RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/222 
30 September 2009  
 
(09-4503) 
Trade Policy Review Body Original:  English 
   
 
  
 
TRADE POLICY REVIEW 
 
Reports by the 
 
MEMBERS OF THE SOUTHERN  
AFRICAN CUSTOMS UNION 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statements by the members of the Southern African 
Customs Union are attached. 
 
 
Note: These reports are subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on the Southern African Customs Union. Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 CONTENTS 
    P a g e  
REPORT BY BOTSWANA 7 
I. INTRODUCTION 7 
II. DEVELOPMENTS IN THE MACRO-ECONOMY 7 
(1) G ROSS DOMESTIC PRODUCT (GDP) 7 
(2) F ISCAL POLICY  7 
(3) M ONETARY POLICY  8 
(4)  E CONOMIC OUTLOOK  8 
III. TRADE AND TRADE RELATED POLICY DEVELOPMENTS 8 
(1) T RADE POLICIES AND STRATEGIES  8 
(2) C OMPETITION POLICY , LAW AND AUTHORITY  9 
(3) P ROTECTION OF INTELLECTUAL PROPERTY AND COPYRIGHTS  9 
(4) G OVERNMENT PROCUREMENT  9 
(5) L AND REFORMS  9 
(6) L ABOUR   10 
IV. SECTORAL POLICY DEVELOPMENTS 10 
(1)  M ANUFACTURING  10 
(2)  A GRICULTURE  11 
(3)  M INING SECTOR  11 
(4)  S ERVICES SECTORS  11 
(i)  GATS and other commitments 11 
(ii)  Financial services 12 
(iii)  Tourism 13 (iv)  Communications 13 
(v)  Transportation 13 
V. AID FOR TRADE (AFT) 13 VI. CONCLUSION  14 
REPORT BY THE KING DOM OF LESOTHO 15 
I. INTRODUCTION 15 
II. MACROECONOMIC ENVIRONMENT 15 
III. SECTORAL PERFORMANCE 17 
(1) P
RIMARY SECTOR  17 
(2) S ECONDARY SECTOR  18 
(3) T ERTIARY SECTOR  18 WT/TPR/G/222 Trade Policy Review 
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    P a g e  
IV. TRADE AND RELATED POLICY DEVELOPMENT 19 
V. REGIONAL AND MULTILATERAL TRADE RELATIONS 20 
VI. CONCLUSION  21 
REPORT BY NAMIBIA  23 
I. EXECUTIVE SUMMARY 23 
II. GLOBAL FINANCIAL CRISIS AND THE DOMESTIC ECONOMY 23 III. SECTORAL STRATEGIC POLICY PARADIGMS 24 
(1) A
GRICULTURE  24 
(2)  I NDUSTRIALIZATION  25 
(3)  S ERVICES  26 
(4)  M INING   27 
(5)  F ISHERIES  27 
(6) T OURISM SECTOR  27 
(7)  A ID FOR TRADE  28 
IV. CONCLUSION  28 
REPORT BY SOUTH AFRICA 29 
I. INTRODUCTION 29 
II. DEVELOPMENTS IN THE MACRO-ECONOMY 29 
III. RELATED POLICY  DEVELOPMENTS 30 
(1) G ROWTH AND DEVELOPMENT SUMMIT  30 
(2) A CCELERATED SHARED GROWTH INITIATIVE FOR SOUTH AFRICA (ASGISA) 30 
(3) N ATIONAL INDUSTRIAL POLICY FRAMEWORK (NIPF)  AND INDUSTRIAL POLICY 
ACTION PLAN (IPAP) 31 
(4) T RADE POLICY AND STRATEGY FRAMEWORK  31 
IV. TRADE-RELATED POLICY DEVELOPMENT 32 
V. INTERNATIONAL ARRANGEMENTS AND TRADE NEGOTIATIONS 33 
(1) N EW PARTNERSHIP FOR AFRICA 'S DEVELOPMENT  33 
(2) S OUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)  TRADE PROTOCOL AND 
SOUTHERN AFRICAN CUSTOMS UNION (SACU) 34 
(3) F RAMEWORK FOR SOUTH AFRICA 'S RESPONSE TO THE INTERNATIONAL ECONOMIC 
CRISIS   34 Members of the Southern Afri can Customs Union WT/TPR/G/222 
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     P a g e  
(4) M ULTILATERAL TRADE NEGOTIATIONS IN THE WTO 35 
(5) S OUTH -SOUTH COOPERATION  36 
REPORT BY THE KINGDOM OF SWAZILAND 37 
I. INTRODUCTION 37 
II. ECONOMIC REFORM PROGRAMME 37 
(1) I MPROVING EXPENDITURE MANAGEMENT , REVENUE COLLECTION , GOVERNANCE , 
AND  SERVICE DELIVERY IN THE PUBLIC SECTOR AND OVERALL MACROECONOMIC  
STABILITY  37 
(2) S TRENGTHENING INSTITUTIONAL AND HUMAN CAPACITY AND THE LEGISLATION  
FRAMEWORK IN ORDER TO REDUCE COSTS OF DOING BUSINESS , ATTRACT MORE  
FOREIGN DIRECT INVESTMENT AND INCREASE DOMESTIC INVESTMENT  38 
(3) S UPPORTING INDUSTRIAL AND EXPORT DEVELOPMENT IN ORDER TO IMPROVE TRADE 
COMPETITIVENESS  40 
(4) E XPANDING THE EXPORT BASE THROUGH ECONOMIC DIVERSIFICATION  40 
III. IMPLEMENTATION OF MULTILATERAL AND REGIONAL AGREEMENTS 41 IV. CONCLUSION  41 
 
 Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 REPORT BY BOTSWANA 
I. INTRODUCTION 
1. The development ideals espoused in Botswana's National Development Plans (NDPs), Vision 
2016 as well as Millennium Development Goals refl ect Botswana's key national objectives of 
economic diversification, agricultural and industr ial development, integration into the global 
economy, employment creation and poverty redu ction. These national objectives serve as the 
foundation for the country's continued econom ic growth, development and stability.  
2. In terms of bilateral, regional and multilateral trade arrangements,  Botswana will continue to 
maintain her membership in Southern Afri can Customs Union (SACU), Southern African 
Development Community (SADC), SADC Economic Partnership Agreement arrangement with the 
European Union Commission, WTO and other regi onal and bilateral trade agreements such as 
SACU-EFTA and SACU-MERCOSUR Agreements. Bots wana will continue to pursue bilateral, 
regional and multilateral trade arrangements in or der to secure market acc ess opportunities for her 
goods and services. 
3. This Government Report serves to highlight th e major facets of Botswana's trade agenda; 
including its economic performance, outlook and polic y orientation. In so doing, major sectors are 
highlighted as well as trade relations with key pa rtners.  The report also identifies challenges and 
constraints in trade and broadly outlines how such  challenges may be addressed in order to more 
participate effectively in the world trade. 
II. DEVELOPMENTS IN THE MACRO-ECONOMY 
(1) GROSS DOMESTIC PRODUCT (GDP) 
4. Botswana's macroeconomic indicators reflect  several positive developments which have 
catapulted the country from a low-income to medium  high-income with a per capita income of about 
US$7600 in 2008 (Bank of Botswana 2008 Annual Report) .  Actual GDP growth during the first five 
years of NDP 91 averaged 4.4% per annum, which was below the NDP 9 target of 5.5% and at a 
slower rate than that required to achieve the Vi sion 2016 objectives.  Therefore NDP 10 aims to 
achieve GDP growth that will assist the country to achieve Vision 2016 and MDG objectives. 
(2) FISCAL POLICY  
5. Fiscal policy has evolved in line with the princi ple of fiscal prudence. Since the second half of 
NDP9, Botswana adopted the Fiscal Rule which requ ires Government expenditure to average 40% of 
GDP. 
6. Fiscal policy is based on rules aimed at limiti ng total public expenditu re, containing budget 
deficits within reasonable limits, and ensuring that the revenues from diamonds, which is an 
exhaustible resource, are re-invested in national prod uctive investments.  Botswana has been able to 
maintain expenditure to levels below 40% of GDP.  The country aims to cut this level to 35% of GDP 
during NDP10. 
                                                      
1 NDP 9 covers the period 2003/04 to 2008/09. WT/TPR/G/222 Trade Policy Review 
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(3) MONETARY POLICY  
7. Botswana's monetary policy objective focuses on the achievement of sustainable, low and a 
predictable level of inflation.  It currently target s a medium-term range of 3-6% which is considered 
appropriate for the achievement of broader nati onal objectives of sustainable growth and productive 
investment.  Further, maintaining low and stab le inflation would help  support international 
competitiveness of domestic producers.  Botswana w ill continue to pursue a policy of price stability 
during NDP 10 and also aim to bring down infl ation to the Bank of Botswana target range. 
(4) ECONOMIC OUTLOOK  
8. The current global economic downturn has star ted to negatively impact the Botswana 
economy. The main risk to the economy is on mine ral exports, in particular, diamond sales, which 
started to fall significantly in 2008.  In addition, there has been a sharp dec line in commodity prices 
for other minerals like copper, nickel and gold.  As a result, a slow-down in economic growth and a 
significant decline in government revenues are expe cted from the end of 2008/2009 until 2010/2011. 
Government will focus on managing both developmen t and recurrent expenditure to contain the 
adverse effects of the global economic downtur n as well as engaging in both private sector and 
Government investment to stimul ate economic growth during NDP10. 
III. TRADE AND TRADE RELATED POLICY DEVELOPMENTS 
(1) TRADE POLICIES AND STRATEGIES  
9. The Government of Botswana views trade as a major engine of growth.  To this end, 
Botswana's Trade Policy  will be launched during 2009.  The policy defines how the country will 
conduct her trade with bilateral, re gional and multilateral trading partne rs and the significant role that 
will be played by the private sector. The c ountry is also in the process of establishing a National Body  
(as per Article 7 of 2002 SACU Agreement), wh ich will be responsible for international trade 
administration.  
10. Furthermore, Botswana will continue negotiati ng favourable market access for her goods and 
services as well as developing Policies and Strategi es to support her trade agenda.  Already, the 
country has developed the National Export Strategy , the Investment Strategy and Private Sector 
Development Strategy.  In addition, different hubs have been established, and the process of 
developing special economic zones is ongoing.   These hubs include Agricultural, Diamond, 
Education, Health, Innovation and Transport.  When fully operational during NDP10, the Hubs will 
provide a platform for the development of technol ogy-driven and knowledge-int ensive industries, as 
well as opportunities for researchers, higher education institutions and public policymakers to work 
together to foster innovation and new business developments. 
11. In order to effectively benefit from the trade  and trade related policies and strategies, Trade 
Facilitation  is one of the significant highlights in NDP 10.  Infrastructural Development projects  
aimed at improving trade environment include majo r airport development and expansion projects at 
Sir Seretse Khama, Maun, Francistown, Kasane, Serowe/Palapye, Hukuntsi, Tsabong and Tsodilo, as 
well as the construction of the Kgalagadi Trans-fr ontier Park joint entrance gate between Botswana 
and South Africa (expected to be completed by the end of 2009) and the Chobe-Zambezi Bridge that 
will connect Botswana and Zambia and the rest of Central Africa. 
12. In order to respond to the current electricity  shortages, Government is undertaking major 
investment projects such as the Morupule Power Plant expansion and Mmamabula power project. Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 Through the  infrastructure development policy, Government  is committed to provide public goods in 
the form of roads, telecommunications, water and research institutions.   
13. To further advance the economic diversificati on of Botswana, the Government adopted the  
Privatisation Master Plan in 2005.  The Plan outlines the strate gies, principles and procedures to be 
followed to achieve privatisation of identified public  sector institutions in the country.  The policy 
emphasises the need to achieve free and fair trad e as well as adequate citizen participation in 
privatized institutions. 
14. Relevant agencies and institutions geared to wards the creation of a conducive environment 
for the growth and development of the private sect or have been establishment.  These include among 
others, the Local Enterprise Agency  (LEA), Botswana Bureau of Standards (BOBS) and Botswana 
Export Development and Investment Authority (BEDIA ).  LEA's core function is to promote small 
and medium enterprises as well as supporting the manufacturing sector.  BOBS deals with certification of international standards, while BEDIA deals with attraction of foreign direct investment 
and export development. 
(2) C
OMPETITION POLICY , LAW AND AUTHORITY  
15. Botswana developed a Competition Policy in 2005 and is at an advanced stage of completing 
the related legislation that will establish a competiti on authority. These developments are expected to 
encourage the establishment of indu stries in Botswana during NDP10. 
(3) PROTECTION OF INTELLECTUAL PROPERTY AND COPYRIGHTS  
16. The Registrar of Companies and Intellectual Property (ROCIP) is responsible for the 
registration and administration of Intellectual Property Rights (IPR) and Business Names in 
Botswana.  The Copyright Society of Botswana (a non-profit organization) has been established with 
the mandate of negotiating and granting licences in agreement with the copyright owner, for the 
adaptation of works, performances, and sound recordi ngs; setting rates for royalties, and the collection 
and distribution of royalties.  The Act also mandates the society to put in place rules and  regulations 
to ensure  protection of right holders and setting rates for royalties in acco rdance with acceptable 
international standards, subject to approval by the O ffice of the Registrar.  This protection of IPR is 
expected to encourage innovation, invention and investment in IPR activities during NDP10. 
(4) GOVERNMENT PROCUREMENT  
17. The procurement system in Botswana is based on the principles of fairness, equity, openness 
and transparency. Further, tenders are awarded on a competitive basis in acco rdance with the Public 
Procurement and Asset Disposal (PPAD) Act. The PPAD Act requires that all Botswana resident 
contractors must register with Public Procurement and Asset Disposal Board (PPADB) in order to be 
eligible to participate in Government tenders.  The Open Domestic Bidding Method is normally used 
in all tenders.  Contractors that are not register ed with PPADB may not pa rticipate in any open 
domestic bidding tenders.  
(5) LAND REFORMS  
18. The Ministry of Lands and Housing is respons ible for land administration in Botswana.  
While there are three land tenure systems in Botswana, namely Freehold, State Land and Tribal Land, only State Land and Tribal Land continue to be allocated to both citizens and non citizens under 
leasehold.  State Land is obtained at market pric es and allocated on a fixed period state grant of 
50 years.  Tribal Land is obtained free of charge and is also leased for a period of 50 years for WT/TPR/G/222 Trade Policy Review 
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commercial and industrial uses.  The Ministry of  Lands and Housing is currently reviewing the 
National Land Policy which, among other things, seeks to improve land allocation system on both tribal and state land to make it predictable, tr ansparent, reliable and consistent and timely. 
19. To facilitate trade, since 2008/09 the Ministry  of Lands and Housing adopted the policy of 
allocating land to the Ministries of Agriculture , Trade and Industry as well as the Ministry of 
Environment, Wildlife and Tourism, allowing them to screen and recommend investors for allocation. 
(6) L
ABOUR  
20. During NDP 9, there was a  significant growth in  unionisation of the public sector as a result 
of enabling legislation namely; the Trade Disputes  and Trade Unions and Employers Organisations 
Act. The Employment Act was also reviewed to prot ect workers' claims in th e event of insolvency.  
As a means of enhancing international competitivene ss and spreading the benefits of development as 
widely as possible, the Revised National Policy on Incomes, Employment, Prices and Profits was reviewed in 2005 to introduce minimum wag es for agricultural and domestic employees. 
IV. SECTORAL POLICY DEVELOPMENTS 
(1) M
ANUFACTURING  
21. Manufacturing has remained at about 4-5% of GDP since the mid 1990s, and has had a 
relatively slow overall growth, fo llowing higher growth in earlier decades.  The structure of the 
manufacturing sector has changed substantially, with  the expansion of pro duction of other products 
such as foodstuffs, mainly dairy and bakery products , beverages, textiles, vehicles, chemical products, 
metal products, paper and pa per products.  In order to promote manufacturing sector, particularly in 
downstream processing of diamonds, salt, soda ash , timber, hides and skins, the Industrial 
Development Act was amended in 2006 to harmoni ze it with the Trade Act; simplify the process of 
issuing industrial licences, and avoid multiple li censing structures. Exclusive manufacturing licences 
were abolished in 2008 in order to encourage "free entry, free exit " into the market.  The Industrial 
Development Policy of 1998 is currently under revi ew with a view to aligning it to the changing 
global economic environment and changing conditio ns for competitiveness in the country.   
22. Diversification of manufacturing is also enc ouraged through the Manufacturing Development 
Approval Order (MDAO) which provides tax concessions to manufacturers, where Approved Manufacturing Companies pay a 15% tax rate as opposed to the normal 25%.  
23. Botswana has reformed her tax system to pos itively influence industrial development. In 
January 2007, the Botswana Unif ied Revenue Service (BURS) took a major step in its Customs 
reforms by undertaking a diagnostic study whic h established the framework for its 2009-2012 
Strategic Plan. Initiatives include a review of the Cu stoms & Excise Duty Act w ith a view to ensure 
compliance with agreed international commitments and ensure transparency and predictability by 
providing basic information on matters such as rules, decisions, consultation mechanisms, and adequate appeals processes.  It is envisaged that the review will be completed by 2010.  BURS is in 
the process of procuring a non-intrusive inspection e quipment (container x-ray scanners) in an effort 
to improve on revenue collection, facilitate legitimate im ports and exports and guard society against 
cross-border crime as well as  combating unfair and harmful trade practices.  The system is expected to be fully operational by the end of 2009. BURS  has also established a Customs-to-Business Forum 
which provides a platform where the public and pr ivate sector can share ideas and exchange trade 
facilitation information.  Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 (2) AGRICULTURE  
24. The National Agricultural Policy (1991) is bei ng reviewed.  The objectives of the new Policy 
are to: Improve food security at household and natio nal levels;  diversify ag ricultural production base; 
increase output, productivity, employment opportuniti es; and conserve scarce agricultural and land 
resources will be maintained.  The review is expe cted to result in a change of strategy towards 
commercialization of agriculture, in recognition of the importance of diversification of agricultural 
production.  
25. To address the above objectives, most of the NDP 9 (2004/09) programmes and projects will 
continue into NDP 10.  Since the last review, the Ministry of Agriculture has introduced the following 
programmes: 
i) Integrated Support Programme for Arable Ag riculture Development (ISPAAD, 2008), which 
aims to increase agricultural production throug h the provision of inputs, services centers and 
facilitation of access to credit. 
ii) Livestock Management and Infrastructural De velopment (LIMID) was introduced in 2002 
and aims at supporting animal husbandry, fodder production, borehole/well drilling and 
equipping, water reticulation, poultry production and small-stock production.  
iii) Agricultural Infrastructural Development Initia tive (AIDI, 2003) aims at the provision of 
agricultural infrastructure, specifically electri city, telecommunications, roads and irrigation. 
iv) The review of the BMC Act (1965) which aims at removing the current monopoly on export 
of meat products. 
(3) MINING SECTOR  
26. The mining sector, especially diamonds contributes a lager share to Botswana's economy. 
Other minerals include Copper-nickel, Coal, Soda  ash, Salt and small amounts of gold. Exploration 
for a wide variety of minerals is ongoing through government sponsored and private sector projects to 
expand the country's resource base. Government 's policy is to actively promote downstream 
processing while simultaneously open to the sale  of a portion unprocessed minerals.  Further, 
processing of salt and soda ash resources as well as establishment of coal washing plant to improve 
the calorific value of the coal are also being explored.   
27. As a strategy for competitiveness, the Bo tswana Diamond Trading Company (DTC) was 
established in April 2008 to promote the diamond cutting and polishing sector.  The DTC is a rough and polished diamond trading facility geared to wards the development of diamond jewellery 
manufacturing and attraction of support industries. Bo tswana's mineral policy aims to strike a balance 
between maximizing economic benefits for the nati on while allowing investors to earn competitive 
returns.   
(4) S
ERVICES SECTORS  
(i) GATS and other commitments 
28. Botswana is party to the General Agreemen t on Trade in Services (GATS), and has made 
commitments in three (3) sectors, namely communication, tourism and business services. Botswana remains committed to the Doha Development Agenda  and is committed to progressive liberalisation 
of trade in services.  WT/TPR/G/222 Trade Policy Review 
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29. Botswana is also engaged in ne gotiations on trade in services at the regional level, through the 
Southern African Development Community (SADC) Pr otocol on Trade in Services, and comprises of 
a sub-group of the SADC configuration negotia ting the Economic Partnership Agreement (EPA), 
which has undertaken to negotiate trade in services, with the European Union.  
30. The drive to diversify the Botswana econom y towards Trade in Services requires the 
development of effective policies for the services sect or. Consequently, there is need to ensure that 
there are effective regulatory frameworks coveri ng openness, transparency and non-discriminatory 
regulations.  
(ii) Financial services 
31. Botswana's financial sectors' supervisory frame work features two main regulatory agencies, 
viz., the Bank of Botswana (BoB) and the Non- Bank Financial Institutions Regulatory Authority 
(NBFIRA), which started its operations in April 2008.   The Bank of Botswana is responsible for the 
regulation of banks and foreign exchange dealers ( bureaux de change), with banks regulated under the 
Banking Act of 1995 and the Bank of  Botswana Act (1975, 1996 and 1999).  On the other hand, the 
NBFIRA regulates non-bank financial institutions  under the Non-Bank Financial Institutions 
Regulatory Act of 2006.  These include all non-depos it taking institutions such as asset managers, 
collective investment undertakings, insurance and pe nsions industry, stock exchange, stock brokers, 
micro lenders.  One of the NBFIRA core mandates is  to minimize regulatory gaps and overlaps in the 
financial system, as well as maintaining consistenc y with emerging non-Bank regulatory structures in 
the region. NBFIRA is faced with challenges of  developing and improving the existing legislative 
framework in order to smoothly regulate financ ial institutions under its mandate.  NBFIRA is 
currently revising the legislations that fall under its mandate in order to address areas of weakness and 
to bring them in line with international practices.   The NBFIRA is expected to complement the 
banking regulation and augment the st ability of the financial system.  
32. Furthermore, initiatives to promote the prim ary and secondary money and capital markets 
development have led to Government issuing Treas ury bills and bonds in succession.  In addition, 
there is the creation and enhancement of the an ti-money laundering and comb ating the financing of 
terrorism legislative framework.  The elements of anti-money programmes are catered for under the 
Banking Act, 1995 and include, among ot hers, the Know Your Customer  principle. Botswana has a 
National Task Force on Money Laundering establishe d in 1996.  In a process which is currently 
underway, Government aims to establish the Fi nancial Intelligence Agency, which will receive, 
analyse and disseminate financial information to inv estigating and supervisory authorities in an effort 
to curb money laundering.  The Financial In telligence Bill which will establish the Agency was 
passed by parliament in February 2009.   
33. Overall, there is the review and promulgation of legislation to enhance the regulation and 
supervision of the financial sector, including amendi ng legislation to ensure that the administrative 
and regulatory structure is enhanced to accommoda te the NBFIRA as the regulator and to remove 
overlaps found in NBFIRA Act and the existing legi slation.  The Central Bank continues to license 
more banks, to enhance competition in the banking system.  
34. Challenges have been identified as the pro cess of improving the regulatory environment 
unfolds.  These include the need for strengthening the regulatory environment, building the capacity 
of regulatory institutions and addr essing inadequate information technology infrastructure.  There is 
also the need to align efforts for improving macr o level reform, removing barriers to wider formal 
sector provision of services and creating incentives for private sector financial institutions to widen 
access to financial services.  In so doing, the fi nancial sector will support economic empowerment, Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 access to finance by the majority of the population and more importantly, to align them to 
international best practices. 
(iii) Tourism  
35. The Tourism Sector is one of the leading economic activities with a potential for achieving 
economic diversification.  Over the next ten years,  Botswana's travel and tourism is expected to 
achieve annual real growth of; 5% in total travel and tourism demand;  6.4% in travel and tourism 
GDP; 2.9% in travel and tourism empl oyment, and 5.7% visitor exports.  
36. To ensure this growth, policy changes are be ing undertaken, including a review of the 1990 
Tourism Policy and the establishment of the Bots wana Tourism Board (BTB) in 2003. Appropriate 
strategies for developing and marketing the country as a destination of choi ce as well as mechanisms 
and measures for regulating and monitoring the sector  will be reflected in the reviewed Tourism 
Policy.  
(iv) Communications 
37. The Botswana Telecommunications Authorit y (BTA), which was established by the 
Telecommunications Act of 1996, regulates th e industry. Not all communication services are 
currently regulated by BTA and so ongoing reform s aim to ensure effect ive regulation of all 
communications services.  This includes the establishm ent of a converged regulatory authority which 
will centrally regulate Telecommunications, ICT,  Broadcasting and Media and Postal Services. 
Complementing this is the pursuit of universal service provision which will lead to the establishment of the universal service fund.  
(v) Transportation  
38. The transport sector is particularly important  to Botswana given her landlocked status.  
Government is currently developing an integrat ed transport policy which will provide support to 
economic and social development to meet demand and changing transport needs of the country. A 
number of infrastructural developments are ongoing,  including, construction and upgrading of major 
roads linking the country with its neighbouring countries.  
39. The establishment of the Civil Aviation Authorit y of Botswana (CAAB) as a regulator of the 
air transport services will further enhance the trans port system.  The Authority takes over all civil 
aviation activities, except the accident investigati on function, from the Department of Civil Aviation 
following the approval of the Civil Aviation Aut hority (Amendment) Bill in November 2008.  The 
objective is to establish a civil aviation structure th at is efficient, effective and responsive to the 
dynamics of the aviation industry, the social and ec onomic development.  Furthermore, in response to 
increased air traffic as well as to the need for pr omoting trade and tourism, the Government initiated 
the process of deregulating air transport with a view  to reducing the current constraints and allowing 
for more competition. Although the privatisation pr ocess has not taken effect to date, it remains the 
core principle for Government to restructure servi ce delivery within the sector.  The necessary and 
appropriate mechanisms for regulating and mon itoring the sector will be reflected in the 
comprehensive transport policy. 
V. AID FOR TRADE (AFT) 
40. The ability to benefit from a predictable and eff ective program of Aid for Trade financing is 
critical to Botswana's integration into the globa l economy.  As such Botswana seeks to impress upon 
development partners and WTO members, the need  to ensure the delivery of pledged assistance, WT/TPR/G/222 Trade Policy Review 
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particularly at this time of global contraction, wh ich has emanated from the financial crisis. External 
support will therefore continue to be vital to ease the burden of adjustment, limit adverse effects on 
real incomes and reduce poverty. 
41. Botswana hopes to utilize this support facility in her drive to address development challenges, 
which include unemployment, poverty, HIV/AIDS, and economic diversification. Further, the 
commitment of the African region to vigorously pu rsue infrastructure development, trade facilitation, 
trade financing and food security rema in top priorities for Botswana.  
42. Support for the improvement of efficiency of sectors through Policy and Regulatory 
Development and Reform is essential at this stag e of Botswana's development.  A complementary 
need therefore is targeted aid for capacity buildi ng and institutional strengthening, including through 
the establishment of institutions such as the Nati onal Body and Competition Authority and support for 
active participation in discussions on trade and trade-related issues. 
43. Consistent with the needs of the SACU re gion, AfT emphasis should be placed on addressing 
supply-side constraints, including assistance in impl ementing strategies, such as the National Export 
Strategy (NES) and the Private Sector Developmen t Strategy (PSDS). Intervention through AfT will 
target the private sectors' need to increase its competitive edge, incl uding the utilization of the latest 
technological methods of production, increasing access to trade financing, ensuring compliance with 
international standards and increasing market intelligence. 
44. Infrastructure development is a core component of  an overall strategy to secure benefits from 
trade, particularly given the Bots wana's land-locked status. As indicated earlier, infrastructure projects 
geared towards enhancing trade facilitati on and the provision of essential business support 
infrastructure are essential. 
VI. CONCLUSION 
45. The recognition that trade plays a significant ro le in attaining economic growth means that 
Botswana will continue to advocate for a global en vironment which supports her strategy to more 
actively and effectively participate in the global trad e.  Botswana's participation in the global trade 
environment and its adoption of relatively open tr ade policies have been significant factors in 
promoting economic growth a nd alleviating poverty.   
46. The domestic policies define the context in wh ich trade policy will be implemented in the 
economy.  The Government recognizes the need to ensure complementarity between the trade policy 
and other policies which are primarily centred on promoting Botswana's global competitiveness and 
economic diversification, and based mainly on the pub lic-private sector partnership.  This is further 
complimented by the National Development Plan  10 (April 2009 to March 2016) whose theme is 
"creating the conditions for accelerated private sector growth in order to reach Vision 2016 targets".  
47. Botswana therefore, remains committed to the multilateral trading system and holds the view 
that deliverables of the Doha Development Agenda  must positively impact on developing countries as 
they work towards integration into the global economy.  
  Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 REPORT BY THE KINGDOM OF LESOTHO 
I. INTRODUCTION 
1. As this is Lesotho's third Trade Policy Review , and the second time that the trade policies of 
the Southern African Customs Union (SACU) me mber states are reviewed as a single bloc, the 
Government of Lesotho (GoL) wishes to seize th is opportunity to reiterate its commitment to the 
review process.  The GoL views this collective re view of the SACU members as a significant step 
towards contributing to the realization of full economic integration of the sub region. 
2. Lesotho has witnessed positive developments in  its economy since the last Trade Policy 
Review in 2003 as per capita GDP grew from US$529.07 in 2003 to US$945.49 in 2007.  Growth has 
been based on factor endowments such as compe titive labor and natural resources associated with the 
textiles and mining sectors.   
3. Despite such gains, Lesotho remains the only Least Developed Country (LDC) within SACU 
per UN classification and continues to experience the challenges of trade preference erosion and a 
threatened revenue source under the current global ec onomic climate.  In addition, Lesotho is faced 
with prevalent poverty in rural communities, food insecurity (Leso tho only grows 30% of its food 
requirement), high unemployment rates (22.7% in 2008), income inequality (2007/8 Gini Coefficient 
was 63.2) and the development of an appropriate  policy framework for the advancement of key 
economic sectors and the fight against the HIV/AIDS pandemic. 
4. Lesotho continues to benefit from preferentia l access for its products into major markets 
under the expanded GSP schemes of some develope d countries such as the African Growth and 
Opportunities Act (AGOA) with the USA.  Lesot ho's trade relations with the European Union 
changed from a preferential arrangement to a free trade agreement following the signing of a goods-
only Interim Economic Partnership Agreement in 2009.  Also, Lesotho in 2009 submitted a letter 
indicating its intention to take advantage of the Duty Free Tariff Preference Scheme (DFTP) offered 
by the Government of India.  Strengthened ins titutions under SACU and th e 2008 Southern African 
Development Community (SADC) Free Trade area conti nue to reinforce Lesotho's integration into the 
regional economy. 
II. MACROECONOMIC ENVIRONMENT 
5. Economic policy in Lesotho has been aimed at addressing the high incidence of poverty 
through comprehensive macroeconomic, structural and social policies.  The objective has been to 
encourage growth in the private sector which ca n lead to income-generating opportunities for the 
unemployed and underemployed members of the labour force. 
6. Lesotho's real GDP grew at an average annua l rate of 4.4% between 2002 and 2007.  The 
main fluctuations around this occurred in 2005 where la rge declines in agriculture and textiles led to a 
0.7% growth rate, while in 2006, the combined strong performance of the diamond mines and recovery in textile manufacturing le d to an 8.1% growth rate.   
7. The protracted global economic slowdown has placed downward pressure on Lesotho as 
growth rates fell from 5.1% in 2007 to 3.1% in 2008.   This has been driven by a slowdown in the 
mining and textile industries as well as slower than  expected growth in the tertiary sector.  The 
economy is projected to grow by 2.9% in 2009 s ubject to overall performance of Lesotho's main 
export markets which are South Africa, the U.S. for textiles, and the Euro area for diamonds.   WT/TPR/G/222 Trade Policy Review 
Page 16 
 
 
8. The GoL's fiscal strategy has been focused on ensuring that the country maintains a 
sustainable fiscal stance.  At its core is the en couragement of rapid and sustained private sector 
development to diversify the economy and to re duce the relative scale of the public sector, which 
currently absorbs nearly half of the GDP.  U nder the Medium-Term Fiscal Framework (MTFF), the 
GoL is undertaking critical analysis to assess the sustainability of its budget in the medium term.   
9. The country experienced an increasing budget surplus that grew from US$13.14 million 
(1.1% of GDP) in 2003/4 to US$158.70 million (10.7%  of GDP) in 2007/8.  However, the projected 
decline in SACU revenues are exp ected to threaten fiscal sustainability through increased deficits, 
higher levels of economic debt and decline in r eserves.  In the medium term, budget surpluses are 
expected to turn to deficits with US$41.71  million (-2.2% of GDP) forecasted for 2009/10, and 
deficits of 14% and 8% of GDP in the subsequent two years.   
10. The GoL utilized the positive fiscal outcomes between 2003/4 and 2007/8 to reduce debt 
incurred on non-concessional terms from foreign fina ncial institutions.  As of 2008, 96% of the 
external debt stock was being provided on concessiona l terms.  Overall debt to export ratio fell from 
96.56 in 2002 to 58.44 in 2008.   
11. Inflation in Lesotho is driven by prices in South Africa, which remains the main source for 
almost 95% of imports for final consumption.  In flation rates peaked at 12.6% in 2002 as regional 
food shortages caused a significant increase in the price of agricultural products. A rapid reduction 
followed due to favourable price developments in South Africa, which brought inflation levels down 
to 3.4% by 2005.  There has been  a steady increase since then as in flation reached 11.2% in 2008 due 
to the substantial increase in food and fuel prices.  Inflation is expected to fall to 6.8% in 2009 given 
sluggish economic activity and lower commodity pr ices under the current global economic downturn. 
12. Reforms in the financial sector are expected to  reduce structural impediments in the financial 
system and contribute to growth in private sector  credit.  The credit/deposit ratio for commercial 
banks declined from its peak of 47% in 2005 to 37%  in 2007.  This increase in credit suggests banks 
have identified profitable lending opportunities in  the domestic economy rather than relying on 
inter-bank investments as more attractive use of funds.   
13. Reserves increased by US$21.65 million at the end of 2008/9 and are expected to decline by 
US49.15 million in 2009/10.  Reserves will continue to decline through 2011/12  as funds are used to 
finance the current account deficit. 
14. Lesotho's exports grew at an annual averag e rate of 9.3% between 2002/3 and 2007/8 while 
imports grew at an average of 7% per annum.  Th is however, has not resulted in a reduction in the 
trade deficit given that imports started at a higher base value1; the trade deficit increased from 
US$636.30 million to US$744.59 million for the same pe riod.  Lesotho's negative trade balance is 
projected to further increase as merchandise exports are expected to decline in 2009 due to the global 
economic downturn.    
15. In 2008, the primary sector grew by 9.9% as the strong performance of the mining sector was 
able to offset poor harvest.  The secondary sect or, heavily influenced by performance of the 
manufacturing sub-sector shrank by 2.4% while the te rtiary sector grew by 3.1%.  Growth between 
                                                      
1 Import trends have historically been correlated with the performance of the textiles industry which 
imports intermediate goods used in production and in th e imports required for the construction of the Lesotho 
Highlands Water Project (LHWP).  In recent years however,  the growth rate of imports have correlated with the 
general performance of the economy following the completion of Phase 1 of the LHWP and the textile industry reaching its peak in 2004/5. Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 17 
 
 
 2009 and 2012 is expected to average 7.8% in th e primary sector, 4.9% in the secondary sector and 
4.2% in the tertiary sector. 
16. Lesotho's major export markets are the USA, EU and SACU, which accounted for 97% of all 
2007 exports while major import markets are SACU  and Asia, accounting for 98% of all 2007 
imports.  Trade with SACU is dominated by So uth Africa which accounts for over 90% of both 
exports and imports. 
17. Lesotho's relies heavily on the export of te xtiles and clothing to the USA under AGOA.  
Lesotho also exports textiles and clothing together with footwear, water, bricks, TV components and 
milling products to the South African market.  Diamond exports are principally destined for the 
European Market. 
18. The textile and clothing sector remains the pillar of Lesotho's economic growth and the GoL 
is committed to maintaining current production levels  even as preferences continue to erode against 
major competitors.  The strategy will involve ex pansion of existing markets and entry into new 
markets, as well as skills development within the sector.  This expansion is expected to include 
broader penetration of the US market through buyer  and distribution networks ; broadening the narrow 
product base to explore products in regional and othe r markets where a tariff preference exists as well 
as continuous engagement with manufacturers in the diversification and inter-linkages between 
textiles and clothing.   
19. Lesotho with support from the World Bank has established two industry-led skills 
development centres with the aim of enhancing the competitiveness of the garment manufacturers in 
order to enable them to meet the demands of ma jor international buyers.  A comprehensive needs 
assessment was conducted in Februa ry 2009 to form the basis for curriculum at both centres and 
revealed a high demand for additional basic sewing training as well as specialized courses on supervisory skills, quality management, sewing mach ine maintenance, operation of specialized 
equipment, health and safety and the training of trainers. 
20. The GoL's diversification efforts are aimed at further development of areas where Lesotho 
appears to have the greatest relative comparativ e advantage.  An export diversification study 
identified these areas as being operations requiring la bour intensive assembly of imported components 
such as electronic and electrical goods for the regional market as well as higher value added 
production of local agricultural and mineral raw materials.   
III. SECTORAL PERFORMANCE 
(1)  P
RIMARY SECTOR  
21. Lesotho's primary sector contributes roughly 12% to GDP.  Agriculture declined by 4% in 
2008 due to the poor harvest and is forecasted to rec over to its normal level of 10.8% in 2009 due to 
expected improvements in the crop sector.  Overall gr owth in the sector is vulnerable to factors such 
as inadequate and poorly distributed rainfall, dec line in available arable land and farmer access to 
credit.  Full recovery of the sector is expected to take 2-3 years as the sector is expected to grow by 
6% in 2010.   
22. The mining and quarrying sector, while relatively small, has seen its share of GDP jump from 
2% in 2002 to 5.3% in 2008 mainly due to the resumption of diamond mining.  Overall prospects for the mining sub-sector remain positive even with the recent 50% decline in world diamond prices 
mainly because of the completion of prospecting wo rk and the securing of adequate finance for the WT/TPR/G/222 Trade Policy Review 
Page 18 
 
 
Mothae diamond mine.  While the subsector is likely to contract by 1% in 2009 it is expected to 
rebound with growth rates of 4.1% in 2010 and 9.7% thereafter.    
(2)  S ECONDARY SECTOR  
23. The secondary sector accounts for about 40% of GDP.  Manufacturing was the lead economic 
sector until 2003 as the Loti depreciated against major currencies a nd businesses exploited 
competitive opportunities under AGOA.  The sector dec lined by 10.2% in 2005 as a result of currency 
appreciation and the expiration of the Agreement on Te xtile and Clothing in January 2005.  There was 
significant recovery starting 2006 as employment with companies assisted by the Lesotho National 
Development Corporation (LNDC) increased from 39,597 in September 2005 to 47,204 by 
December 2008. 
24. The sector declined by 8.1% in 2008 and a furthe r decline of .5% is expected in 2009.  While 
there is immense pressure due to reduced demand a nd great uncertainty with orders given the global 
economic downturn, the sector is expected to grow in 2010 and 2011 by 3.5% a nd 6.4% respectively.  
This growth will likely be driven by the incep tion of the Phillips Bulb Company as well as the 
performance of other manufacturers in the sector.  
25. The manufacturing sector is currently constrai ned by limited availab ility of factory shell 
space as some firms operating at full capacity are unab le to expand and potential investors are unable 
to enter the market due to the lack of shell space.   The GoL's current strategy is focused on supporting 
the allocation of extra shell space and further development of identified industrial sites. 
26. Performance of the construction sub-sector whic h has generally been linked to the activities 
of the Lesotho Highland Development Authority (LHDA) improved between 2005 and 2007.  Growth 
potential in the sub-sector has been boosted fu rther following the signing of the Millennium 
Challenge Compact (MCC) between the GoL and th e USA in 2007.  Major construction activities are 
planned under the compact from the end of 2009 to ear ly 2010 and the sub sector is expected to grow 
by an average of 7% in 2009.  
27. The electricity and water sub-sectors experien ced real growth of 5.3% in 2008 and is 
projected to grow by 6.2% on average between 2008 and 2012.  These projections are based on the 
continued implementation of projects that will signi ficantly extend the coverage of service provision 
by both the Lesotho Electricity Corporation and the Water and Sewage Authority.  A future plan to 
import electricity from Mozambique is expected to further ease problems of electricity supply.  
(3)  T ERTIARY SECTOR  
28. The tertiary sector in Lesotho accounts for roughly 40% of GDP.  In 2007, the top three 
performers in this sector were real estate and business services, wholesale and retail trade, and public administration.  Lesotho is a net service importer with the sector accounting for roughly 6% of exports in 2006.  Major services export includes water distribution (through royalties under the Lesotho 
Highlands Water Project) and travel by non-resident visitors to the country, which together accounted 
for 50% and 40% respectively of 2007 services e xport.  Major services import  include travel, 
transport, and business services which in 2007 account ed for 53%, 18% and 15%  of total services 
import respectively. 
29. Lesotho has not witnessed significant growth and i nvestments in its services sector even with 
extensive liberalisation commitments under its GATS schedule.  The GoL through support from its 
development partners is focused on identifying exis ting regulatory impediments within this sector.  
This is expected to culminate in the production of  a services strategy which will guide the process to Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 19 
 
 
 dismantle regulatory impediments, enhance the efficiency of supply of key business services and 
increase competitiveness within  the services sector.  
30. Lesotho's banking sector is dominated by fore ign banks which use only a fraction of their 
liquidity for local lending.  The GoL believes there is a great scope for growth in the provision of 
credit to the rural poor and Small Micro and Medium Enterprises (SMMEs).  Current efforts to address these constraints include the IFAD spons ored Rural Finance Intermediation Programme 
which is expected to facilitate the development of fo rmal financial institutions to better meet the rural 
financial intermediations needs mainly by strengt hening the institutional and operational framework 
of the Lesotho Post bank. 
31. Lesotho is blessed with beautiful, often snow-c lad mountaintops.  The country enjoys a cool 
temperate climate free from malaria.  Mountain cl imbing in the Maluti Range, trout fishing, pony 
trekking and bird watching are some of the leisur e activities that can be made part of a tourism 
package.  In addition, Lesotho boasts one of Afri ca's few ski slopes and the highest commercial abseil 
in the world.  The Roof of Afri ca rally is also held in Lesotho 
32. In spite of the above advantages, Lesotho has not been able to fully capitalise on its tourism 
assets.  Full advantage has not yet been taken of the reservoirs resulting from the construction of the 
Mohale and Katse dams, both of which offer opport unities for water sport activities.  The 2010 World 
Cup to be held in South Africa also presents the chance to increase tourism in the short run and to 
communicate the tourism potential of Lesotho to a wider audience. 
33. Aware of the challenges ahead, the GoL is undertak ing reforms to transform its tourism sector 
into a growth anchor, which can stimulate the economy by providing business opportunities and much 
needed jobs.  The tourism strategic planning pro cess began in 2006 and is expected to result in the 
introduction of future tourism development zones and an enhanced institutional framework for the 
entire sector.   
IV. TRADE AND RELATED POLICY DEVELOPMENT 
34. The GoL has embarked on an aggressive effort  to create an enabling environment for the 
private sector, strengthen the legal framework and to improve the ease of doing business by 2012.  
Investment climate reforms have been initiated partic ularly to substantially reduce the time needed to 
register a business from over a month to under a week; decrease the time needed to deal with licenses 
and paying taxes, and to improve trading across borders so local businesses spend less time waiting on 
their supplies from abroad. 
35. Significant progress has been made towards implementing a new Companies Act, as well as 
setting up a modern and efficient company registration system.  A draft business reporting and 
industrial licensing bill is in place as part of th e process to streamline the business licensing process 
and to reduce the time and costs attached to obtaining trading licenses.  
36. Reforms are being planned in the areas of inv estment, competition and consumer protection.  
With draft investment and competition policies in place, there are national st akeholder consultations 
taking place as part of the process towards eventual enactment of laws under these key areas.  A draft 
consumer protection bill has also been prepared and is currently under review.  These reforms are 
expected to enhance transparency and improve the certainty of conducting business in Lesotho. 
37. In 2005, Lesotho undertook a review of its La nd policy, which led to the drafting of a new 
land bill.  The bill which is expected to be reviewed  by Parliament in 2009 will introduce key changes 
to facilitate ownership and control of land by foreigners for investment purposes. WT/TPR/G/222 Trade Policy Review 
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38. The Standards and Quality Assu rance department at the Ministry of Trade and Industry, 
Cooperatives and Marketing (MTICM) has been instru mental in the preparation of a standards and 
food control bill which is currently under review.  The bill is expected to facilitate the process for 
adopting regional and international standards within  Lesotho, as well as contribute towards consumer 
protection and enhance competitiveness for Leso tho's products through qu ality and productivity 
improvements.  A food safety needs assessment  was conducted in early 2009 and activities are 
underway to develop policy instruments to ensure na tional ownership of food safety initiatives, and 
the enactment of a comprehensive and modern legislation on food safety.  
39. A trade facilitation needs assessment was su ccessfully completed in 2008 to determine 
Lesotho's compliance with WTO requirements and to allow for meaningful participation in 
negotiations on trade facilitations.  The assessment identified Lesotho's key technical assistance needs 
as; reform and restructuring of the One Stop Shop, training for personnel at the Lesotho Revenue Authority and the MTICM, as well as infrastructure support for customs and the construction of equipped labs for the Department of Standards.   Lesotho intends to undertake a TRIPS needs 
assessment as soon as she gets as sistance in this regard.   
V. REGIONAL AND MULTILATERAL TRADE RELATIONS 
40. Lesotho has been actively engaged in trade ne gotiations at the WTO as a member of the LDC 
Consultative Group, Africa Group, African Caribbe an and Pacific (ACP) Group and at the SACU 
level.  The GoL is committed to working toward s the attainment of favourable outcomes under the 
Doha Development Agenda to incl ude meaningful market access and more simpler and transparent 
rules of origin for non-agriculture products or iginating from LDCs.  Lesotho remains committed to 
the completion of the Doha Development Round at the earliest opportunity and to ensure that Doha is indeed a development round. 
41. Lesotho continues to benefit from technical a ssistance programs under Aid-for-Trade (AfT), 
which roughly accounts for 15% of its total Official Development Assistance (ODA).  AfT support to date has targeted the building of productive capacity  particularly in agriculture and the development 
of economic infrastructure in areas like transport and st orage.  There is continuous need for technical 
assistance in areas such as the development of appr opriate standards infrastructure, efficient customs 
procedures and regional-specific initiatives to  ease the flow of goods across borders.  
42. As a member of SACU, Lesotho is expeditiously  developing institutions to support regional 
integration in the world's oldest customs union.  Along with other SACU members, the country has 
recently completed trade agreements with the Comm on Market of the South (Mercosur), the European 
Free Trade Area (EFTA).  The count ry has also negotiated (as part  of SACU) a framework Trade, 
Investment and Development Cooperation Agre ement (TIDCA) with the USA and further 
negotiations will soon begin to fu rther cooperation in specific tec hnical areas.  Negotiations are 
equally ongoing for a preferential trade agreement with India. 
43. Lesotho is equally pursuing regional integra tion efforts under SADC, of which all SACU 
states are members.  In 2008, Lesotho became si gnatory to the SADC Free Trade Area and is 
supporting regional efforts towards achieving a SADC Customs Union.  The FTA is expected to promote access to cheaper inputs and consumer goods as well as create more business opportunities for Lesotho's private sector in the SADC regional market.  Still, implementation of the SADC FTA in 2009 poses a particular threat to Lesotho's revenue  position given that liberalization of sensitive 
products which represent 15% of SACU tariff lines is now set to commence. Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 21 
 
 
 44. Lesotho's participation in trade agreements both at the regional and multilateral levels is 
expected to decrease overall revenue from trade taxes; and more significantly from the SACU 
customs revenue pool.  The establishment of the Lesotho Revenue Authority (LRA) in 2003 was a positive step towards mitigating the expected revenue shortfall as income tax revenues from 
individuals and corpora tions rose from US$135.69 million in 2005/6  to US$166.44 m illion in 2008/09 
(not adjusted for inflation which in that period av eraged 9%).  In addition, the introduction of the 
VAT has further extended the tax base.   
45. The GoL is equally pursing alternate methods of diversifying its revenue base beyond tax 
increases since these can potentially stifle developm ent of the private sector.  Rather, the multi-tier 
strategy involves among others, stimulating employ ment creation, investment in infrastructure, 
regulatory reform of the justice, financial and non-financial institutions, a ttracting FDI to develop 
services sectors like tourism as well as business climate reform.  This strategy was a contributing factor to Lesotho's robust economic performan ce from 2004-08, which averaged 4.4% per annum. 
VI. CONCLUSION 
46. The GoL remains committed to the process of tr ade liberalization with a view to maximizing 
benefits and enhancing all processe s that contribute towards the de velopment and economic growth of 
the country. 
47. Despite the positive economic performance sin ce the last Trade Policy Review, there 
continues to be challenges facing Lesotho's exports and revenue position, which could derail her long 
term economic growth.  The GoL has put into pl ace a Poverty Reduction and Growth Strategy and 
Vision 2020 to facilitate private sector led economic gr owth while maintaining the role of government 
as an "enabler" through sound macroeconomic ma nagement, the provision of support services and a 
sound financial system.  Specific initiatives include  but are not limited to trade facilitation and 
investment climate improvements, expansion of the tourism and agricultural sectors and the provision 
of core economic infrastructure like ICT. Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 23 
 
 
 REPORT BY NAMIBIA 
I. EXECUTIVE SUMMARY 
1. In the space of just a few years, a truly new world has taken shape before us – a world in 
which mobility of financial capital and technology  is total, free of cost, instantaneous and 
uncontrolled and  trade in products and services has been greatly liberalized. 
2. The financial crisis and the ensuing credit cr unch and the consequent slowdown in demand in 
many advanced economies ha ve engendered significant uncertainty about the short-term outlook for 
the world economy. 
3. In response to this dichotomy, the Governme nt's central policy objective is to promote 
economic growth and development and trade and investment promotion are seen as important 
elements in attaining this goal.   
4. Multilateral, regional and bilatera l agreements constitute important elements in the national 
trade policy framework, aimed at promoting Na mibia's participation in the world economy – 
increasing as well as improving market access for its e xports.  Therefore, Namibia is a member to 
various regional and multilateral trade arrangeme nts designed to provide the country with 
opportunities to nurture the right e nvironment through which entrepre neurship and investment could 
thrive.   
5. To take advantage of windows of opportunity at the multilateral level, Namibia is a member 
of the World Trade Organization that encourages and promotes a predictable rules-based trading 
regime through which Namibia could confront and addresses the challenges of industrialization and 
development.   
6. However, trade liberalization agreements to wh ich Namibia is party to and regional economic 
integration portend an adjustment process that  may hold opportunities but also threats. 
7. This government policy statement looks at the im plications of the global financial crisis on 
Namibia, the sectoral strategic policy paradigms on so me few key priorities and ends with concluding 
remarks with respect to Namibia's partic ipation in the multilateral trading system. 
II. GLOBAL FINANCIAL CRISIS AND THE DOMESTIC ECONOMY 
8. The global financial crisis, brewing for a while, r eally started to show its effects in the middle 
of 2007 and into 2008.  Much has been said about  the global financial crisis and the resulting 
economic down turn.  There is now a worldwide consen sus that indeed it is a global crisis from which 
no country is spared.  This calls for global reac tions, but it also calls for domestic interventions. 
9. While there was a global consensus that globa l output growth would decrease as a result of 
the crisis, the proportions of such a decrease could not be exactly predicted.  By now global output 
projections for both 2008 and 2009 have been revi sed downwards, with output projections for 2009 
being barely above breakeven and most major ec onomies expected to experience negative growths. 
10. The global financial crisis poses risk to the economic outlook of Namibia.  Subdued growth 
means reduced demand for our e xport products and decreased commodity prices will exert downward 
pressure on profitability of companies.  This in  turn erodes the public revenue base and further 
worsens the unemployment situation in the country.   WT/TPR/G/222 Trade Policy Review 
Page 24 
 
 
11. The local economy continued its gradual slow down since quarter fourth of 2008 and first 
quarter of 2009, with consecutive negative grow th being recorded in two quarters and which 
technically placed Namibia in a recession.  Ex cept for albeit positive performances from the 
electricity sector and an improving manufacturing sector, most sectors either slowed or reported 
negative growth, with sectors such as construction, wholesale and retail, transport and 
communication, fishing and mining registering negative grow.   
12. Preliminary indicators put GDP growth for 2008 at 2.4%.  In addition to the unfavourable 
global developments that negatively impacted on export-oriented industries, the domestic economic 
slowdown is also attributed to weak output in the primary industry and a sharp deceleration in 
consumption.  For 2009, the economy is expected to further slow down to 1.1%. 
13. However, the economic outlook beyond 2009 holds some promise.  During this period, 
growth will mainly be driven by both private and government investment.  New investments are 
expected in the mining, water and electricity as well as in the construction sectors.  Imports are expected to rise as a response to slightly hi gher demand in consumption and investment. 
14. Oil prices have been climbing up since the be ginning of 2002 and reached a high level of 
more than US$140 per barrel in 2008 and this had an impact on the domestic economy as reflected in 
the increase of local retail prices.  As Namibia imports more than 50% of her fuel requirements from South Africa, it is rational to assume that price fl uctuations in the commodity will often have spill 
over effects for the economy.  The price however descended as from 2008 to a range of US$50-70 per 
barrel which resulted in relief on local retail prices.  With international crude oil prices increasing to 
over US$66 per barrel in the second quarter of this year, implications for the Namibian economy were 
not far fetched. 
15. While the increase in oil prices on the internationa l arena was attributed to threats of supply 
disruption from some of the world's major oil exporting economies, for the Namibian economy, the high oil prices coupled with volatile currency ma rkets spurred the fuel price increases.  For 
consumers, the trend of successive price increases will reduce their purchasing power unless they 
adjust to the new price levels. 
16. Food prices rose in May 2008 by 16.5% compared  to prices in May 2007 and by even 40% 
compared to May 2005.  Like governments in other parts of the world, the Namibian government also came under pressure to intervene and decided to reduce Value Added Tax (VAT) from 15% to 0% on 
staple food items such as sunflower oil, fat, baking flour, bread and beans.   
17. In response to this crisis, Namibia believes it is critical to encourage domestic savings, boost 
investment in infrastructure, attract forei gn direct investments and improve productivity. 
III. SECTORAL STRATEGIC POLICY PARADIGMS 
(1) A
GRICULTURE  
18. The agriculture sector in Namibia can be cate gorised into two main areas, livestock farming 
and crop farming.  Livestock farming constitut es a significant portion of Namibia's agricultural 
output, contributing about 70% of total output by va lue of the sector in 1995 before easing to account 
for only 59% in 2006.  Crop farming which accounted for only 8% of the total output of sector in 1995, more than doubled, reaching 17% in 2006.  D espite, the observed significant growth of crop 
farming, livestock farming continues to dominate the total agricultural output.   Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 25 
 
 
 19. Although the contribution of agriculture to GDP  has fallen continually since independence, 
and currently hovers around 6.0%, the sector still re mains the biggest employer accounting for almost 
30% of total employment.  Of great concern however, is the fact that the share of the agricultural sector to GDP in Namibia averaged at 11.7% for the first five years of independence, deteriorating to 
6.1% in 2006.   
20. Agriculture is the mainstay  of the Namibian economy and it underpins the social and 
economic fabric.  For Namibia, 70% of the populat ion lives in rural areas and depend on agriculture 
for livelihood.   
21. Market access of agricultural products from de veloping countries is a serious problem.  
Exports from developing countries are faced with tariff and non-tariff barriers.  These for example 
include: tariff escalation, tariff peaks, tariff rate quotas, special safeguard measures (SSG), sanitary 
and phytosanitary measures (SPS), and health sta ndards.  Namibian agricultural products like beef, 
lamb, grapes and fish face one or the other of th e abovementioned tariff and non tariff measures.  To 
this end, Namibia would strive for improved ma rket access for its agricultural produce during this 
round of trade negotiations. 
22. The issue of export subsidies needs to be defi ned more vigorously in order to address how 
food aid should be treated so that it does not b ecome detrimental to food production in developing 
countries and threaten their food security.  Sin ce Namibia has now been recognized as a net-food 
importer, this status would provide a safety–net  for Namibia to undertake alternative trade policy measures to offset possible negative effects of s ubstantive reduction in  export subsidies and the 
subsequent high food import bill.  This is a remark able achievement after num erous failed attempts in 
the past. 
23. The previous round of trade negotiations has managed to halt protectionist agricultural 
policies but it has not managed to bring the leve l of support down in developed countries because they 
tend to re-engineer their prohibited subsidies to other permissible domestic support measures and as 
such circumvent their reduction commitments.   
24. Special and Differential Treatment should be treated fairly as an integral part of Agriculture 
reform process and the Doha Development Agenda in totality. 
(2) I
NDUSTRIALIZATION  
25. The Namibian Government has initiated special  initiatives as vital and necessary interventions 
to bring about an urgent transformation of the economy in terms of producti on and trade relations.  
Critical to this intervention is the need to incr ease the contribution of the manufacturing sector to 
GDP and thereby create a healthy balance of payments.   
26. In support of these objectives, the Government of  the Republic of Namibia, in 2004, adopted 
a national vision "Vision 2030", as a long-term deve lopment framework reflecting the aspirations and 
objectives of the Namibian people and their future development trajectory towards an industrialized 
economy in 2030. 
27. Government's intervention to give a push to  these industrial development objectives entails: 
– provision of industrial infrastructure; – equity participation, where necessary in new manufacturing operations to ensure their 
 successful take-off; WT/TPR/G/222 Trade Policy Review 
Page 26 
 
 
– support of joint ventures and partnerships  between local and foreign investors; 
– support of the SMEs and their access to financing.  28. The Government regards industrial tariffs as strategic legitimate policy tools to achieve 
industrialization policy imperatives with the view to pr ovide for protection of infant industries as well 
as an important source of revenue generation.  Namibia therefore guards against negotiating NAMA 
modalities that would call for substantive reducti on of industrial tariffs in SACU without the 
necessary adjustment support for alternative policy instruments.   
29. Equally, significant reduction of industrial tariffs  in its export markets would result in erosion 
of preferences that would render Namibian produc ts to compete directly with industrialized 
economies in the same markets.   
30. A large question mark remains over potential ag reements for steeper tariff cuts on certain 
categories of products known as "sectoral initiatives"  in NAMA negotiations.  There could be scope 
for such additional negotiations once the overall m odalities are adopted.  The products identified of 
potential export interest to Namibia include am ong others; fish and fish products, textiles and 
clothing, leather and leather products, chemicals, electronics.   
31. The harmonization of tariffs in these sectors or th eir elimination would have adverse effect on 
Namibian export interests as this would potentia lly erode the competitive edge and preferential 
margin Namibia enjoys over other exporters.  C onsequently, arrangements like AGOA could become 
redundant. 
(3) S
ERVICES  
32. Namibia recognizes the important role of services in the economy, as well as the contribution 
it can make to growth, development, and the successful integration of Namibia into the global economy.  An efficient services sector, particul arly the key infrastructural services such as 
telecommunications, transport, energy, and financia l services, has economy-wide impacts that can be 
enhanced through appropriate liberalization strategies, multila terally and regionally.   
33. The continuing reform of services will provide th e necessary conditions for the realization of 
economic objectives in agriculture, mining, and manuf acturing, especially the geographic spread of 
economic activity, and the intensification of value-added and SME-based activity. 
34. Consolidating the institutional and regulatory framework remains a key challenge and while 
Namibia has already made GATS legal commitments in respect of tourism and business services as it relates to engineering consulting services, she considers to improve its existing schedule of 
commitments and deepen its services liberalizati on efforts by assessing liberalization opportunities in 
sectors of strategic interest and priority that can spur growth and job creation. 
35. Services trade liberalization does not per se br ing automatic benefits to the developing 
countries.  They still face a number of critical  barriers to their services exports-ranging from 
prohibition of access to services markets (e.g. national ity, residency or visa requirement);  price based 
measures (entry and exit taxes, visa fees); technical standards and licensing requirements.   
36. However, benefits from liberalization are not automatic without the appropriate preconditions 
and policies to encourage and enhance technological  capacity and diffusion as well as complementary 
policies to help improve access to essential servi ces for the poor.  The Government of Namibia Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 27 
 
 
 endeavours to address the above ch allenges and exploit the opportuniti es services liberalization could 
offer as outlined in its national development plans and Vision 2030. 
(4) MINING  
37. Mining sector is considered one of the main drivers for the Namibian economy and accounted 
for 12% of GDP in 2007, up from 10% in 2006 and also accounted for 60% of foreign-exchange 
earnings and roughly a third of fixed capital formation. 
38. Diamonds remain a key component of the Namibi an economy, and despite the impact of the 
global financial crisis on the commodity, diamonds co ntinue to disproportionately contribute towards 
the GDP and state revenue generation. 
39. The strategic importance of diamonds to the count ry's economy cannot be overstated.  It is 
against that background that, diamond security, cont inued stability, and the growth of the diamond 
industry in Namibia are of paramount importance. 
40. However the mining sector has experienced a dow nward trend with the advent of the global 
economic crisis which suppressed demand for commod ities.  Namibia has not been spared this 
onslaught and this consequently led to the scaling back of diamond production from November to 
January and subsequent suspensi on of production for three months (from March to June 2009) with 
the production resuming in July 2009. 
41. Although the impact of the crisis on the African  economies was expected to be limited, with 
most of the economies being dependent on commodities,  the impact of decreased commodity prices is 
already taking its toll. 
(5) FISHERIES  
42. The fishing sector was one of the drivers of the growth in the Namibian economy during the 
1990s but its growth has since declined graduall y.  The poor performance of the fishing industry 
observed since the end of 2006 continued during 20 07, albeit at an improved rate.  During 2007, we 
saw a decline in the growth of the fishing sector of  about 3.7% compared to 4.8 decline in 2006.   
43. The value added for the fishing industry declined  by 9.8% in the third quarter of 2007, which 
was better than a decline of 18.1% recorded in the second quarter of 2007.  Th e slight improvement in 
the value added of this sector compared to 2006 w as due to a significant increase in pilchard landings 
of 206.5% during the third quarter of 2007, re lative to the corresponding period during 2006. 
(6) TOURISM SECTOR  
44. The tourism industry in Namibia is well deve lopment and ranks highl y internationally.  
According to the World Economic Forum tourism co mpetitiveness report, Namibia scores well in the 
provision of infrastructure such as air, ro ad, and port infrastructure and is ranked 4th in sub-Sahara 
Africa.   
45. The country's natural resources and unspoiled environment, in addition to its competitive 
pricing structure serve as advantages for attracting t ourists.  The report however found that there is 
room for improvement in areas of health and hygiene, information and communication technology 
and the availability of qua lified human resources in the tourism sector.    WT/TPR/G/222 Trade Policy Review 
Page 28 
 
 
46. However, with the financial crisis, the tour ism industry is equally facing contraction and 
depressed global demand. 
(7) AID FOR TRADE  
47. Namibia's trade-related needs are broad and pose a serious challenge.  Many of the issues 
have been addressed at one point or another by bilateral donors, the WTO and other organizations, 
either regionally or nationally, but these efforts seem to  have been insufficient to  solve all the issues at 
hand.    
48. Hence, Namibia would require and is working on a long-term Aid for Trade strategy with 
requisite resources targeted at mainstreaming trad e in national and regional development strategies 
and design appropriate home-grown interventions. 
49. Namibia wishes to focus on a broad and long-t erm approach, which would include increased 
development assistance, channelled through the treasury  on a predictable basis.  This will not only 
ensure greater transparency of ai d for trade flows, but also better coordination in the allocation of 
resources to achieve more effectively nationa l trade-related capacity building objectives. 
IV. CONCLUSION 
50. Namibia attaches great importance to the multila teral trading system and moreover to the 
Doha Development Agenda.  Multilateral nego tiations gives small countries like Namibia the 
collective leverage to negotiate deals with bigger developed countries that are development-friendly. 
51. With the establishment of the Namibian pe rmanent representation at the World Trade 
Organization in Geneva in 2004, this developmen t has bolstered our pro-active participation and 
engagement in the history of the multilateral trad ing system for the first time as an independent 
nation. 
52. Namibia believes that it is only through mu ltilateralism that fundamental issues of trade 
distorting subsidy programs, trade and environmen t, erosion of trade preferences of developing 
countries could be effectively addressed a nd resolved and legally enforced.   
53. With the advent of the global financial crisis  which has since snowballed into an economic 
crisis, the failure of the July 2008 mini-Ministeri al in Geneva represented a lost opportunity to place 
the multilateral trading system on a much firmer a nd more open basis, and to put in place more 
practical arrangements and effective provisions for tr ade to help spur the global economy out of its 
current status to facilitate the integration of the developing countries into the evolving world 
economy. 
54. Members should resume the negotiating process w ith a renewed sense of urgency and purpose 
to execute the Doha Development Agenda.  Official s in Geneva, despite their technical capabilities, 
will not be in a position to revitalize and sustain the negotiations without the requisite political will.   
 
 Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 REPORT BY SOUTH AFRICA  
I. INTRODUCTION 
1. This is South Africa's third trade policy review  since the advent of democracy in 1994.  The 
trade policy review takes place amid the most seri ous financial crisis a nd global economic downturn 
in generations which threatens livelihoods, jobs a nd social cohesion across the globe.  The unfolding 
financial crisis that emerged in September 2008 come s on the heels of a major global shock from high 
food and fuel prices that has imposed a heavy economic burden on many countries and significantly increased the incidence of poverty and vulnerability.  Regrettably, the significant gains registered by 
some developing countries including South Africa towards meeting the Millennium Development 
Goals (MDGs) would be in jeopardy.  Renewed effo rts are required to keep us on track towards the 
Millennium Development Goals, cognisant of the re ality that poverty anywhere constitutes a danger 
to prosperity everywhere. 
2. Globalisation requires open markets and fair ru les.  But balanced and sustainable global 
growth needs much more that this:  it requires that  the nations of the world to cooperate deliberately 
in an ongoing collective endeavour.  Such cooperati on does not come cheaply.  It requires that each 
country cede a degree of its national sovereignty fo r the realisation of the collective good.  Such 
commitments may be more difficult to mobilise than  all the funds required to respond to the economic 
crisis, but global action is needed to ensure that the hard won gains of the last decade are preserved 
and that conditions for future progress are restored.  South Africa stands ready to make whatever contribution it can, within its means, to support a truly collective commitments. 
3. The South African economy has shown signs of growth since the beginning of the new 
millennium.  This has seen the deepening of structur al changes such as the em ergence of the services, 
low inflation levels and real interest rates, in creased gross fixed capital formation and changes in 
consumer consumption patterns.  These structur al changes have had a positive impact on economic 
growth.  The growth in the economy can be attri buted to a positive political transition, sound macro 
economic policies and favourable  global economic conditions. 
4. While strong economic fundamentals exist there is a need for a more focused approach to 
support continued economic growth  and employment creation in or der to achieve the goals of 
reducing poverty and unemployment by 2014.  Raising investment levels, increasing 
labour-absorption, broadening ec onomic participation and increasing competitiveness have been 
identified as key areas of intervention in the ec onomy where government can make a positive impact. 
II. DEVELOPMENTS IN THE MACRO-ECONOMY 
5. The economy grew at an average of 5% over the last five years.  The economy has been 
growing uninterrupted for eight consecutive year s propelled, among others, by robust consumer 
spending, strong fixed investment activity, and surge in commodity prices.  The gross domestic expenditure, which comprises consumer spending,  general government spending as well as fixed 
investment activity, has expanded by an average a nnual rate of 7.5% since 2004.  Fixed investment 
increased by almost 22% in 2007 – the fastest investme nt growth in almost two decades.  Government 
investment was a major contributor, underpinned by  expenditures attributable to the 2010 FIFA 
Soccer World Cup; defense spending, and improvem ents in national roads and infrastructure.  
Buoyant consumer spending has been underpinned by a continued rise in real disposable incomes, 
substantial credit extension, add itional employment opportunities, as well as high levels of consumer 
confidence.  All these lead to a reduction in unem ployment from 30.5% in 2003 to 23.1% in 2008. WT/TPR/G/222 Trade Policy Review 
Page 30 
 
 
6. In 2007, the targeted inflation rate had breached the upper end of the inflation target range for 
the first time since August 2003.  Until the first half of 2008, containing inflation was the main 
concern in setting macroeconomic policy.  To this en d, interest rates were hiked since June 2007 in an 
effort to bring back the CPIX inflation within the target range of 3-6%.  Although consumer spending 
remained resilient over the past year, the impact of higher interest rates is beginning to be felt 
amongst interest-sensitive items.  Moderate rates th roughout the remainder of the year due to the 
following factors:  higher interest rates;  rising consumer indebtedness;  the implementation of the 
new National Credit Act;  and stronger inflationary pressures. 
7. In a number of developing countries including  South Africa, prospects of robust economic 
growth are dim in the coming years hence poverty and unemployment has and will increase.  The 
effects of the crisis saw a sharp reversal in the South African economy's longest period of growth in 
recent times, with the quarterly GDP growth rate declining from 5.1% to -1.8% between the third to 
the fourth quarter of 2008.  The economy contracted by  a further annualised rate of 6.4% in the first 
quarter of 2009, the sharpest fall in 25 years, marking the onset of a clear recession. 
III. RELATED POLICY DEVELOPMENTS 
(1) GROWTH AND DEVELOPMENT SUMMIT  
8. Government in conjunction with other c onstituencies of the National Economic Development 
and Labour Council (NEDLAC) convened the Gr owth and Development Summit (GDS) in 
June 2003.  The GDS identified four key areas that  require to be addressed through individual and 
joint interventions from the NEDLAC constituencies: 
• more jobs, better jobs and decent work for all;  
• addressing the investment challenge; 
• advancing equity, developing skills, creati ng economic opportunities for all and extending 
services; and 
• local action and implementation for development. 
(2) ACCELERATED SHARED GROWTH INITIATIVE FOR SOUTH AFRICA (ASGISA) 
9. The core objective of this government as set out in 2004 is to halve poverty from one third to 
one sixth and unemployment to a level of 15% by  2014.  The Accelerated and Shared Growth 
Initiative for South Africa, launched in February  2006, seeks to accelerate the rate of economic 
growth, substantially increase the employment rate, and broaden the impact of economic development 
so that South Africa can meet its development goals.   
10. To achieve the target of halving unemplo yment and poverty by 2014, the economy would 
have to grow at an average rate of at least 4.5% in the period to 2009, and by an average of 6% in the 
period 2010 to 2014.  AsgiSA identified the followin g six 'binding constraints' which militates against 
achieving desired growth rates:  
• the relative volatility of the currency;  
• the cost, efficiency and capacity of  the national logistics system;  Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 • shortages of suitably skilled labour, and the sp atial distortions of apartheid affecting 
low-skilled labour costs; 
• barriers to entry, limits to competition a nd limited new investment opportunities;   
• the regulatory environment a nd the burden on small and medium enterprises (SMEs);  and 
• deficiencies in state organization, capacity and leadership. 
11. From its conception, AsgiSA made a strong ca ll for a robust industrial policy as an important 
tool in the pursuit of employment growth and sustainable gross domestic product growth.  The 
National Industrial Policy Framework (NIPF) is desi gned to address the binding identified in AsgiSA, 
particularly regarding sector development strategi es including the development of new industries and 
new businesses.   
(3) NATIONAL INDUSTRIAL POLICY FRAMEWORK (NIPF)  AND INDUSTRIAL POLICY ACTION 
 P LAN (IPAP)   
12. South Africa has implemented a number of indus trial policy initiatives since 1994.  However, 
it has not until now produced a comprehensive statement of government's approach to 
industrialisation and industrial policy.  Cabinet adopted the National Industrial Policy Framework 
(NIPF) in January 2007.  The NIPF articulates governme nt's broad approach to industrialisation in the 
context of AsgiSA and its targets of halving une mployment and poverty by 2014 through accelerated 
growth of at least 6% from 2010.   
13. The objectives of the NIPF are to promote diversification, facilitate progression up the value 
chain and foster growth in labour-intensive sectors of the economy.  It aims to promote the growth of a strong local industries and service economy through in terventions in identified sectors.  In this 
regard, the NIPF will serve as the reference point for all the whole of government in support of 
AsgiSA goals. 
14. Implementation of the NIPF is spelled out in the Industrial Policy Action Plan (IPAP) 
approved by Cabinet in July 2007.  The focus of  the work on industrial development will be on 
implementing sector strategies including those that have been finalised for business process outsourcing (BPO) and tourism, identifying action plan s for priority sectors in which strategies have 
been developed such as metals, chemicals, automotiv es, and clothing and textiles.  Furthermore, work 
will be undertaken to finalise strategies and acti on plans for additional sectors such as capital goods, 
agro-processing, film and creative industries a nd capital goods.  Thus the development and 
implementation of sector strategies interventions  will be a continuous process, with priorities 
determined for each period, to ensure the broadest possible stimulation of growth and employment in 
manufacturing and services sectors. 
15. The Regional Industrial Development Strategy (R IDS) has been developed in support of the 
NIPF.  The RIDS proposes interventions to address th e regional disparities, key to this being the 
financing of regional development.  Going forw ard, business cases for various proposals will be 
developed as part of an implementation plan for the RIDS. 
(4) T
RADE POLICY AND STRATEGY FRAMEWORK  
16. Trade policy and trade performance are impor tant elements in South Africa's economic 
growth and development strategies.  The country init iated a process, which is still ongoing, to review WT/TPR/G/222 Trade Policy Review 
Page 32 
 
 
its trade policy in mid-2007.  The trade policy review  was motivated by the n eed to mainstream trade 
into the government's broader gr owth and development strategy as set out in the Accelerated and 
Shared Growth Initiative of South Africa (AsgiSA) and to ensure that trade policy explicitly supports 
and is aligned to the NIPF.   
17. The trade policy review proposes that South Afri ca adopt a strategic tariff policy approach to 
ensure the economy is not locked into commodity -based production and export over the longer term.  
Broadening and upgrading the industrial base to  encourage production and export of more 
sophisticated value added products requires purposeful  intervention in the industrial economy aimed 
at achieving more dynamic, competitive advantages.  As tariffs are instruments of industrial policy 
and have implications for capital accumulati on, technology change, productivity growth, and 
employment, the tariff reform programme needs to be carefully calibrated, taking into account the 
specificities of each sector and its pr oduction possibilities.  The NIPF states " our fundamental 
approach is that tariff policy should be decided prim arily on a sector by sector basis, dictated by the 
needs and imperatives of sector strategies ". 
18. As a general guideline, tariffs on upstream input industries could be reduced or removed, in 
the interests of lowering input costs into downstrea m manufacturing.  In doing this, however, we will 
also need to take into account domestic productio n capabilities/potentialities as well as the degree of 
global distortions on these products.  Tariffs on down stream industries, particularly those that are 
strategic from an employment or value-addition persp ective, may be retained or gradually changed in 
a manner that ensures long-term sust ainability and global competitiveness. 
IV. TRADE-RELATED POLICY DEVELOPMENT 
Agriculture 
19. In striving towards a united and prosperous agri cultural sector, and in support of sustainable 
agriculture and rural development the fo llowing objectives have been identified: 
• Ensuring availability and access to sufficient safe and nutritious food. 
• Eliminating skewed participation and inequity in the sector. 
• Increasing growth, income and remunerative job opportunities in agriculture. 
• Enhancing the sustainable management and effi cient use of natural agricultural resources and 
production inputs. 
• Ensuring efficient and effective governance and partnerships. 
• Ensuring national biosecurity and effective risk management. 
20. A major challenge for the agricultural sector has been to accelerate the pace of land and 
agrarian reform and to embark on an integrated programme of rural development.  For this purpose 
the Land and Agrarian Reform Project (LARP) was developed with specific targets.  The LARP will 
achieve an alignment of resources between nationa l, provincial and local government in farmer 
support and to accelerate land and agrarian reform. Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 33 
 
 
 21. As part of the support for land reform benefici aries and resource-poor farmers, major progress 
has been made with the Comprehensive Agricultu ral Support Programme (CASP) with the following 
pillars: 
• Information and knowledge management. 
• Technical and advisory assistance and regulatory services. 
• Training and capacity building. 
• Marketing and business development. 
• On- and off-farm infrastructure and production inputs. 
• Financial assistance. 
22. Regarding financial assistance, a micro-finan ce scheme (MAFISA) has been established to 
support small producers, entrepreneurs and emerging farmers mainly in rural areas.  During 2008, a 
AgriBEE Charter was introduced charting a clear wa y for the transformation in the sector through 
partnerships for emerging farmers.   
23. A challenge for the agricultural sector was rising food prices, globally, nationally and at the 
household level.  The Department of Agriculture embarked on a campaign called Ilima/Letsema that 
seeks to accelerate and improve agricultural crop production with agricultural starter packs for 
household vegetable production and the promotion of food gardens.  This campaign further includes 
the rehabilitation of land and irrigation schemes  to increase production and the income of 
beneficiaries. 
V. INTERNATIONAL ARRANGEMENTS AND TRADE NEGOTIATIONS 
(1) NEW PARTNERSHIP FOR AFRICA 'S DEVELOPMENT  
24. Governance and democracy play a critical role in Africa's quest of social, political and 
economic renewal.  In recognition of the impera tive of good governance for development, African 
countries, over the last decade, have made remark able strides and commitments partners towards good 
governance in Africa.  The launch of the NEPAD in 2001 and the adoption of the African Peer 
Review Mechanism (APRM) in 2003 ar e important landmarks in the effort to develop common values 
and standards of good governance in Afri ca.  The mandate of the APRM is to " foster the adoption of 
policies, standards and practices that lead to pol itical stability, high economic growth, sustainable 
development and accelerated sub-regional and contin ental economic integration through sharing of 
experiences and reinforcement of successful and best practice, including identifying deficiencies and 
assessing the needs for capacity building ." 
25. The APRM is a voluntary mechanism available to all African Union (AU) member states.  
Accession to the APRM entails submitting to peri odic peer reviews which include commitment to 
implementing the National Programme of Acti on (NPOA) arising from peer review, and 
operationalising the agreed parameters for good govern ance across the following four thematic areas: 
democracy and Political Governance, economi c Governance and Management, Corporate 
Governance, and Socio-economic Development.  By  2007, there were 27 AU member countries that WT/TPR/G/222 Trade Policy Review 
Page 34 
 
 
have voluntarily acceded to the APRM1.  Since its inception in 2003, the APRM Panel has launched 
reviews in 14 countries and fielded country re view missions to five countries which include 
South Africa in 2006.   
(2) SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)  TRADE PROTOCOL AND 
 S OUTHERN AFRICAN CUSTOMS UNION (SACU) 
26. Since 1994, a significant feature of South Africa 's international engage ment involved working 
to support African economic integrati on, particularly in Southern Afri ca.  In advancing the integration 
agenda in SACU and SADC, it is increasingly clear that trade integration must be complemented with more effective policy coordination to build and dive rsify production in the region.  This is essential if 
the opportunities that arise from more open regional ma rkets are to be shared equitably.  Work on 
infrastructure development in Southern Africa, part icularly through the spatial development initiative 
(SDIs) remains a key priority.  The success achieve d in deepening and extending SDIs in the region 
has laid the basis for extending the programme across Africa in support of NEPAD objectives. 
27. The new SACU Agreement, entered into force in  July 2004, calls for, among others, i) the 
establishment of a new supra-national institutions including a Tribunal to settle disputes, a SACU 
Tariff Board to determine changes to the common extern al tariff and a Secretariat;  ii) development of 
common SACU policies in, amongst others, industr y, agriculture, competition and unfair trade 
practices;  and iii) a revenue sharing formula (RSF) that weights shares of customs revenue and excise 
taxes in favour of Botswana, Lesotho, Nami bia, and Swaziland (BLNS), including though a 
development component.  Nevertheless, progr ess on these fronts has been inadequate.   
28. The regional economic programme in SADC aims to combine market integration with policy 
coordination and sectoral cooperation in a broad development project through the SADC Trade 
Protocol.  The free trade area - the SADC Trade Pr otocol – was launched in  August 2008 and this 
being the case about 85% of goods is traded duty fr ee.  By 2012, 99% of intra-SADC trade will be 
duty free.  Notwithstanding these achievements, seve ral SADC Members have yet to fully join the 
free trade area.  Furthermore, several Members ha ve experienced difficulties in meeting the tariff 
liberalisation obligations as set out in the SADC Trade Protocol. 
(3) F
RAMEWORK FOR SOUTH AFRICA 'S RESPONSE TO THE INTERNATIONAL ECONOMIC 
 C RISIS  
29. The global financial crisis, which could tip the world economy into a recession in 2009, did 
not originate in developing countries but they ar e facing the harsh impact of declining commodity 
prices and falling export demand that are its result.  Added to this, financing pressures are becoming 
more acute, and are expected to remain for an extended period of time.  Access to private trade finance has virtually dried up, and the prospects fo r foreign direct investment will be bleak over the 
foreseeable future. 
30. Policy responses in the advanced economies are exacerbating the dangers that emerging 
economies face.  Bank rescue progra mmes and deposit guarantees are spurring a flight to safety, while 
political pressures mount to ensure that credit is extended at home is leading to a marked slowdown of bank lending to emerging markets.  Current suppor t programmes go beyond neo-Keynsian policies of 
deficit funding of infrastructure programmes and pub lic work programmes to include targeted support 
to national industries.  On the latter, competition is underway to determine which firms are supported 
                                                     
 
1 Member states include: Algeria, Angola, Benin, Burkina Faso, Cameroon, Egypt, Ethiopia, Gabon, 
Ghana, Kenya, Lesotho, Malawi, Mali, Mauritius, Mozambique, Nigeria, Republic of Congo, Rwanda, 
Sao Tomé and Principe, Senegal, Sierra Leone, South Africa, Sudan, Tanzania, Uganda and Zambia. Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 35 
 
 
 and retained, and in which locations.  Calls to resi st protectionist measures, against this background, 
are sounding increasingly hollow.   
31. On all counts, it is clear that developing c ountries have recourse to fewer measures and, due 
to their weaker fiscal ba ses, the quantum of financial support they  are able to deploy is considerably 
less than that available to industrial countries.  In dustrial countries must therefore provide leadership 
in resisting protectionist measures.  Developing count ries have a legitimate case in being able to use 
all WTO-compatible measures to provide support to  their industries.  Moreover, the impact of 
developing country measures is likely to have less systemic impact and will pale in significance as 
compared to measures taken by industrial countries. 
32. South Africa has hitherto not introduced new policy measures with trade distorting or 
protectionist consequences despite the country ha ving one of the highest poverty and unemployment 
levels in the world.  Nevertheless, the country  may have to respond to the crisis following the 
adoption of the Framework for South Africa's Response to the International Economic Crisis  in 
February 2009.  The Framework for South Africa's Response to the International Economic Crisis  
obliges government, in keeping with dictates of the National Industrial Po licy Framework and the 
ongoing work relating to the Trade Policy Review Framework, if the evidence leads to the conclusion 
that it is necessary to reduce or ev en remove duties where this will be  of benefit to the industries and 
sectors, this will be pursued.  At the same ti me, where processes of "self-discovery" and the 
development of sector strategies lead to the conclusi on that some particular industry or sector requires 
tariff protection for a period of time, that support should be provided so long as it is WTO-compatible 
and is supported by a sector strategy and evidence. 
(4) MULTILATERAL TRADE NEGOTIATIONS IN THE WTO 
33. South Africa has participated actively in the WTO since 1994.  The membership forged in 
coalitions in the WTO, such as the Africa Group, th e Cairns Group of agricultural exporters, G-20 and 
NAMA-11; has been important to advancing our view s.  In our view, an equitable and balanced 
trading system that fully takes into account deve lopmental prospects would enhance the legitimacy 
and stability of the system.  South Africa supported the launch of the round on the basis of the 
mandate of the Doha declaration that aimed to " … place the needs and interests of developing 
countries at the heart of [its] work programme ". 
34. The emerging outcome – contained in the so-calle d "Package" tabled in the July 2008 – in the 
modalities phase of negotiations is unbalanced and ine quitable.  Although contested and not agreed by 
all, the package envisions comparatively moderate reforms in agriculture in exchange for excessive 
demands to reduce industrial tariffs in developing countries.   
35. For South Africa, a particularly heavy price is  demanded.  While there was little prospect of 
new market access in agriculture, South Africa confronted  the prospect of cuts in applied tariffs of up 
to 38% of our industrial tariff lines, with 23% faci ng a cut of greater than 30%.  This would reduce 
policy space for building our industrial base a nd, most importantly, expose vulnerable labour 
intensive industries to cheaper imports with pot entially devastating effects on employment.   
36. The reductions would extend the historic injustice South Africa suffered in the Uruguay 
Round where we were required to take developed country tariff cu ts.  Although South Africa, and 
other members of the Southern African Customs Union, have managed to secure some understanding 
that due to the outcome of the Uruguay Round th e industrial tariff cutting formula would have a 
disproportionate impact on our tariff regime bey ond what was envisioned for all other WTO Members 
(developed and developing), the flexibi lities offered were wholly insufficient. WT/TPR/G/222 Trade Policy Review 
Page 36 
 
 
37. South Africa agrees to continue with the nego tiations on all areas of the single undertaking.  
We support the call for an early harvest on cotton; duty-free quota-free market access, and other issues of concern to the poorest members.  Despite  the commitments made at important fora since 
July 2008, we have been unabl e to conclude an agreement on modalities – a prerequisite to 
concluding the Doha Development Ag enda.  While we agree on the importance of an early conclusion 
to modalities but setting an unrealistic timetable without  due consideration to its content could lead to 
another failed attempt to conclude  modalities, and be even more damaging to the credibility of the 
global trading system. 
(5) S
OUTH -SOUTH COOPERATION  
38. As a relatively small open economy, South Africa must grow the size of the market for its 
products and services, among others, through incr easing market opportunities in the global economy 
especially in the emerging markets of the South.  The past decade has underlined the rise of new 
dynamic markets of the South such as China, India and Brazil.  Recent analysis shows that over the 
last decade, developing countries share of interna tional trade has grown dramatically, accounting for 
around 37% of world trade in 2007.  Moreover, the dynamism of the South is driving growth today 
with a substantial part of global GDP growth and trade being on account of countries of the South and 
intra-South trade.   
39. Government will work to ensure that South A frica relates to these countries and regions in a 
manner that best supports our future growth trajectory.  Our development processes are at times fragile given the widespread poverty, unemploymen t and a host of other development problems; it can 
be difficult to open markets if it places pressure  on domestic production or exacerbates unemployment 
and poverty.  It is therefore important that we pr omote mutually beneficial trends through enhanced 
linkages such as trade, i nvestment and technology transfer.  In this respect, we shall explore 
negotiating preferential trade agreements that a llow for a more strategic integration process. Members of the Southern Afri can Customs Union WT/TPR/G/222 
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 REPORT BY THE KINGDOM OF SWAZILAND 
I. INTRODUCTION 
1. The Third Trade Policy Review for Swaziland c overing the period 2004-09 has revealed the 
country's challenges in coping with the pace of tr ade liberalisation promoted by the World Trade 
Organisation (WTO) agreements.  Trade competit iveness for a small, landlocked and net food 
importing developing economy like Swaziland can onl y be achieved with continued assistance and 
cooperation from regional and inte rnational trading partners.  The assistance is required to 
complement the resources allocated by the Government to addressing the challenges.  This report 
presents an overview of Government's plan to redu ce the trade constraints raised in the Trade Policy 
Review.  The report also reflects Government's co mmitment to implement a transparent trade policy 
regime.   
II. ECONOMIC REFORM PROGRAMME 
2. External trade shocks such as the erosion of trade preferences on sugar and textiles and 
clothing, increase in use of non-tariff barriers to trad e, high energy and power prices remain a threat to 
the growth potential of the econo my of Swaziland.  Collectively, these factors intensify the domestic 
challenges posed by the surplus labour force, high poverty incidence, food insecurity, low capital 
accumulation and fiscal budget imbalance.   
3. Swaziland is implementing a fiscal policy refo rm programme that will support higher growth 
rates, increase employment, and provide the poor and marginalised communities with the necessary 
capabilities and infrastructure to participate in th e formal economy.  Thes e reforms are operational 
through the 2008/09 and 2009/10 budget and are embodi ed in the National Export Strategy (2006-09).  
The reform programme includes policy measures that  seek to reduce the vulnerability of the economy 
to external shocks by focusing on the following objectives:   
(a) Improving expenditure management, revenue co llection, governance and service delivery in 
the public sector and overall macroeconomic stability; 
(b) Strengthening institutional and human capacity and the legislation framework in order to 
reduce costs of doing business, attract more foreign direct investment and increase domestic investment; 
(c) Supporting industrial and export de velopment in order to improve trade competitiveness; and  
(d) Expanding the export base through economic diversification. 
4. Government has designed specific measures that w ill lead to the attainment of the objectives 
described above.   
(1) I
MPROVING EXPENDITURE MANAGEMENT , REVENUE COLLECTION , GOVERNANCE , AND 
 S ERVICE DELIVERY IN THE PUBLIC SECTOR AND OVERALL MACROECONOMIC 
 S TABILITY  
5. The annual budget priorities are based on the Na tional Development Strategy (NDS) and the 
Poverty Reduction Strategy and Action Plan (P RSAP).  These priorities are developed and 
implemented through a Sector Wide Approach (SWAP) system of budgeting which improves the link between policy and the budget and also emphasise s focus towards outputs and outcomes.  Since 
SWAP is fairly new in the Government system of  budgeting, it has only been implemented in fours WT/TPR/G/222 Trade Policy Review 
Page 38 
 
 
sectors.  These are health, education, agriculture, and water and sanitation.  Government aims to 
roll-out the approach to other sectors in the medium term.   
6. The adoption of the Public Procurement Regul ations (2008) and sub sequent implementation 
by Government ministries has started producing results.  These regulations also address fraud and 
corruption which are some of the factors behind unsatisfactory service delivery and public sector 
waste, especially in tendering and procurement.   Ministries have improved the management of 
procurement risks and also in accountability, e fficiency and overall control of government 
expenditures.  Government seeks to strengthen these regulations by drafting a Procurement Law, new 
Stores Regulations and a Procurement Manual.  In addition, the draft Finance Management Bill is 
currently being reviewed by stake holders and will be presented to Pa rliament in the course of 2009. 
7. The Revenue Authority Act (2008) provides for the establishment of a Revenue Authority.  
This Authority will be launched in December  2009 and will be supported by a budget of 
approximately US$25 million as reflected in the 2008/09 budget.  In the meantime, the Board of Directors for the Revenue Authority is operationa l and will oversee the transition from the current 
institutional framework.  Government approved a VAT policy in July 2009 and the relevant 
legislation is at drafting stage.  It is expected  that the value-added tax will be introduced in 2011 
although an assessment to bring this date forwar d is underway in response to the declining SACU 
revenue.  The benefits of the Revenue Authority will arise from an automation that will allow 
taxpayers to file their returns electronically.  This automation will complement the ASYCUDA system which is currently operational at main custom s clearing points.  This is expected to increase 
the collection of customs, excise and sales tax from the 2009/10 financial year.    
8. Swaziland's customs and excise legislation will also be amended to take into account the 
amendments currently being made on South Africa's Customs Act.  SACU Member States are expected to implement common customs legislation.   The amendment of the legislation for Swaziland 
will also be informed by the SADC Model Customs Act.   
9. The income tax framework will also go through ch anges in the medium term with a view to 
achieve the following objectives: improve the comp etitiveness of the economy of Swaziland; ensure a 
fair and equitable tax system across the different classes of taxpayers; and improve the collection of 
income tax revenue.  Government plans to repeal  the Graded Tax Act in 2009 because the costs of 
colleting this type of revenue exceeds the revenue ge nerated.  The Income Tax Order of 1975 has also 
been amended through the Income Tax Amendment Act (2008) in an attempt to provide relief to 
various classes of taxpayers.  This Act provides relief through a number of exemptions, including 
allowing partial exemption on bursary contributi ons, increasing the exempt portion of severance pay 
by widening the tax bands on Pay As You Earn (PAYE) and increasing the tax rebate applicable to 
the elderly.  It is also envisaged that the establishment of the Tax Advisory Committee which 
comprises various stakeholders and plays an important  role in the formulation of tax policy will be 
officially established through a Bill in 2009. 
(2) S
TRENGTHENING INSTITUTIONAL AND HUMAN CAPACITY AND THE LEGISLATION 
 F RAMEWORK IN ORDER TO REDUCE COSTS OF DOING BUSINESS , ATTRACT MORE 
 F OREIGN DIRECT INVESTMENT AND INCREASE DOMESTIC INVESTMENT  
10. The rural electrification programme continues with its implementation to benefit more 
schools, clinics, youth centres and homesteads.  Gove rnment recognizes that the sustainability of the 
programme depends on the future energy supply in th e country and Southern African region.  To this 
end, the country is investing in maximising the cap acity of hydro-power schemes.  One direct benefit 
of such an investment has been the reduction of po wer imports at peak hours.  Government is also Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 39 
 
 
 exploring renewable sources of energy such as wind and solar in order to reduce reliance on imported 
electricity and improve energy security in the country.   
11. Government is planning to increase fuel storage capacity in the country in order to safeguard 
economic activity.  A 90 days fuel reserve whic h will assist when there are disruptions in the 
refineries in South Africa will be c onstructed in the medium term.   
12. Telecommunications infrastructure is one of the key contributors to economic growth, 
therefore Government has supporte d the introduction of broadband services in the country.  There are 
efforts to secure sufficient access to international bandwidth which will enable the expansion of the 
broadband services in the country.  It is also exp ected that the economy will start benefiting from the 
Next Generation Networks (NGN) to support both fixe d and mobile connectivity in the medium term. 
13. In an effort to support SME development, a rural financing scheme has been established to 
assist small entrepreneurs in the rural areas who ar e unable to take advantage of the formal banking 
facilities.  This is still a pilot project which will be rolled-out to full scale in the medium term.  Other 
financing initiatives are in the form of recapitalis ation of FINCORP which is a Development Finance 
Institution and the separation of the development and commercial banking mandates for SwaziBank in 
line with regulatory requirements.  A strategic pa rtner is being sought for the implementation of the 
commercial mandate.  These initiatives will be stre ngthened by the draft small medium and micro 
enterprise (SMME) Economic Empowerment Bill ( 2009) which is currently being reviewed by 
stakeholders. 
14. There has been significant prog ress in the effort to strengthen capacity in the area of 
registration of foreign and domestic companies.  Th is has been facilitated by the automation of data 
capturing.  The Companies Bill (2009), an amendment of the Companies Act (1912) has been approved by Parliament and will be passed into la w in 2009.  The Bill seeks to ease costs of doing 
business.  Business facilitation will also be enhanced  through the amendment of the Trading Licences 
Order (1975).  The amendment will reduce the adve rtisement period requirement for applications 
before acquiring a licence from 21 days to 5 days.  The Shop hours Act (1955) has also been amended 
to allow all business establishments to open all hours and only observe Incwala  holidays.  These 
amendments are awaiting Cabinet approval and will be submitted to Parliament afterwards. 
15. The trade environment is subject to minimum restrictions on imports in Swaziland.  The 
Legal Notice No. 6 (2000) amended the import cont rol order by reducing the categories of goods 
subject to import control to 15.  The control is implemented for social and environment, health, 
sanitary and phytosanitary and securi ty concerns.  The import permits are issued by the Ministry of 
Finance in consultation with relevant ministries such as Agriculture, Health  and Commerce, Industry 
and Trade.    
16. The Unfair Trade Practice Act (2001) and the Competition Act (2007) have been established 
in order to correct for market and policy failures th at affect competition in the trading environment.  
The Competition Commission is responsible for m onitoring, regulating and preventing uncompetitive 
behaviour.  Launching the Competition Authorit y in November 2009 will provide the required 
institutional capacity to effectively implement the competition rules provided for in the Act.  The 
Authority is expected to coordinate the development of a competition policy.    
17. The services sector is growing remarkably in the economy albeit the environment is not fully 
liberalised.  Government recognizes that privatizati on of some of the public enterprises can increase 
investment, quality of service delivery and competition.  As a result, a roadmap is being used to 
implement the privatisation policy adopted in 2006.  The roadmap recommends the establishment of a WT/TPR/G/222 Trade Policy Review 
Page 40 
 
 
multi-sector regulator to ensure that price levels  charged by utilities in co mpensating for their heavy 
capital investment do not have an adverse impact on the poor.  In addition, the Public Enterprise Act 
(1989) has been amended in order to create the Public  Enterprise Agency (PEA).  It is expected that 
once passed, the legislation will provi de for the transfer of public ente rprises to be restructured and 
privatised to the control of the PEA.   
18. The labour market reforms proposed by the Em ployment Bill include elimination of child 
labour, strengthening Government support for HI V and AIDS programmes at the workplace and 
prevention of discrimination in employment.  It is also expected that the quality of work will improve 
generally because the Employment Act (1980) will be reviewed completely.  Some of the current 
interventions meant to provide employment oppor tunities include: the Lower Usuthu River Basin 
Project, Sikhuphe airport development, private and community based projects and the revival of the 
mining sector.   
(3) SUPPORTING INDUSTRIAL AND EXPORT DEVELOPMENT IN ORDER TO IMPROVE TRADE 
COMPETITIVENESS  
19. In promoting industrial development, Govern ment is implementing the Industrial Expansion 
Programme through the Master Plan which targets the procurement of land and the provision of the 
necessary services such as the road network,  electricity, water, waste disposal and 
telecommunications infrastructure.  One of the ch allenges the country is facing is the inability to 
utilize the SACU common external tariff to support industrial development in Swaziland.  Hence, the 
country seeks to undertake an industrial census that  will provide Government and other stakeholders 
with the necessary information on industry profiles to  support the industrial strategy.  The industrial 
strategy will complement the draft investment law.   
20. The draft investment law emphasises the need  for laws governing investment, government 
guarantees to investors, support services for the pr ivate sector, and wealth creation incentives for 
entrepreneurs.  It will increase the success rate of investment promotion activities carried out by the 
Swaziland Investment Promotion Authority (SIPA) .  SIPA has identified priority sectors for 
investment in the medium term.  These are: tourism (hospitality, holiday hous ing, health tourism or 
private hospitals, theme parks and a convention centre), private schools or regional universities, 
higher end textiles and fashion goods, electroni cs assembly, ICT, off-shore services, chip board 
production, electricity, anthricite and iron mining.  
21. Government and the private sector have recei ved technical support from the EC for export 
development.  The programme will include techni cal assistance for industrial engineering and 
management, handicraft product design, standards set ting, logistics and risk management and export 
consortia creation.  In addition, the programme will assist with organising missions for selected 
products (e.g.  food products, handicr aft or wood-based industries and tour ism) and targeted markets.   
(4) EXPANDING THE EXPORT BASE THROUGH ECONOMIC DIVERSIFICATION  
22. Swaziland has to attract more foreign direct i nvestment and facilitate local investment in 
order to transform the economy from over-reliance on a single-crop sugar and sugar-based exports to 
a broad based economy.  Government developed the National Adaptation Strategy in 2007 to meet the 
EC's requirement for a comprehensive strategy as a condition for support and to ensure sustainable 
viability of the sugar industry.  Through this st rategy, small-holder sugar farmers will access credit 
through a guarantee scheme that mitigates lending ri sks for banks in the 2009/10 financial year and 
subsequent years.  The country has also develope d a draft Agriculture Diversification Strategy in 
recognition of the comparative advantage Swaziland derives from the quality of the soil, climate and 
surplus labour force. Members of the Southern Afri can Customs Union WT/TPR/G/222 
 Page 41 
 
 
 23. The National Export Strategy (NES) provid es specific proposals to maximize production 
capacity and increase exports to different industries.   It offers strategies on how to maximise gains 
from preferential treatment offered by existing ma rkets and also to how enhance market access by 
branding and improved product quality.  The NES also describes measur es that have to be 
implemented in order to address the supply-side cons traints that impose restrictions to trade.  Its 
implementation is now at the core of the trade po licy agenda.  Government has collaborated with the 
private sector in pursuing its review and providin g the necessary institutional arrangement that will 
facilitate implementation of the outstanding recommendations.   
III. IMPLEMENTATION OF MULTILATERAL AND REGIONAL AGREEMENTS 
24. Swaziland is committed to improving implemen tation of the Uruguay Round and regional 
trade agreements in order to reap their full benef its.  The country's implementation requirements are in 
the areas of trade related intellectual property righ ts (TRIPS), sanitary and phytosanitary measures 
(SPS), rules of origin and procedures, standards a nd technical regulations, saf eguards and contingency 
trade remedies and trade facilitation.   
25. Technical assistance extended to Swaziland by the WTO will help to improve the 
implementation of the country's notification obligatio ns and increase transparen cy in the trade policy 
environment.  It is also expected to strengthen th e capacity of enquiry points so that they become 
active and disseminate information to all stakeholders in a timely manner.   
26. Domestication of the WTO agreements is in  progressing albeit slowly.  Government and 
non-state actors are involved in the review of the quality and regulatory framework with an aim to 
develop a National Quality Policy.  A draft inception report is currently the basis of discussions.  The 
report will inform the development of the policy.  Other legislation that is at initial drafting stage includes the Copyrights and Neighbouring Rights Bill, Patent Utility Models and Industrial Designs Bill, Trade Marks Amendment Bill and Geographical  Indications Bill.  Another process involves 
drafting of a regulation to govern the operation of the National Tariff Body provided for in the SACU 
agreement.  The National Body will be in charge of tariff investigations and changes and also the 
implementation of contingency trade remedies.     
27. Implementation of the Trade Facilitation Need s Assessment Report is coordinated by the 
National Working Group.  The Working Group will de velop a work-plan and ascertain the costs of the 
proposed programmes in order to facilitate requests fo r technical assistance.  Currently, the priority is 
to publish all trade related policies and legi slation through a Government website.   
IV. CONCLUSION 
28. The Third Trade Policy Review describes Swazi land's challenges in implementing her WTO 
commitments and other regional commitments.  It also  reveals the country's inability to maximise the 
benefits of existing market access.  This report therefore, demonstrates the commitment of Government to address the challe nges and enhance trade competitiveness.  However, Swaziland's 
limited human, financial and institu tional resources as well as the high degree of trade openness pose 
limitations to the success of planned economic refo rms.  Therefore, Swaziland's success in dealing 
with trade constraints and socio-economic challe nges depends on continued technical assistance from 
the WTO and the rest of the international commun ity.  The country also embraces the Aid for Trade 
Initiative and seeks to introduce it at national level in a formal manner.  This will be done in order to 
ensure a systematic approach to dealing with  trade constraints and enable monitoring and 
comprehensive evaluation of economic reforms. 
__________