through the Lesotho Bank.
In addition, the project LES/94/005 will
assist the Government to better target its
assistance to SMEs.  This project has
already trained NGOs in the provision ofmicro credit.
- Information dissemination skills andinfrastructure.ITC Information on current world market prices,
commercial data and trends of selectedproducts is being and will continue to beprovided under ITC Market News Service.
- Capacity building in identifying businessopportunities for the clientele.ITC See above under d) and point c).
UNDP See above under d).
e) The Lesotho Manufacturers Association
(LMA)
- Establishing a training and productionfactory centre for the clientele aiming atdisciplines of quality control, design andmarketing.
- Support in advising services pertaining toexports.ITC Advice on strengthening trade support
services will be included in the futureproject.
*
                                                     
*Funds are requested.WT/COMTD/IF/21
Page 27
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 6
(cont.) :
- Establishment of a facility for bulk
procurement for clients which are too small
to individually enjoy the benefits ofdiscount accruing from bulk purchasing.
The facility could also serve as a whole-
sailing outlet for members.
- Training in market development andresponding to market signals.ITC See under c) and d) of this Chapter.
- Training in assisting members to access
financial facilities through formulation ofbankable projects.UNDP See above under d).
- Capacity in promoting the clientele's
products in the international market.ITC See above with regard to selected products
(agro-based and leather).WT/COMTD/IF/21
Page 28
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 6
(cont.) :
f) The Business Advisory and Promotion
Service (BAPS)
- Recognising that the World Bank supportwill be phased out by end of 1997 and thatBAPS challenges of coordinating
information from all support institutions
with a purpose to make it readily available
to the business community, assistance is
required for enabling BAPS to efficientlystaff the three newly established BusinessInformation Centres (BICs).
- The technical capacity of BAPS tostrengthen business support institutions and
to assist them in rationalising their activities
needs to be increased.
- The BAPS needs to be strengthened toconduct research in the areas of marketing,
financially sound productive investment by
the small and medium enterprises and a
mutually benefiting joint ventures (linkages
between large foreign companies and localsmall and medium enterprises.
- Ability of the BAPS to conduct diagnostic
analysis of the problems pertaining to start-
up, expansion and sustainability of business
enterprises, especially small and medium
operations, should be improved.  This will
assist the Government and all support
institutions to make timely and appropriateinterventions.
g) Women in Business (WIB) ITC Selected issues aimed at improving the
environment of women in business
development will be discussed with the
Government for inclusion in the new
technical cooperation project.*
(See Chapter 6 b))
                                                     
*Funds are requested.WT/COMTD/IF/21
Page 29
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 6
(cont.) :
- Expertise is needed in counselling and
advising WIB members on feasible and
sustainable projects.UNDP See above under d).
- Establishing information systems and a
monitoring mechanism of performances ofthe business of the clientele.UNDP See above under d).
- Capacity building in training on business
management, costing and marketing.UNDP See above under d).
- There is need to equip the organisation
with skills in operating micro finance
facilities including revolving funds.UNDP See above under d).
- Initial capital support for a core staff to
manage the affairs of the organisation.
- Study tours and attachments to similar
organisations in African and other part of
the world to acquire experience and skills inservicing the clientele.
- Training of trainers in development ofguidelines for managing SMMEs and ininterpreting such guidelines to the clientele.WT/COMTD/IF/21
Page 30
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 8:
Trade Promotion and Trade support
Services
In order to communicate effectively with
other business players in the international
markets and to gain access to informationon import and export opportunities and
other business related news, technical
assistance is required to strengthen the
TPU, LNDC and BAPs by establishing an
information centre that caters for the needsof the export oriented business community.ITC See under b) and d) of Chapter 6 above.
There is need for the establishment of
lending schemes.  Technical assistance is
required for these schemes to be selfsustaining.UNDP See under d) of this Chapter above.
World Bank
(IDA)Is providing Line of Credit through Lesotho
Bank in the World Bank Industry and Agro-Industries Project.
Although efforts have been initiated under
the BAPs and New Ideas for Export
Development Aid (NIEDA) to start
addressing design, quality and packaging
problems, the programme has not yet takenoff due to lack of resources.  Therefore,
there is still need for technical assistance to
strengthen these factors in order to promoteSMME sector exports.ITC See all ITC entries under Chapter 6.
Technical assistance to strengthen and
promote specialized marketing mechanismssuch as, trading companies, export houses,
export consortia and the like.WT/COMTD/IF/21
Page 31
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment: Chapter 8
(cont.):
Technical assistance is required to facilitate
and encourage the establishment of a
specialized marketing mechanisms within
the private sector.  It is envisaged that this
specialised marketing mechanism will bemanned by qualified local people and/or
attract foreign trading companies to carry
out this function.ITC To be further discussed with Government.
(See the planned new project under Chapter6 b).)
Technical assistance to build practical
advisory skills in the field of export
promotion, that is product development,
quality design, production of publications
and research to inform and assist enterprisesin their export endeavours.ITC See all ITC inputs under Chapter 6.
In order to achieve its objectives, the
Standards and Quality Assurance Division
of the Ministry of Trade and Industryrequires:
a) Erection of a building which will
accommodate the following laboratories,
- Material testing laboratory and equipment
for testing leather and leather products and
textiles and clothing products
- Chemical laboratory and equipment for
testing pharmaceuticals, food and
agricultural products
- Electrical laboratory and equipment for
testing electronic products and electricalcommodities
- Mechanical laboratory and equipment for
the testing of force, tensile strength and
crush test
- Legal Metrology laboratory and
equipment for testing mass (E2 class),pressure, temperature, current and volume.
b) Technical training in quality assurance,quality management and metrology.ITC Quality assurance activities covering
advisory services, databases and  trainingwill be included as important components ofthe new project.WT/COMTD/IF/21
Page 32
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment:
Chapter 11:
Summary of technical assistance needs
a) The establishment of a Trade Information
Centre (TIC) that will have available, theright, timely and cost-effective information.
b) Capacity building of the WTOCoordinating Committee and the envisaged
National Committee to effectively execute
responsibilities pertaining to the WTO andalso to the implementation of the CAPAS
project aimed at developing capacity for
domestic and international trade policy-making in the field of services.UNCTAD See 7.1 above.
WTO See Chapter 7.
c) Long-term and short-term consultancies
to firstly, evaluate the current tradepromotion support structure existing in
Lesotho and its effectiveness based on this
assessment, to assist Lesotho to build a
comprehensive and holistic productivity
and productive capacity and ExportPromotion Strategy.  The export strategy
should lead to an integrated mix of
interventions necessary for promotingsuccessful international trade.WT/COMTD/IF/21
Page 33
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment:
Chapter 11 (cont.):
d) Building capacity through intensive
training.  Training required at four levels,
namely, at the policy formulation,
enterprise operation, at support institutions
and training institutions to enable strategicplanning and execution of international
trade business.  Lesotho has limited
technological and human resources
capacities in the new
information/communication technologytools such as CD-Rom and the Internet.
Technical assistance is required to enhance
these capacities.WTO One computer, a printer a modem and other
accessories will be provided to the TradeDivision of the Department of Trade
Industry & Employment.  This includes a
link to the Internet.
Training on access and use of Internet
resources as well as CD-Roms will also beprovided.
e) Establishment of export oriented
lending/financial schemes, particularly for
the SMMEs.
f) Strengthening the quality of Lesotho's
products and the ability to meet and
conform with international standards bystrengthening the human and institutional
capacities of the Standards and Quality
Assurance Division.
g) Establishment of specialised marketing
channels e.g. Trading Companies, Export
Houses and Export Consortia.
h) Strengthening the human andinstitutional capacities of support
institutions in order to promote exports
from their member entrepreneurs.
i) Establishment of a bulk procurement
facility that will enable the SMMEs to
procure raw material and other requiredinputs at competitive prices.WT/COMTD/IF/21
Page 34
Technical assistance needs identified in the
questionnaireOrganization Response
Lesotho Needs-Assessment:
Chapter 11 (cont.):
j) Forging industrial linkages between
SMMEs and large scale industries in order
to increase local content of high quality
products and to encourage strong and
internationally competitive clusters andhence improve Lesotho's access to
international markets.
k) Establishing in-house capabilities to
assess and encourage appropriate
technology to graduate Lesotho into higher
value added products.
l) Establishment of a training manufacturing
factory for quality control, design, market-
driven production, sub-contracting betweenthe SMMEs and large commercial entitiesand export strategies.
m) Training of LCCI, LMA, WIB, BEDCOand BAPS in facilitating access to financial
facilities available at commercial banks by
the SMMEs.UNDP See Chapter 7.
n) Establishment of a micro financing
scheme for the start-up and graduation of
SMMEs in order for them to orient their
foreign trade policies in view of the newregional and global trade developments.
o) Institutionalisation, rationalisation andcoordination of training programmespertaining to business start-ups andmanagement.
p) Finally, specific technical needspertaining to each support institutionwarrant consideration and support.WT/COMTD/IF/21
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Technical assistance needs identified in the
questionnaireOrganization Response
General comment IMF In the past five years, the IMF has provided
technical assistance to Lesotho aimed at
strengthening technical and managementcapabilities in various areas, in particular
central banking, government accounting,
and statistics.  More directly related to the
area of trade is the assistance provided in
central banking and balance of payments
statistics.  A long-term advisor to the
Governor of the Central Bank of Lesothohas worked in strengthening internal audit
procedures, training staff, and putting in
place adequate accounting and managementof foreign exchange operations.
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