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  ANNEX 3 : LESOTHO  
  WT/TPR/S/ 447 • Lesotho  
 
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  1  ECONOMIC ENVIRONMENT  ................................ ................................ .......................  162  
1.1  Main features of the economy  ................................ ................................ .....................  162 
1.2  Recent economic developments  ................................ ................................ ...................  165 
1.3  Trade performance and foreign direct investment  ................................ ..........................  166 
1.3.1   Trends and patterns in merchandise and services trade  ................................ ...............  166 
1.3.2   Trends and patterns in FDI  ................................ ................................ ......................  169 
2  TRADE AND INVESTMENT REGIM ES ................................ ................................ .........  170  
2.1  General framework  ................................ ................................ ................................ .... 170 
2.2  Trade policy formulation and framework  ................................ ................................ ....... 170 
2.3  Trade agreements and arrangements  ................................ ................................ ...........  171 
2.3.1   WTO ................................ ................................ ................................ .....................  171 
2.3.2   Regional and preferential agreements  ................................ ................................ ....... 173 
2.3.3   Other agreements and arrangements  ................................ ................................ ........  173 
2.4  Investment regime  ................................ ................................ ................................ .... 173 
3  TRADE POLICIES AND PRACTICES BY MEASURE  ................................ .......................  176  
3.1  Measures directly affecting imports  ................................ ................................ ..............  176 
3.1.1   Customs procedures and requirements  ................................ ................................ ...... 176 
3.1.2   Tariffs and other charges  ................................ ................................ .........................  177 
3.1.2.1   Applied MFN tariffs  ................................ ................................ ...............................  177 
3.1.2.2   Bindings  ................................ ................................ ................................ .............  177 
3.1.2.3   Tariff preferences  ................................ ................................ ................................ . 177 
3.1.2.4   Other duties and charges  ................................ ................................ ......................  177 
3.1.2.4.1   Value added tax (VAT)  ................................ ................................ .......................  177 
3.1.2.4.2   Excise duties and other levies  ................................ ................................ .............  178 
3.1.3   Rules of origin  ................................ ................................ ................................ ........  178 
3.1.4   Import prohibitions, restrictions, and licensing  ................................ ...........................  178 
3.2  Measures directly affecting exports  ................................ ................................ ..............  180 
3.2.1   Export procedures and requirements  ................................ ................................ .........  180 
3.2.2   Export prohibitions, restrictions, and licensing  ................................ ............................  180 
3.2.3   Export taxes, charges, and levies ................................ ................................ ..............  181 
3.2.4   Export promoti on and support  ................................ ................................ ..................  181 
3.2.5   Export finance, insurance, and guarantees  ................................ ................................ . 182 
3.3  Measures affecting production and trade  ................................ ................................ ...... 182 
3.3.1   Incentives  ................................ ................................ ................................ ..............  182 
3.3.2   Standards and other technical requirements  ................................ ..............................  182 
3.3.3   Sanitary and phytosanitary requirements  ................................ ................................ ... 183 
3.3.4   Competition policy and price controls  ................................ ................................ ........  185 
3.3.5   State trading, state -owned enterprises, and privatization  ................................ ............  185 
3.3.6   Government procurement  ................................ ................................ ........................  185 
3.3.7   Intellectual property rights  ................................ ................................ .......................  187 WT/TPR/S/ 447 • Lesotho  
 
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  4  TRADE POLICIES BY SECTOR  ................................ ................................ ....................  190  
4.1  Agriculture  ................................ ................................ ................................ ................  190 
4.1.1   Overview  ................................ ................................ ................................ ...............  190 
4.1.2   Agricultural policy  ................................ ................................ ................................ ... 191 
4.2  Mining and energy  ................................ ................................ ................................ ..... 194 
4.2.1   Mining  ................................ ................................ ................................ ...................  194 
4.2.2   Energy  ................................ ................................ ................................ ..................  196 
4.2.2.1   Water and electricity  ................................ ................................ ............................  196 
4.2.2.2   Hydrocarbons  ................................ ................................ ................................ ...... 198 
4.3  Manufacturing  ................................ ................................ ................................ ...........  199 
4.4  Services  ................................ ................................ ................................ ...................  200 
4.4.1   Financial services  ................................ ................................ ................................ .... 200 
4.4.1.1   Overview  ................................ ................................ ................................ ............  200 
4.4.1.2   Banking and non -banking services (ex cluding insurance)  ................................ ..........  201 
4.4.1.3   Insurance services  ................................ ................................ ...............................  203 
4.4.2   Telecommunications and postal services  ................................ ................................ .... 203 
4.4.3   Transport  ................................ ................................ ................................ ...............  205 
4.4.3.1   Overview  ................................ ................................ ................................ ............  205 
4.4.3.2   Air transport  ................................ ................................ ................................ ........  205 
4.4.3.3   Road transport  ................................ ................................ ................................ .... 206 
4.4.3.4   Railways and water transport  ................................ ................................ ................  206 
4.4.4   Tourism  ................................ ................................ ................................ .................  207 
5  APPENDIX TABLES  ................................ ................................ ................................ ... 209  
 
CHARTS  
 
Chart  1.1 Product composition of merchandise trade by main HS section, 2014 and 2021  .........  167 
Chart  1.2 Direction of merchandise trade, 2014 and 2021  ................................ .....................  168 
Chart  3.1 Procurement thresholds, 2023  ................................ ................................ .............  187 
 
TABLES  
 
Table 1.1 Selected economic indicators, 2014 -22 ................................ ................................ . 162 
Table 1.2 Balance of payments, 2014 -22 ................................ ................................ ............  166 
Table 1.3 Trade in services, 2015 -22 ................................ ................................ ..................  169 
Table 2.1 Notifications to the WTO, 2016 to 31  May 2023 ................................ .....................  172 
Table 3.1 Goods requiring an import permit/licence, 2023  ................................ .....................  179 
Table 3.2 Goods requiring an export perm it, 2023 ................................ ................................  181 
Table 3.3 Main procurement methods  ................................ ................................ .................  186 
Table 3.4 Trademark and patent applications and registration, 2016 -23................................ .. 188 WT/TPR/S/ 447 • Lesotho  
 
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  Table 3.5 Terms of protection, 2023  ................................ ................................ ...................  188 
Table 4.1 Selected indicators for main crops, 2017 -22 ................................ ..........................  190 
Table 4.2 Strategic objectives in agriculture  ................................ ................................ ........  191 
Table 4.3 Mining indicators, 2016 -22 ................................ ................................ ..................  194 
Table 4.4 Installed capacity of electricity power stations  ................................ .......................  196 
Table 4.5 Electricity purchases by the Lesotho Electricity Company  (LEC) from Muela, Eskom, 
and EDM, FY2015 -20 ................................ ................................ ................................ ........  197 
Table 4.6 Total electricity imports and exports,2015 -19 ................................ ........................  197 
Table 4.7 Electricity generation and sales by LHDA to LEC, 2015 -19 ................................ ....... 198 
Table 4.8 Lesotho's imports of petroleum products, 2015 -22 ................................ .................  199 
Table 4.9 Financial instit utions classification (excluding insurance companies), 2021  ................  201 
Table 4.10 Financial soundness indicators, 2017 -22 ................................ .............................  202 
Table 4.11 Main ICT indicators, 2015 -21 ................................ ................................ .............  203 
Table 4.12 Tourist arrivals by country of origin, 2016 -22 ................................ ......................  207 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise imports by HS section/chapter/subheading, 2014 -21 .........................  209 
Table A1.2 Merchandise exports by HS section/chapter/subh eading, 2014 -21..........................  211 
Table A1.3 Merchandise imports by origin, 2014 -21 ................................ .............................  212 
Table A1.4 Merchandise exports by destination, 2014 -21 ................................ ......................  213 
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main features of the economy  
1.1.  Lesotho is a small, mountainous country, and completely landlocked by South  Africa . The 
country has important diamond mines and abundant water resources. It had a population of 
2.2 million  in 2021. The majority of the population (some 60%) is c oncentrated in rural areas.  
1.2.  Lesotho is a least developed country (LDC). Its gross national income ( GNI) per capita peaked 
at USD  1,480 in 2012, before decreasing steadily to reach USD  1,210 in 2020 due to several shocks, 
in particular an unfavourable exter nal environment, episodes of floods and droughts, and more 
recently the COVID -19 pandemic. However, the country's GNI per capita rebounded in 2021 and 
2022.1 The GDP per capita showed similar trend (Table 1.1).  
1.3.  Lesotho's economy is vulnerable  and is subject to external and environmental volatility. It 
relies on South  Africa  for key aspects of its economic activities. On average, over 75% of its 
merchandise imports are sourced from South  Africa , including most food products. In addition, most 
of its house holds depend heavily on remittances from South  Africa . Lesotho also relies heavily on 
benefits accruing from the SACU revenue pool  (Main report, Section 1.2) , which are dominated by 
South  Africa 's import demand.  
1.4.  The economy is narrow based. By main economi c sectors, services are the largest contributor 
to its GDP (Table  1.1); however, small -size textile manufacturing, agriculture, and mining are also 
important pillars of its economic activities.  
1.5.  Recurrent droughts are a serious hindrance to agricultural production and productivity growth , 
and their impact is further magnified by the fact that about three  fourths of the people living in rural 
areas are dependent on subsistence farming (Section  4.1.1).  
1.6.  Human development indicators did not recor d any firm improvement during the review period , 
and the country remains in the low human development category. Indeed, while the value of the 
United  Nations Development Programme's ( UNDP ) Human Development Index (HDI) improved 
from 0.503 in 2015 to 0.524 in 2019, due to progress in the country's health and education 
outcomes, Lesotho's HDI value for 2021 decreased to 0.514, positioning it 168th out of 191 countries 
and territories.2 
1.7.  According to the World Bank, Lesotho's poverty rate stood at 32.4% in 201 7, down from 66.3% 
in 2002. However, 2021 projections point to an increase in poverty to 35.8%. The occurrence of 
various shocks such as the COVID -19 pandemic, and recurrent extreme weather conditions, appear s 
to have reversed the  trend in poverty reducti on.3 
1.8.  Lesotho is largely exposed to international trade. The share of trade in GDP remained high 
during the review period (Table  1.1). 
Table 1.1 Selected economic indicators, 2014 -22 
 
2014  2015  2016  2017  2018  2019  2020  2021  2022  
GDP 
(current LSL  million ) 26,492.0  30,107.1  31,102.4  30,734.6  33,829.2  35,196.8  34,856.0  35,076.0  41,769.3  
GDP 
(current USD  million)  2,441.1  2,359.7  2,114.4  2,306.7  2,556.2  2,436.0  2,117.7  2,373.4  2,553.5  
Real GDP growth 
(annual %)  1.7 3.1 3.6 -3.1 -1.5 -0.8 -5.6 1.6 0.6 
GDP per capita (USD)  1,165.1  1,113.8  986.3  1,062.7  1,163.0  1,094.5  939.5  1,040.3  1,107.4  
Population  ('000)  2,095.2  2,118.5  2,143.9  2,170.6  2,198.0  2,225.7  2,254.1  2,281.5  2,305.8  
Inflation (annual % 
change, CPI)  5.4 3.2 6.6 4.4 4.8 5.2 5.0 6.0 8.3 
Unemployment, total  16.9 16.9 16.8 17.0 16.9 16.9 18.5 18.3 18.0 
 
1 World Bank, GNI per Capita (Atlas Method ). Viewed  at: 
https://data.worldbank.org/indicator/NY.GNP.PCAP.CD?locations=LS . 
2 UNDP, Human Development Report (Lesotho) . Viewed  at: https://hdr.undp.org/data -center/specific -
country -data#/countries/LSO .  
3 World Bank, The World Bank in Lesotho. Viewed  at: 
https://www.worldbank.org/en/country/lesotho/overview#:~:text=GDP%20is%20expected%20to%20expand,
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2014  2015  2016  2017  2018  2019  2020  2021  2022  
(% of total labo ur 
force) ( modelled  ILO 
estimate)  
GDP by type of expenditure (% of GDP at current prices)  
Final consumption 
expenditure, 
government  38.8 36.9 39.6 39.7 38.1 37.2 36.7 41.5 .. 
Final consumption 
expenditure, 
households  75.9 75.4 74.9 88.2 83.6 78.9 85.5 79.6 .. 
Final consumption 
expenditure, NPISH  1.2 1.2 1.5 1.4 1.7 1.8 1.8 1.8 .. 
Gross fixed capital 
formation  29.4 28.3 26.6 27.4 26.0 27.1 23.9 26.7 .. 
Changes in 
inventories  4.7 2.1 2.1 -5.2 -4.5 1.9 2.6 -0.6 .. 
Exports of goods and 
services  38.1 42.9 45.8 47.5 49.8 45.3 42.8 46.0 .. 
Less: Imports of 
goods and services  88.1 86.8 90.5 98.9 94.6 92.2 93.5 95.1 .. 
GDP by economic activity (% of GDP at basic current prices)  
Agriculture, forestry 
and fishing  4.4 4.2 5.5 5.6 4.8 5.0 5.7 4.8 4.5 
Mining and quarrying  10.4 9.4 5.2 4.3 6.7 5.9 9.6 5.8 5.0 
Manufacturing, of 
which:  13.7 17.0 18.8 17.3 18.9 19.2 17.9 18.9 19.1 
Textiles, clothing, 
footwear and 
leather  11.3 14.1 15.7 14.7 16.3 17.0 16.2 17.4 .. 
Electricity and water  5.9 5.7 5.6 6.0 5.4 5.5 5.5 5.3 5.3 
Construction  6.1 5.7 4.9 4.9 4.4 3.5 2.1 2.4 2.6 
Services  59.5 57.9 60.0 61.9 59.7 60.9 59.2 62.8 63.5 
Wholesale and 
retail trade; 
repair of motor 
vehicles  13.1 11.7 12.6 13.2 11.3 9.5 7.6 8.1 8.7 
Transportation 
and storage  2.8 2.4 2.4 2.3 2.2 2.1 1.8 1.8 2.2 
Accommodation 
and food service 
activities  1.4 1.1 1.2 1.3 1.1 0.8 0.4 0.5 0.5 
Information and 
communication  3.6 3.5 3.9 3.5 3.4 3.2 3.1 3.1 2.7 
Financial and 
insurance 
activities, of 
which:  8.5 9.7 9.5 9.6 9.0 13.2 14.3 14.0 12.6 
Financial 
service 
activities, 
except 
insurance  6.9 8.2 7.4 7.5 6.5 10.7 12.1 11.8 .. 
Real estate 
activities  5.3 4.7 4.6 4.8 4.3 4.0 3.8 3.9 3.6 
Business services  3.2 3.5 3.4 3.4 3.0 2.8 2.5 2.6 2.6 
Professional, 
scientific and 
technical 
activities  1.1 0.9 0.9 0.9 0.8 0.8 0.8 0.8 .. 
Administrativ
e and support 
service 
activities  2.1 2.5 2.5 2.5 2.2 2.0 1.7 1.8 .. 
Public 
administration 
and defence ; 
compulsory social 
security  18.5 18.5 19.5 20.7 22.2 22.2 22.5 25.4 27.7 
Education and 
health  2.1 2.0 2.1 2.2 2.1 2.1 2.2 2.4 2.0 
Other service 
activities  1.0 0.9 0.9 1.0 1.0 1.0 1.0 1.0 0.8 
Public finance (% of GDP)  
Total revenue  53.3 51.5 46.2 47.6 43.9 43.9 48.9 48.2 .. 
Tax revenue  19.2 20.7 20.8 20.7 34.8 35.7 38.3 37.9 .. 
Total expenditure  -55.3 -48.4 -54.3 -54.0 -57.8 -53.8 -47.7 -52.8 .. 
Net lending (+)/Net 
borrowing ( -) -2.1 3.2 -8.1 -6.4 -13.9 -9.9 1.2 -4.6 .. 
Total public debt stock 
(LSL billion ) 10.4 13.7 12.4 12.1 15.5 17.1 18.6 19.1 .. 
External debt  8.7 11.9 10.6 10.2 12.3 13.0 13.6 14.4 .. 
Domestic debt 
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2014  2015  2016  2017  2018  2019  2020  2021  2022  
Money and interest rates  
Broad money (M2, 
percentage change)  4.0 12.6 -4.9 25.5 10.5 -8.8 17.1 3.9 .. 
Narrow money (M1, 
percentage change)  2.7 29.3 -7.9 26.4 0.0 -13.5 30.3 2.5 .. 
Credit to private 
sector (percentage 
change)  12.4 7.4 3.0 8.5 10.7 8.2 0.7 13.1 .. 
Interest rates (percentage per annum, end of period)  
Prime lending 
rate  10.4 10.9 11.7 11.4 11.3 11.2 8.2 8.4 8.7a 
Savings deposit 
rate 0.9 0.5 0.6 0.8 0.7 1.4 0.7 0.7 0.7a 
Deposit rate  
(1 year)  3.2 3.3 3.5 3.7 4.2 4.2 3.8 3.2 2.8a 
Central bank 
policy rate  .. 6.3 7.0 6.8 6.8 6.5 3.5 3.8 4.3a 
External sector  
Exchange Rates, 
(LSL/USD, period 
average)  10.9 12.8 14.7 13.3 13.2 14.4 16.5 14.8 16.4 
Nominal effective 
exchange rate 
(percentage change;  
- depreciation)  -7.9 -5.2 -9.2 6.8 0.1 -4.7 -8.7 6.3 -2.9 
Real effective 
exchange rate 
(percentage change;  
- depreciation)  -5.6 -3.9 -5.7 8.5 1.9 -2.1 -6.0 8.7 -1.9 
Current account/GDP  -5.0 -3.3 -8.1 -6.2 -2.2 -3.0 -0.9 -3.8 -5.9 
Trade/GDP (based on 
BoP) 125.2  128.1  139.1  144.9  143.9  136.4  136.1  139.1  129.5  
Total reserves 
(USD  million, end of 
period)  1,081.3  997.4  925.2  657.7  728.5  774.1  .. .. .. 
In months of imports 
of goods and services  5.6 5.5 5.2 3.3 3.4 3.9 .. .. .. 
Remittances – net 
(USD  million)  .. .. .. .. .. .. .. .. .. 
Inflow  393.0  370.8  453.5  549.8  581.8  543.7  468.0  499.2  575.5  
(% of GDP)  16.1 15.7 21.4 23.8 22.8 22.3 22.1 21.0 22.5 
Outflow  .. .. .. .. .. .. .. .. .. 
FDI (USD  million)           
FDI flow in 
Lesotho  94.5 206.5  159.2  123.1  128.7  35.7 29.6 26.6 .. 
FDI flow abroad  .. .. .. .. .. .. .. .. .. 
FDI stock in 
Lesotho  615.3  571.9  590.6  574.8  703.5  1,155.6  1,138.2  1,114.2  .. 
FDI stock abroad  .. .. .. .. .. .. .. .. .. 
.. Not available.  
a Data refer only to March  2022. 
Source:  Central Bank of Lesotho  (CBL) , Macroeconomic Statistics . Viewed  at: 
https://www.centralbank.o rg.ls/index.php/statistics/macroeconomic -statistics ; Bureau of Statistics. 
Viewed  at: https://www.bos.gov.ls ; World Bank, Databank. Viewed  at: 
https://databank.worldbank.org/home ; UNCTAD Stat. Viewed  at: 
https://unctadstat.unctad.org/EN/ ; and IMF data. Viewed  at: https://data.imf.org/ . 
1.9.  Lesotho is a member of the Common Monetary Area  (CMA)  (Main report, Section 1.2) . The IMF 
classifies Lesotho's de facto and de jure exchange rate arrangement as a conventional peg at par to 
the South  Africa n rand, which is also legal tender in the country.  
1.10.   The country has accepted the obligations of Article  VIII, Sections  2, 3, and 4, of the Articles 
of Agreement  of IMF . It maintains one exchange restriction arising from single discretionary 
allowances of LSL  1 million  per individual per calendar year, for residents over 18, and of 
LSL 200,000 on the same basis for residents under 18. The availability of foreign exchange beyond 
these limits is subject to a discretionary approval on a case -by-case basis.4 
 
4 IMF (2022) , Kingdom of Lesotho: Staff Report for the 2022 Article  IV Consultation , IMF Country Report 
No. 22/161.  Viewed  at: https://www.imf.org/en/Publications/CR/Issues/2022/06/08/Kingdom -of-Lesotho -
2022-Article -IV-Consultation -Press -Release -Staff-Report -and-Statement -by-519018 . WT/TPR/S/ 447 • Lesotho  
 
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  1.2  Recent economic developments  
1.11.   Lesotho's economy has continued to face structural imp ediment s in the last decade. Real GDP 
has grown only slightly since 2014 and has shrunk  from 2017 to 2020  (Table  1.1). The decreasing 
GDP per capita, combined with lower remittances at the back of sluggish economic activities in 
South  Africa , led to a sign ificant fall in the country's GNI in 2020 (Section  1.1). 
1.12.   Factors behind Lesotho's economic setback are multifaceted. The country's exports, which are 
largely dominated by textiles and diamonds, have been losing competitiveness. Lesotho's exposure 
to climat e shocks has also continued to undermine economic activities in the agricultural sector, as 
droughts and floods episodes have become more frequent over the past decade.  
1.13.   Weaknesses in Lesotho's macroeconomic management have also weighed on its economic 
growth. The economy relies heavily on SACU's  transfers, and revenues are subject to considerable 
external volatility. In such a context, the country's pro -cyclical fiscal management, with high public 
expenditures that increase when transfers are buoyant but no t scaled back when transfers fall, 
creates an uncertain macroeconomic environment to the detriment of business activities.  
1.14.   The COVID -19 pandemic further depressed Lesotho's economy in 2020, and GDP contracted 
by 5.6%  (Table 1.1) . Weak external demand ,  supply chain disruptions,  and notably closure of 
domestic textile industries, also weighed on GDP growth. In this context, the authorities resorted to 
both fiscal and monetary instruments to support the economy. On budget, resources were 
reallocated from  some components of non -financial assets towards pandemic -related social 
assistance spending. Consequently, this affected implementation of infrastructure development 
projects. Regarding monetary policy, the C entral Bank of Lesotho (CBL)  rate was cut five times in 
2020 by a total of 300  basis points from 6.50% in 2019 to 3.50%. Accordingly, the prime lending 
rate dropped to an average of 8.2%  in 2020  from 11.3% in 2019.  
1.15.   In 2021 and 2022, GDP growth rates were slightly back in the positive territory. However , the 
current geopolitical tensions and the related hike in fuel prices, as well as an unfavourable business 
sentiment , continue to pose a serious risk to Lesotho's medium -term economic prospects. Though, 
in an optimistic scenario, the IMF considers that L esotho's medium -term growth is expected to be 
supported by the construction sector, in particular the second phase of the Lesotho Highlands Water 
Project  (LHWP  II).5 
1.16.   In recent years, the authorities have undertaken strategic measures aiming to overcome th e 
numerous challenges facing the economy. The National Strategic Development Plan  II (NSDP  II) for 
2018/19 -2022/23 aims to enhance inclusive and sustainable economic growth and private sector -led 
job creation, by strengthening human capital, building infra structure, and promoting national 
governance and accountability systems.  
1.17.   Macroeconomic policies were also used to respond to short -term and structural challenges. 
Lesotho is in the process of reforming its public financial management, with a view to, inter alia, 
strengthening expenditure controls, promoting a transparent and well -coordinated budget process, 
and strengthening the monitoring of public enterprises. According to the IMF, the country has also 
developed a draft Public Financial Management and Acc ountability Bill, with a view to improving 
budget processes and limit the accumulation of domestic arrears.6 
1.18.   Monetary and exchange rate arrangements continue to focus on ensuring price stability and 
maintaining adequate reserves to safeguard the peg. Annu al inflation rates, proxied by CPI, were 
around 5%  before 2020 , except for 2016 when  inflationary pressures from the food and non -
alcoholic beverages sectors were worsened by the 2015 drought -reduced harvests and higher 
importing costs from South  Africa . Also, in 2021 and 2022, there were pronounced inflationary 
pressures from price increases in food and fuel in the context of geopolitical tensions, together with 
pandemic -induced supply chain disruptions and higher freight costs.  
1.19.   Lesotho has recorded a fiscal deficit during most years since 2014, due to high public 
expenditures, poor revenue collection , and the decline in transfers from the SACU revenue pool. The 
 
5 IMF Country Report No.  22/161 . 
6 IMF Country Report No.  22/161 . WT/TPR/S/ 447 • Lesotho  
 
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  deficit was particularly high in 2016 -19, with a peak of 13.9% in 2018  (Table 1.1) , mainly driven by 
an increase in compensation of employees. Fiscal balance posted  a surplus in  2020, driven by 
sizeable receipts of SACU revenue  and royalties on naturally occurring assets, including water 
royalties from LHWP project.  
1.20.   Lesotho's current accoun t is traditionally in deficit. The deficit was particularly high in 2016  
(8.1% of GDP ), largely driven by the widening of the trade deficit (Table  1.2). This reflected high 
imports and  weak growth in exports of goods and services . The deficit was also det ermined by a 
decline in net current transfers as a result of a fall in SACU receipts. Current account deficit eased 
steadily to its lowest level in 2020. The sharp contraction in 2020 reflected a surge in the secondary 
income account surplus buoyed exclusi vely by increases in SACU receipts. However, Lesotho's 
current account balance worsened in 2021  and 2022, mainly due to an expansion on the services 
account deficit, coupled with a declining surplus on the income balance.  
Table 1.2 Balance of payments, 2014 -22 
(USD million)   
2014  2015  2016  2017  2018  2019  2020  2021  2022  
Current account  -122.5  -77.6 -170.9  -143.2  -55.6 -72.3 -18.2 -90.9 -149.9  
Goods  -946.9  -801.7  -731.1  -799.0  -710.4  -719.1  -713.5  -753.2  -746.9  
Credit  875.7  928.6  881.3  1,028.3  1,221.1  1,063.5  888.8  1,060.9  1,052.3  
Debit  1,822.6  1,730.3  1,612.4  1,827.3  1,931.5  1,782.6  1,602.3  1,814.0  1,799.2  
Services  -299.2  -272.9  -329.0  -420.2  -460.7  -417.8  -364.5  -387.4  -428.3  
Credit  29.9 45.7 59.2 33.4 32.4 29.2 13.3 19.3 13.7 
Debit  329.1  318.5  388.2  453.6  493.1  447.0  377.8  406.6  442.1  
Primary income  317.5  315.8  409.6  477.7  505.0  476.0  418.5  431.5  513.9  
Credit  472.6  454.8  532.7  613.7  643.8  603.6  526.6  553.9  629.9  
Debit  155.1  139.0  123.1  136.1  138.8  127.6  108.1  122.4  116.0  
Secondary income  806.2  681.1  479.6  598.3  610.5  588.6  641.3  618.1  511.5  
Credit  828.2  702.9  501.7  624.0  637.3  609.5  674.4  641.4  533.3  
Debit  22.1 21.8 22.0 25.7 26.8 20.9 33.1 23.3 21.8 
Capital account  32.6 37.4 48.8 39.4 36.6 86.0 93.4 130.0  113.0  
Financial account  -133.8  -217.4  -280.8  -75.3 139.1  -38.5 208.5  67.6 -131.4  
Direct investment  -94.5 -206.5  -79.2 -42.2 -40.9 -35.7 -28.0 12.4 7.8 
Portfolio investment  0.0 -0.3 -0.2 -0.2 -0.3 97.7 38.6 13.5 -11.8 
Other investment  -162.3  -122.9  -38.1 169.4  113.3  -158.1  84.3 -28.5 -24.1 
Reserve assets  122.9  112.2  -163.2  -202.2  66.9 57.7 113.5  70.3 -103.3  
Net errors and omissions  -43.9 -177.2  -158.7  28.5 158.1  -52.2 133.3  27.2 -94.5 
Source:  IMF, IMF Data, Balance of Payments. Viewed  at: https://data.imf.org/ . 
1.21.   According to the authorities, the international reserves to import coverage has been declining 
from its 5.6 -month peak in 2014 to just above 4  months in 2020  and 2021. This , however , improved 
following receipts of the I MF's SDR allocation, which was meant to mitigate the effects of the 
COVID -19 pandemic . The SDR allocation restored the level of reserves to the pre -COVID -19 level , 
closing the year 2022 to around 4.5 months of prospective imports.  
1.3  Trade performance and foreign direct investment  
1.3.1   Trends and patterns in merchandise and services trade  
1.22.   Lesotho's economy is largely exposed to international trade in goods and services, which 
remains an important driver of its economic performance. The share of imports and exports in GDP 
has been consistently high since 2014, with values above 140% in 2017 and 2018 (Table  1.1). 
1.23.   Based on UN Comtrade data (Table A1.1), t he merchandise trade deficit widened steadily in 
2014-17, driven by several factors, in particular higher imports of  equipment for extension work 
within the mining industry and, to a certain extent, an increased demand for food products at the 
back of the poor harvest s in 2015 and 2016. Diamond exports also fell dramatically due to a decline 
in diamond production , coupl ed with lower prices in the international diamond market  then. 
Improvement resumed in 2018, as the merchandise trade deficit faded steadily, with a remarkable 
reduction in 2020 in the wake of the COVID -19 crisis. The steady reduction during this period was , 
partly, driven by buoyant diamond exports in the context of favourable international market 
conditions coupled with the discovery of rare and high -valued diamonds.  
1.24.   During the review period, Lesotho's exports performance was generally stable, with minor 
fluctuations due to diamond market conditions and the competitiveness of its textiles sector. The WT/TPR/S/ 447 • Lesotho  
 
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  composition of its merchandise exports has remained broadly unchanged. Textiles and textile 
products, and precious stones remain the main exported products. The prepared food, beverages , 
and tobacco category is also important , although  its performance is highly affected by the recurrence 
of poor harvests  (Chart  1.1 and Table  A1.1).  
Chart  1.1 Product composition of merchandise trade by main HS section, 2014 and 2021  
 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
1.25.   The geographical distribution of exports also remained broadly unchanged . South  Africa , the 
United  States , and the European  Union  remain, by far, Lesotho's main export destination s (Chart  1.2 
and Table  A1.2). While the United  States  is the main market for textile products, the European  Union  
appears to attract Lesotho's exports of diamonds. South  Africa is a destination for textiles and food 
products, and its market share expanded further during the review period.  
Chart 1.[LSO]  Product composition of merchandise trade by main HS section, 2014 and 2021
2014 2021
Textiles and 
textile articles 
59.1% 
(apparel =
47.3%)Prepared food, 
beverages and 
tobacco 
9.3% 
Precious 
stones & 
metals
18.5%Machinery, 
electrical equipment 
7.3%
Total:   USD 818.1 million Total:  USD 948.5 million  
Base metals 
& articles 
thereof
4.8%Live animals 
and products
5.2% Vegetable 
products
6.8%Live animals 
and products
3.8% Vegetable 
products
6.7%
Base metals &
articles thereof
5.4% 
Total:   USD 1,423.7 million Total:   USD 1,667.9 million Other
5.8%
Source:  WTO Secretariat calculations, based on UN Comtrade database.Other 
11.1%Other
11.3%
Transport 
equipment
5.4%Prepared food, 
beverages and 
tobacco 
8.4% Other 
3.8%
Chemicals 
7.5%Transport 
equipment
10.3%Textiles and 
textile articles 
38.4% 
(apparel = 
33.2%)
Prepared food, 
beverages & 
tobacco  
9.4%
Machinery;
electrical 
equipment
10.6% Machinery; 
electrical 
equipment
11.5% 
Plastics & 
rubber
3.0% Plastics & 
rubber 5.8% Mineral products
15.7%Mineral products
14.5% 
Textiles & 
textile
articles 
15.1%Prepared food, 
beverages & 
tobacco  
7.4%Exports (f.o.b.)
Imports (c.i.f.)
Textiles & 
textile articles 
21.6%Chemicals 
7.2%Machinery, electrical 
equipment
3.3%
Precious 
stones & 
metals 
46.1%WT/TPR/S/ 447 • Lesotho  
 
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  Chart  1.2 Direction of merchandise trade, 2014 and 2021  
 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
1.26.   The composition of imports is more diversified than that of exports. The leading import 
categories are textiles, machinery, electrical equ ipment, transport equipment, food , and petroleum 
products (Chart  1.1 and Table  A1.3). A large share of Lesotho's import s continues to be sourced 
from South  Africa . Other important import  sources  include Chinese  Taipei , China, the United  States , 
the Europea n Union , and India. (Chart  1.2 and Table  A1.4). 
1.27.   Lesotho's trade in services balance has been in deficit since 2014. Its main services import 
categories are travel, transport , and business services (Table  1.3). Exports are rather marginal and 
concentrated i n travel services.  
United States
30.3%
EU-2746.1%South Africa 23.0%Other 0.6%Chart 1.[LSO]  Direction of merchandise trade, 2014 and 2021
2014 2021
Exports (f.o.b.)
United States
30.2%
EU-27
19.4%South Africa
44.9%Other 5.5%
Total:  USD 818.1 million Total:  USD 948.5 million
South Africa
80.8%China 2.9%Chinese 
Taipei 7.1%Other 9.2%Imports (c.i.f.)
South Africa
74.9%China
8.6%Chinese 
Taipei
5.7%Other
10.8%
Total:  USD 1,426.7 million Total:  USD 1,667.9 million
Source :  WTO Secretariat calculations, based on UN Comtrade database.WT/TPR/S/ 447 • Lesotho  
 
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  Table 1.3 Trade in services, 201 5-22 
(USD million)  
 2015  2016  2017  2018  2019  2020  2021  2022  
Trade balance  -272.9  -329.0  -420.2  -460.7  -417.8  -364.5  -387.4  -428.3  
Services exports  45.7 59.2 33.4 32.4 29.2 13.3 19.3 13.7 
Transport  1.1 0.8 0.6 0.6 0.6 0.5 0.6 0.5 
Travel  34.4 48.1 22.8 23.6 20.8 6.3 7.9 6.6 
Other services  10.2 10.2 9.9 8.2 7.8 6.6 10.9 6.6 
Insurance and pension 
services  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Financial services  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Charges for the use of 
intellectual property 
n.i.e. 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 
Telecommunication, 
computer, and 
information services  1.7 2.9 1.8 0.1 0.4 0.0 3.6 0.0 
Other business services  5.3 4.6 5.1 5.1 4.7 4.1 4.6 4.1 
Government goods and 
services n.i.e.  2.9 2.5 2.7 2.8 2.5 2.2 2.5 2.2 
Services imports  318.5  388.2  453.6  493.1  447.0  377.8  406.6  442.1  
Transport  56.7 51.2 57.9 61.5 55.5 47.5 52.7 52.4 
Travel  174.0  257.9  303.0  341.8  319.4  270.0  289.4  329.3  
Other services  87.9 79.1 92.6 89.8 72.1 60.3 64.6 60.4 
Insurance and pension 
services  10.6 9.8 11.1 11.8 10.8 9.7 11.0 10.9 
Financial services  0.8 0.7 0.8 0.8 0.7 0.6 0.7 0.6 
Charges for the use of 
intellectual property 
n.i.e. 3.4 2.9 3.2 3.3 3.0 2.6 2.9 2.6 
Telecommunication, 
computer, and 
information services  7.9 7.2 13.1 8.9 10.8 7.1 5.6 6.0 
Other business services  43.5 37.6 41.4 41.9 38.2 33.7 37.4 33.9 
Government goods and 
services n.i.e.  21.7 20.9 23.0 23.2 8.6 6.6 7.1 6.4 
Source:  IMF, IMF Data, Balance of Payments. Viewed  at: https://data.imf.org/ . 
1.3.2   Trends and patterns in FDI  
1.28.   Lesotho is traditionally a net recipient of foreign investments. FDI inflows have been on a 
declining trend since 2015 (Table  1.1). Mining and the textile industry traditionally attract a 
subst antial share of investments. However, energy facilities, in particular renewable power plants , 
have benefited from foreign investments in recent years. South  Africa;  Türkiye ; Mauritius ; 
Chinese  Taipei ; Hong  Kong,  China;  and Singapore are the main sources o f investment.   WT/TPR/S/ 447 • Lesotho  
 
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  2  TRADE AND INVESTMENT REGIMES  
2.1   General framework  
2.1.  The Constitution of Lesotho has been amended nine times since its adoption in 1993. The latest 
amendment was assented into law in May  2020. The amendment requires the Prime Minister to 
obtain majority support of the members of the National Assembly before advising the King to dissolve 
Parliament. The amendment has also changed the maximum duration of Parliament's prorogation 
from 12 months  to 2 months. In addition, it reformed other subjects such as filling the position of 
Prime  Minister when vacant and clarified the role of a caretaker government.  
2.2.  The substance of the general legal and institutional framework remained broadly unchanged 
during the review period. Lesotho is a constitutional monarchy. The political system was extensively 
described in the previous Review .7 
2.3.  Legislative power in Lesotho is vested in the Parliament. In terms of the Constitution, the 
Parliament consists of the King; a non -elected Senate; and a National Assembly, elected every 
five years. The National Assembly consists of 80  members elected in terms of a constituency system 
by the electorate; and 40  are elected in accordance with the principle of proportional repres entation. 
The Senate consists of the 22  principal chiefs and 11  other senators nominated by the King. On 
7 October  2022, Lesotho held its 11th legislative poll to elect the 120  members of its 
National  Assembly.  
2.4.  The executive power vests in the King but is exercised through the Prime Minister, who is the 
head of government and appointed for a five -year term by the King, on the advice of the Council of 
State. The Prime Minister shall be the leader of the majority party or coalition in the 
National  Assembly. T he term of the current Prime Minister began on 28  October  2022. 
2.5.  Judicial power vests in the courts of Lesotho. These are the Court of Appeal; the High Court, 
and its specialized divisions , i.e. the commercial and land divisions, subordinate courts, and cou rts 
martial , and any other tribunal established by  the Parliament.  
2.6.  The Constitution remains the highest -ranking law in the hierarchy of legal instruments. In the 
domestic hierarchy, it comes before acts, regulations, circulars, and administrative decisions. As 
indicated during the previous Review, international treaties m ust be ratified by the Parliament to 
become part of the domestic legislation.  
2.2  Trade policy formulation and framework  
2.7.  As a SACU  member, most of Lesotho's trade policies, in particular issues pertaining to market 
access, are shaped at the SACU  level. For issues not covered by the SACU  Agreement, trade and 
trade -related policies are mainly the responsibility of the Ministry of Trade,  Industry, Business 
Development and Tourism  (MTIBDT) . Its activities include coordinating the formulation and 
implementation of trade policies, including WTO -related matters and any other trade agreements. 
Other ministries and agencies are also involved in  trade policy making, including the ministries in 
charge of economy, finance, agriculture, and the Central Bank of Lesotho . 
2.8.  The 2002 SACU  Agreement also provides for a National Body to be established in each member 
country . The National Body , upon establis hment, will be in charge of SACU  issues (including tariff 
changes) at the national level and will make recommendations to the Customs  Union. In this regard, 
a Trade and Tariff Bill is undergoing a parliamentary approval process in Lesotho  in order to provide 
a legal basis for the establishment of Lesotho's National Body.  
2.9.  To facilitate regular consultations, the Lesotho Coordination Committee on Trade was 
established in 2017. It has four subcommittees (trade facilitation; market access; monitoring and 
evalua tion; and standards, product development , and market diversification). Under the 
Committee's responsibility, Lesotho adopted its trade policy framework for 2021 -25, the formulation 
 
7 WTO document WT/TPR/S/324 /Rev.1 , 5 February  2016, Annex  2, Section  2. WT/TPR/S/ 447 • Lesotho  
 
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  process  of which  was open to private sector organizations. According to the  authorities, these 
organizations are generally consulted on trade policy formulation, implementation, and follow -up. 
2.10.   The National Trade Policy Framework (NTPF) was developed in the context of Lesotho's 
2020 Vision and the NSDP  II (Section 1.1) . The NTPF  is a strategic tool to guide both public and 
private sectors regarding the promotion of domestic and external trade.8 
2.11.   The NTPF prioritizes the development of a broader based private sector, which was further 
underpinned by the ado ption of a National Industrialization Policy in 2015. As a policy document, 
the NTPF provides guidelines for implementing the Government's trade agenda and , to that end , 
identifies specific policy and regulatory goals aimed at advancing Lesotho's trade dev elopment. The 
following topics are identified under the NTPF as priority intervention areas for trade development: 
domestic market infrastructure; trade agreements; regional integration and export competitiveness; 
trade in services; trade facilitation; nat ional quality infrastructure; intellectual property; competition 
and consumer protection; and the role of trade in sustainable development. For each of these priority 
areas, the NTPF  provides policy recommendations and guidance for specific interventions t hat will 
be developed over the coming decade.  
2.12.   The Lesotho National Trade Strategy  (LNTS) 2021 -2025 is also an important strategic policy 
paper adopted in 2020, with a view to further promoting the country's trade performance, in 
particular with respect to exports. Under the Strategy, Lesotho aims to bolster the competitiveness 
of its economy to promote economic diversification, and uphold employment and income growth. 
The Strategy places a special emphasis on the country's micro, small , and medium -sized 
enterprises  (MSMEs) in strategic sectors with export potential. It considers horticulture, textiles and 
apparel, and light industries as priority economic activities with high potential for export growth. It 
has developed strategic objectives to tackle obstac les that are preventing MSMEs from realizing their 
full export potential.  
2.13.   Since 2016, a National African Growth and Opportunity Act ( AGOA ) Response Strategy has 
also been in place, with a view to improving and maximi zing the benefits of the AGOA  and access  to 
the US  market.9 The Strategy seeks to address the various competitive constraints faced by Lesotho. 
The authorities indicate that all relevant stakeholders were involved in the strategy development 
process.  
2.3  Trade agreements and arrangements  
2.3.1   WTO  
2.14.   Lesoth o is an original Member of the WTO. It grants at least most -favoured -nation (MFN) 
treatment to all of its trading partners. It is not a signatory to any plurilateral agreement negotiated 
within the WTO framework and did not take part in the WTO negotiation s on basic 
telecommunications nor in those on financial services. The concessions made by Lesotho at the 
conclusion of the Uruguay Round are contained in Schedule  CXV as regards goods and in 
WTO document GATS/SC/114 as regards services. Lesotho has not been involved in any dispute 
under the WTO dispute settlement mechanism, whether as a complainant, a respondent , or a 
third party.  
2.15.   During the review period, Lesotho notified some of its trade measures to the WTO (Table  2.1). 
Nevertheless, as of June  2023, some notifications, including those on state  trading enterprises, 
remained outstanding.  
 
8 Lesotho Gov ernment, Lesotho: National Trade Policy Framework , 2021-2025. Viewed  at: 
https://www.lesothotradeportal.org.ls/kcfinder/upload/files/Legal_1626769469.pdf . 
9 Ministry of Trade and Industry (2016) , The AGOA Response Strategy for Lesotho . Viewed  at: 
https://agoa.info/images/documents/6186/agoa -response -strategy -report -for-lesotho -2016.pdf . WT/TPR/S/ 447 • Lesotho  
 
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  Table 2.1 Notifications to the WTO, 2016 to 31  May 2023 
Agreement  Description  Periodicity  WTO document  
(latest if periodi c) 
Agreement on Agriculture  
Articles 10 and 18.2  Export subsidy (ES:1)  Annual  G/AG/N/LSO/5 -10 
(08/10/2019 ) 
G/AG/N/LSO/11 to 13  
(19/07/2022 ) 
Article  18.2 Domestic support (DS:1)  Annual  G/AG/N/LSO/14 (26 /09/2022 ) 
and Rev.1 (28 /09/2022 ) 
G/AG/N/LSO/15 (27 /09/2022 ) 
G/AG/N/LSO/16/Corr.1  
(28/09/2022 ) 
Regional trade agreement s 
Enabling clause , 
para. 4(a) Notifications of regional trade 
agreements  Ad hoc  WT/COMTD/N/55 (01 /11/2019 ) 
WT/COMTD/RTA11/N1  
(20/07/2017 ) 
GATT  1994, 
Article  XXIV:7(a)  Free trade areas  Ad hoc  WT/REG381/N/1 (04 /04/2017 ) 
WT/REG381/N/1/Add.1 
(12/02/2018 ) 
WT/REG443/N/1 (21 /01/2021 ) 
General Agreement on Trade in Services  
Article  III:3 Laws/regulations  Ad hoc  S/C/N/962 -968 (16 /10/2019 ) 
S/C/N/1065 -1071 
(04/01/2021) 
Article  III:4 Contacts and enquiry points  Ad hoc  S/ENQ/78/Rev.16  
(22/04/2016 ) 
Article  IV:2 Contacts and enquiry points  Ad hoc  S/ENQ/78/Rev.16  
(22/04/2016 ) 
Article  18:5 Laws/regulations  Ad hoc  G/ADP/N/1/LSO/1  
(03/10/2019) 
Agreement on Subsidies and Countervailing Measures  
Article  25.11  Countervailing duty actions 
(taken within the preceding 
six months)  Semi-annual  G/SCM/N/298/Add.1  
(22/04/2016 ) 
G/SCM/N/305/Add.1  
(21/10/2016 ) 
G/SCM/N/313/Add.1  
(21/04/2017 ) 
G/SCM/N/321Add.1  
(23/10/2017 ) 
G/SCM/N/328/Add.1  
(20/04/2018 ) 
G/SCM/N/334/Add.1  
(19/10/2018 ) 
G/SCM/N/342/Add.1  
(24/04/2019 ) 
G/SCM/N/349/Add.1  
(15/11/2019 ) 
Agreement on Trade Facilitation  (TFA)  
TFA, Articles  15 
and 16 (WT/L/931)  Category commitments  Ad hoc  G/TFA /N/LSO/1 (04 /06/2018 ) 
G/TFA/N/LSO/1/Add.1  
(28/02/2020 ) 
G/TFA/N/LSO/1/Add.2  
(18/02/2021 ) 
G/TFA/N/LSO/2 (12 /04/2021 ) 
G/TFA/N/LSO/3 (21 /06/2021 ) 
G/TFA/N/LSO/4 (14 /07/2021 ) 
G/TFA/N/LSO/1/Add.3  
(21/10/2021 ) 
G/TFA/N/LSO/1/Add.4  
(28/02/2020 ) (09/08/2022 ) 
Agreement on Rules of Origin  
Annex  II, para. 4 Preferential rules of origin  Ad hoc  G/RO/N/158 (21 /07/2017 ) 
Agreement on Anti-Dumping  
Article  18.5 Laws/regulations  Ad hoc  G/ADP/N/1/LSO/1  
(03/10/2019 ) 
Source:  WTO Secretariat.  WT/TPR/S/ 447 • Lesotho  
 
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  2.16.   Lesotho continues to actively participate in various negotiating groups, including the 
ACP group, the African group, the Group of 90 (G -90), and the group of least developed 
countries  (LDCs). It is also a co -sponsor of the proposal on intellectual property ("W52" sponsors).  
2.3.2   Regional and preferential agreements  
2.17.   Lesotho's membership in regional trade agreements is largely determined through SACU, and 
the Southern  Africa Development Community  (SADC ) to a certain extent (Main  Report, Section  2.4). 
In 2017, the country ratified the SADC Protocol on Trade in Services.  
2.18.   Lesotho ratified the African Continental Free Trade Area  (AfCFTA) in November  2020. 
According to the authorities, Lesotho is involved in Phase  I (trade in goods and services) and Phase  II 
(competition, inves tment, IPR s) of the AfCFTA negotiations.  
2.3.3   Other agreements and arrangements  
2.19.   Lesotho is eligible for unilateral preferences under the A GOA, whereby the United  States  
provide s eligible sub -Saharan  African countries with duty -free access to the US market for a  list of 
products. The textiles and clothing industries have been the major beneficiary of the AGOA.  
2.20.   Products originating from Lesotho are also eligible to preferential access in Armenia, Australia, 
Belarus, Canada, the European  Union , Iceland, Japan, Kaza khstan, New  Zealand , Norway, the 
Russian  Federation , Türkiye , the United  Kingdom , and the United  States  under their respective 
GSPs, as well as to India, Morocco, Chile, China, Chinese  Taipei , Kyrgyz  Republic , Thailand, the 
Republic of Korea , and Montenegro under their LDC -specific preferential schemes.10 
2.4  Investment regime  
2.21.   Several laws and regulation s, such as the Companies Act, the Business Licensing and 
Registration Act,  have provisions pertaining to the administration of business activities , in particular 
governance of investment.  
2.22.   Companies are incorporated under the Companies Act , 2011 and its Regulations , 2012. The 
Act provides for electronic company registration, as well as electronic regulatory filing. Registration 
is done at the One -Stop Business Facilitation Centre  (OBFC), which was established under 
the MTIBDT . Under the Act, foreign companies are allowed to register as an external company within 
10 days of opening a business in Lesotho.  
2.23.   During the review period, Lesotho adopted the Bu siness Licensing and Registration Act , 2019 
and its Regulations , 2020.11 The new legislation aims to streamline business licensing procedures, 
whereby applications are processed by a licensing officer. It also seeks to promote the inclusion of 
small busine sses into the formal sector. Under the Act, the licensing and registration application can 
be done electronically.  
2.24.   By this law, in order to operate in Lesotho, all businesses (citizens and foreigners) must obtain 
a Business Identification Card. In addition , foreign businesses are required to hold a business permit 
to be authori zed to engage in a business in Lesotho. To obtain  a business permit, a foreign business 
must submit a business plan which ascertains, inter alia, its minimum capital resource of no le ss 
than LSL  2 million  its prospective employment generation (not less than six Lesotho citizens), the 
strategic nature of the business to the Lesotho economy , and a statement of technology transfer 
and the company's business expertise.  
2.25.   The new legislation also introduces a risk -based system, whereby a licence is required for 
business activities whose operations are deemed to pose public health, environment , or national 
security risks. These are listed in Schedule  1 of the Business Licensing and Registration Act , 2019 
and consist of : supply of liquefied petroleum gas and petroleum products, waste collection and 
treatment, sewerage, remediation  and other waste management services, wholesale and retail sale 
 
10 WTO, Preferential Trade  Arrangements Database : Lesotho . Viewed  at: 
http://ptadb.wto.org/Country.aspx?code=426 . 
11 eRegulations Lesotho. Viewed  at: https://lesotho.eregulations.org . WT/TPR/S/ 447 • Lesotho  
 
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  of health -related articles or products, food and beverage services, personal service activities, metal 
waste or scraps, repairs and maintenance, animal production, fishing and aquaculture, medical 
goods , and chemicals for animals and crops. Businesses that do not pose any risk are only required 
to be registered and can start operations before registration.  
2.26.   Under the new legislation, a Trading Enterprise Appeal Tribunal will hear appeals from 
decisions made pursuant to exercise of power under the Act.  
2.27.   As was the case during the previous Review, Le sotho has no stand -alone foreign investment 
law. A National Investment Policy was adopted in 2015 to pave the way for the drafting of a 
consolidated Investment Bill. In addition, the policy paper outlines the G overnment's initiatives to 
support domestic an d foreign investment, including support programmes for investments. The policy 
further highlights investment facilitation activities that are available in Lesotho . According to the 
authorities, the drafting process of the Investment Bill is at an early sta ge. 
2.28.   Restrictions on foreign ownership are maintained in the case of land acquisition and of 
businesses operating in certain sectors. Foreigners can lease land directly from the Government and 
hold land titles as long as they have a local partner that owns at least 20% of the company. The 
title is valid for 60  years.  
2.29.   Furthermore, Lesotho applies some restrictions to foreign investors at the sectoral level, in 
particular in the case of small -scale activities. The Business Licensing and Registration 
Regulation s, 2020, in its Schedule  16, lists 47  types of services and activities reserved for Lesotho 
nationals. However, a partnership with foreign enterprises is possible. There are also restrictions on 
foreign investment in the areas of mining (artisanal activiti es) and banking ( restrictions on the 
members of the board of directors)  (Sections  4.2.1 and 4.4.1.2).  
2.30.   For businesses involved in industrial activities, issuance of a manufacturing licence is governed 
by the Industrial Licensing Act , 2014. It is valid for o ne year (renewable) and subject to the 
submission by investors of an impact report on public health, occupational safety , and environmental 
issues , where necessary.  
2.31.   New businesses also require an Environment Impact Assessment (EIA) issued by the 
Department  of Environment. This requirement applies to projects and activities in industries, 
including construction, transportation,  mining, forestry -related activities, agriculture, the processing 
and manufacturing industries, energy and electric infrastructure, w aste 
handling /storage /transport /treatment and disposal, and communications. It was indicated during 
the previous Review that MSME s may be exempted from this requirement.  
2.32.   Regarding the institutional framework for Lesotho's investment regime, the Lesotho National 
Development Corporation  (LNDC), the Lesotho Tourism Development Corporation  (LTDC) , and the 
Basotho Enterprise Development Corporation  (BEDCO) are the main government agencies involved 
in investment promotion, business registration and the  administration of Lesotho's incentive 
schemes for investors. The LNDC is responsible for, inter alia, the promotion of both local and foreign 
investment. It encourages investment in the manufacturing and processing industries, mining, 
commerce, chemicals,  petrochemicals, plastics, technology, and tourism. The LNDC provides 
assistance to foreign investors with company registration, licences , and work permits; publishes 
information on investment opportunities; and administers a number of incentives (Section  3.3.1). 
Most of BEDCO's activities concern small investors, in particular the promotion of indigenous Basotho 
businesses, while the LTDC is in charge of promoting tourism projects.  
2.33.   Lesotho is a signatory to several bilateral agreements for the promotion an d reciprocal 
protection of investments (APRPIs). As of June  2023, Lesotho had three APRPIs: with Switzerland, 
Germany , and the United  Kingdom . In addition, Lesotho has double taxation agreements with 
South  Africa , the United  Kingdom , Mauritius, Botswana , and Eswatini.  
2.34.   Lesotho is party to the Convention on the Settlement of Investment Disputes between States 
and Nationals of Other States  (ICSID  Convention ) and to the New York Convention of 1958 on the 
Recognition and Enforcement of Foreign Arbitral Award. It  is also a member of the Multilateral 
Investment Guarantee Agency  (MIGA) and a partner of the Overseas Private Investment WT/TPR/S/ 447 • Lesotho  
 
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  Corporation  (OPIC).  Lesotho has a Commercial Court Division, which was officially inaugurated in 
February  2013. 
2.35.   The incentive schemes available to investors remained broadly unchanged during the review 
period. Lesotho grants mainly tax incentives to national and foreign investors for manufacturing 
activities, including a lower income tax rate and no withholding tax on dividends.  WT/TPR/S/ 447 • Lesotho  
 
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  3  TRADE POLICIES AND PRACTICES BY MEASURE   
3.1  Measures directly affecting imports  
3.1.1   Customs procedures and requirements  
3.1.  Any Lesotho or foreign business (incorporated in Lesotho) can engage in merchandise import 
for commercial purposes. Importers of controlled goods are required to apply for an import permit 
with the relevant Ministry  (Section  3.1.4).  As part of Lesotho's trade facilitation programme, 
business registration and the application an d issuance of trade permits are progressively migrating 
from a paper -based process to an online platform, through the Lesotho National Single 
Window  (LNSW). However, as of now, only the customs administration and the Ministry of Trade, 
Industry, Business D evelopment and Tourism  (MTIBDT)  (through its licensing and registration unit , 
the One -Stop Business Facilitation Centre  (OBFC )) are connected to the system. The process was 
initiated in June  2022. 
3.2.  On 4  January  2016, Lesotho deposited with the WTO its instrument of acceptance of the 
Protocol concerning the Agreement on Trade Facilitation Agreement  (TFA) . It has notified the list of 
measures for the different Categories (A, B , and C), and has indicated the implement ation dates for 
Categories  B and  C.12 On 21  October  2021, Lesotho  submitted a request for an extension of its 
definitive date (from 31  December  2021 to 31  December  2024) for the provision concerning 
freedom of transit.  
3.3.  During the review period, Lesotho con tinued to implement its  Customs Modernization 
Programme. Under the programme, the authorities established the Lesotho Trade Information Portal 
in 2020, an integrated website that provides up -to-date information on import, export , and transit.13 
3.4.  Lesotho als o participates in the SACU Customs Modernisation Programme, under which there 
is a customs information exchange framework (Main  Report, Section  3.1). The implementation of a 
Preferred Trader Programme was another achievement of Lesotho's customs modernizat ion efforts. 
The programme grants preferential treatment to traders on the basis of their level of customs 
compliance and the risk associated with their operations. Benefits include quicker processing times 
of customs procedures, prioritized clearance and release of goods, automatic qualification to VAT 
and customs deferment account, and expedited refund processing. The authorities indicate that in 
May 2023, 10  preferred traders were listed in Lesotho. They also noted that the country was in the 
process of implementing SACU's Authorized Economic Operator programme, which provides 
preferential treatment to importers and exporters throughout the region.  
3.5.  The Customs and Excise Act , 1982, its Regulations of 1984 , and their related amendments 
continue to govern c ustoms procedures. In addition, Lesotho's Customs and Excise Act provides for 
the application of Schedules  1 to 7 of SACU's Customs and Excise Act (also known as the 
Tariff Book). According to the authorities, a Customs Amendment Bill is currently undergoing 
parliamentary approval with a view to further harmonizing customs procedures within the SACU 
region. Revenue Services Lesotho (RSL)  is responsible for customs procedures and for administering 
all taxes levied on imports.  
3.6.  Customs formalities may be completed by importers or by an approved customs broker. 
However, most importers hire a clearing agent to clear goods through customs. Since March  2016, 
the RSL has migrated to t he ASYCUDA World system to process customs declarations. The authorities 
indicate that, in 2020 as part of the Customs Modernization Programme, an electronic platform, 
e-tariff, was established under ASYCUDA World to allow importers to browse for commoditi es to 
determine their classification codes and calculate related import duties. According to t he authorities , 
the 2022  Time Release Study  estimated that  the average time required for customs clearance was 
approximately five hours.  
3.7.  Generally, the following documents are required for the customs declaration from extra -SACU 
countries: customs declaration form, known as the Single Administrative Document (SAD); 
 
12 WTO, Lesotho's status of TFA implementation. Viewed  at: 
https://tfadatabase.org/en/members/lesotho .  
13 Government of Lesotho, Lesotho Trade Information Portal. Viewed  at: 
https://www.lesothotradeportal.org.ls/ . WT/TPR/S/ 447 • Lesotho  
 
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  commercial invoice; transport bill; packing list; import permit (if applicable ); certificate of origi n (if 
applicable ); and rebate certificate (if applicable ). For imports from SACU countries, traders must 
present the SAD form, commercial invoice, and import permit (if applicable ). For imports originating 
from South  Africa , the SAD form and other listed d ocuments must be submitted for commercial 
consignments.  
3.8.  In addition to the documents listed above, all imports arriving in Lesotho from South  Africa  
should be accompanied by a customs notification issued by the South  Africa n Revenue Services 
(SARS) . As ind icated during the previous Review, all imports coming from outside SACU are moved 
in bond from the South  Africa n customs office to the one in Lesotho where clearance takes place, 
i.e. importers pay a guarantee to the South  Africa n customs authorities, whic h is released once 
the RSL acknowledges that it has received the shipment. Goods imported into Lesotho from other 
SACU  members  are cleared at the borders for VAT collection purposes.  
3.9.  In principle, customs declarations are processed using a risk management method that 
provides for three channels: a red channel (high risk), requiring a physical inspection of both 
documents and goods before customs clearance; a yellow channel (medium risk ), requiring a 
documentary check; and a green channel (low risk) for immediate release.  
3.10.   The provisions of the Customs and Excise Act , 1982 on customs valuation are aligned with 
those in the WTO  Agreement  on Customs Valuation. They remain ed broadly unchange d during the 
review period. The authorities indicate that almost all imports were valued according to the 
transaction value  during the review period . Lesotho continues to maintain a valuation database  for 
imported used vehicles, to address undervaluation.  
3.1.2   Tariffs and other charges  
3.1.2.1   Applied MFN tariffs  
3.11.   As a SACU  member, Lesotho applies its common external tariff (Main  Report, Section  3.3.1). 
Lesotho does not apply any tariff   quotas  (TQs) on an MFN  basis.  
3.1.2.2   Bindings  
3.12.   In the Uruguay  Round, Lesotho bound 100% of i ts tariff lines at 60% and 200%. On two  lines, 
applied tariff rates are higher than their bound levels (60%) ( Main Report, Table  3.4). These lines 
are subject to a mixed tariff, where the highest rate between the specific and the ad valorem  applies. 
The two  lines refer to worn clothes . 
3.1.2.3   Tariff preferences  
3.13.   Lesotho continues to grant preferential treatment in the context of the SACU and 
Southern  Africa Development Community  (SADC ) agreements  (Main  Report, Sections  2.4 
and 3.3.3). 
3.1.2.4   Other duties and charges  
3.14.   In addition to customs duties, imports are subject to VAT, excise duties , and other levies.  
3.1.2.4.1   Value added tax (VAT)  
3.15.   In accordance with the Value Added Tax Act No . 9 of 2001 (as amended) and complemented 
by various regulations, Lesotho collects VAT on goods and services, whether locally produced or 
imported. There are three rates of VAT: 15% (the standard rate) on most goods and services, whic h 
was increased from 14% in 2018; 10% on electricity; and zero on basic commodities as well as 
exports of goods and services. The Telecommunications VAT rate was increased from 12% to the 
standard rate of 15% in March  2020 and the Electricity VAT rate from 9% to 10% in March  2021. 
3.16.   VAT is levied on all imports based on the c.i.f. price. The VAT  Act provides a list of items that 
are exempted from VAT.  WT/TPR/S/ 447 • Lesotho  
 
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  3.17.   As indicated during the previous Review, VAT on imports is due at the Lesotho border, unless 
the importer  has paid the VAT in South  Africa  and presents the invoice to prove it. In these cases, 
Lesotho can claim the VAT amount from SARS in accordance with the agreement between SARS and 
the RSL. 
3.1.2.4.2   Excise duties and other levies  
3.18.   Lesotho charges excise duties on a number of goods, both locally produced or imported, in 
the context of the harmonized regime (Main  Report, Section  3.3.4). 
3.19.   Although the SACU  Agreement (Schedule  1) allows for the application of certain levies such 
as environmental levies, the authorities in dicate that Lesotho does not yet collect them.  
3.20.   In accordance with the Agricultural Marketing (Distribution of Dairy Products) 
Regulations , 1992, Lesotho continues to collect a  2.5% levy on imported dairy products  (Section 
4.1.2) . 
3.1.3   Rules of origin  
3.21.   Lesotho ap plies preferential rules of origin for all its RTAs; and non -preferential rules of origin, 
as described  in the Customs and Excise Act of 1982 and its regulations (Main Report, Section  3.2). 
3.22.   During the review period, there were no amendment s to the rules of origin provisions of the 
Customs and Excise Act , 1982 ( Section  47) and its Regulations (Section  41). 
3.1.4   Import prohibitions, restrictions, and licensing  
3.23.   Lesotho's import control regime has not undergo ne any significant change since the previo us 
Review. Lesotho prohibits import s of a number of products based on security, health, moral, or 
economic considerations. It also prohibits imports of certain chemicals, through the Environmental 
Act, 2008, to comply with the international environmental c onventions to which it is a signatory.  
3.24.   Prohibited products are drugs and narcotics, counterfeit goods and money, carbide of calcium, 
cigarettes with a mass of more than 2  kg per thousand cigarettes, hazardous waste, chemicals and 
substances, weapons, milit ary clothing for sale, indecent or obscene material, and prison -made and 
penitentiary -made goods.  
3.25.   Import restrictions are mainly governed by the Customs and Excise Act , 198214; Import and 
Export Control Act , 1984 (as amended) ; Import Restrictions Regulatio ns, 1988 (as amended) ; and 
the Agricultural Marketing Act , 196715 and its regulations.  
3.26.   Lesotho's last notification of its import restriction regime was submitted to the WTO in 2010. 
It consisted of a list of goods subject to a non-automatic import permit.16 Lesotho requires an import 
permit for a selected number of agricultural and manufactured goods regardless of their origin, and 
in certain case s only when they originate from outside the SACU area (Table  3.1). The list of goods 
subject to an impor t permit has remained largely unchanged since the previous Review. The 
consolidated list of controlled goods was first published in 2009 through the Import Restrictions 
Regulations.  
3.27.   The permits are not automatic, and their requirements and duration vary de pending on the 
product. Import permits for bread, dairy , and eggs are granted depending on the supply of locally 
produced goods. Permits can be valid for one  shipment (e .g. clothing, milk, dairy products , and 
livestock), one  year (e.g.  petroleum fuel, prec ious stones , and alcoholic beverages), one  month 
(e.g. sugar, bread, fresh fruits and vegetables) , or three  months (i.e.  bank notes, gold securities , or 
foreign currency).17 In most cases a trading licence is required for importers before applying for 
 
14 Customs and Excise Act , 1982 (Act No.  10 of 1982) and its amendments.  
15 Act No.  26, 1967.  
16 WTO documents G/LIC/N/3/LSO/1, 6  June 2008; G/LIC/N/3/LSO/2, 23  November  2010; and 
G/LIC/N/1/LSO/1, 23  November  2010. 
17 WTO document G/LIC/N/3/LSO/2, 23  November  2010; and information provided by the a uthorities.  WT/TPR/S/ 447 • Lesotho  
 
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  one of these import permits , with exceptions including clothing ; tyres; vehicles ; milk; dairy 
products ; and bank notes, gold securities , or foreign currency.18 
Table 3.1 Goods requiring an import permit/licen ce, 2023  
Goods subject to 
licensing  Legislation  Administrator  Scope of 
application  
1. Milk and other dairy 
products  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Agricultural Marketing Regulations – Distribution 
of Dairy Products (Legal Notice No.  241 of 1992)  
▪ Agricultural Marketing Regulations – Distribution 
of Dairy Products 1993  Lesotho National 
Dairy Board  All trading 
partners  
2. Sugar  ▪ Import restrictions Regulation – Amendment  2009 
(Legal Notice No.  175 of 2009)  
▪ Agricultural Marketing Regulations – Import of 
Sugar, 1989 (Legal Notice No.  176 of 1989)  Ministry of 
Agriculture, Food 
Security and 
Nutrition  (MAFSN)  All trading 
partners  
3. Bread  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Agricultural Marketing Regulations – Bread, 2005 
(Legal Notice No.  5 of 2005)  MAFSN  All trading 
partners  
4. Fresh fruits and fresh 
vegetables  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Agricultural Marketing Regulations 1992  
(Legal Notice No.  28 of 1992)  MAFSN  All trading 
partners  
5. Pulses, beans and 
peas ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Agricultural Marketing Regulations – Beans, Peas, 
Maize and Sorghum 1986 (Legal Notice No.  178 of 
1986)  MAFSN  All trading 
partners  
6. Red meat  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Agricultural Marketing Regulations, 1992  
(Legal Notice No.  141 of 1992)  MAFSN  All trading 
partners  
7. Poultry and eggs  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Agricultural Marketing Regulations – Egg control 
1969 
(Legal Notice No.  35 of 1969)  MAFSN  All trading 
partners  
8. Wool and Mohair  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Agricultural Marketing Act No.  26 of 1967  MAFSN  All trading 
partners  
9. Livestock and 
livestock products  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Proclamation No.  57 of 1985 – Importation and 
exportation of Livestock and  livestock products  MAFSN  All trading 
partners  
10. Pullets and one day 
old chickens  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Livestock Disease Proclamation No.  10 of 1896 
and its amendments of 1984  MAFSN  All trading 
partners  
11. Bees ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Livestock Disease Act  MAFSN  All trading 
partners  
12. Diamonds and other 
precious stones, 
cores and samples of 
precious stones  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Precious Stones Order 1970  
▪ Precious Stones (Kimberley Process) Regulations 
2003 
(Legal Notice No.  66 of 2003)  
▪ Precious Stone (Prescription of Forms and Licence 
Fees) Regulations 2004 (Legal Notice 64 of 2004)  
▪ Precious Stones (Diamond Dealer's Licence Grant 
and Renewals) Regulations 2004 (Legal Notice 
No. 160 of 2004)  Ministry of Natural 
Resources  All trading 
partners  
13. Used clot hing  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Export and Import Control Act, 1984  
(Amended in 1996)  Ministry of Trade 
Industry, Business 
Development and 
Tourism ( MTIBDT ) Extra-SACU 
trading 
partners  only 
 
18 WTO document G/LIC/N/3/LSO/2, 23  November  2010.  WT/TPR/S/ 447 • Lesotho  
 
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  Goods subject to 
licensing  Legislation  Administrator  Scope of 
application  
14. Tyres (new and 
used)  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Export and Import Control Act – Amendment 
1996 
(Legal Notice No.  5 of 1996)  MTIBDT  Extra-SACU 
trading 
partners  only 
15. Vehicles (new and 
used)  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Export and Import Control Act – Amendment 
1996 
(Legal Notice No.  5 of 1996)  MTIBDT  Extra-SACU 
trading 
partners  only 
16. Alcoholic beverages 
(i.e. wines, spirits 
and beer)  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Liquor licensing Act 1998  
(Act No.  8 of 1998)  MTIBDT  All trading 
partners  
17. Petroleum fuel  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Fuel and Services Control Regulation for 
Petroleum Fuel 1999 Ministry of Natural 
Resources  Extra-SACU 
trading 
partners  only 
18. Bank notes, gold 
securities or foreign 
currency  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Exchange Control Regulations, 1989  
(Legal Notice No.  175 of 1989)  Central Bank of 
Lesotho  All trading 
partners  
19. Medicines, medical 
devices, drugs, toxic 
chemicals  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Dangerous Medicines Act 1973  Ministry of Health  All trading 
partners  
20. Explosives  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  
▪ Internal Security (Arms and Ammunition) Act 
1966  Ministry of Natural 
Resources  All trading 
partners  
21. Fire arms and 
ammunitions  ▪ Import restrictions Regulation – Amendment 2009 
(Legal Notice No.  175 of 2009)  Ministry of Local 
Government, 
Chieftainship, 
Home Affairs and 
Police  All trading 
partners  
Source:  Compiled by the WTO Secretariat based on  information provided by the authorities ; and 
WTO document G/LIC/N/3/LSO/2, 23  November  2010. 
3.2  Measures directly affecting exports  
3.2.1   Export  procedures  and requirements  
3.28.   Export requirements have largely remained the same since the previous Review. In general, 
the registration formalities required to import goods for commercial purposes are also applicable to 
exports (Section  3.1). All commercial exports must be the subject of a customs declaration.  
3.29.   As was the case during the previous Review, documents required for customs clearance for 
exports destined to extra -SACU countries consist of the SAD form, the commerci al invoice, the 
certificate of origin; the examination (inspection) certificate (if applicable ), and the foreign exchange 
control declaration endorsed by an authorized bank (Form  F178).  For exports destined to 
SACU  members , exporters must present the SAD f orm and the commercial invoice at the border.  
3.2.2   Export prohibitions, restrictions , and licensing  
3.30.   The export control framework remained largely unchanged. Lesotho prohibits the export of 
certain drugs and chemicals19, and may prohibit the exports of ammunitio n or any good that could 
be converted into or used to manufacture ammunition.20 It also applies export prohibitions on 
products pursuant to international conventions, such as the Convention on International Trade in 
Endangered Species of Wild Fauna and Flo ra (CITES).  
3.31.   Lesotho requires export permits for some agricultural products, diamonds, drugs, medicines, 
weapons, and hazardous waste and substances (Table  3.2). These restrictions are in place for 
various reasons, including safety, health, and compliance with international regulations 
 
19 Drugs of Abuse Act , 2008, Article  43. 
20 Customs and Excise Act , 1982, Section  114(5) . WT/TPR/S/ 447 • Lesotho  
 
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  (e.g. Kimberley Process for diamonds). Control of agricultural  products , including fish products , aims 
to ensure food securit y. 
Table 3.2 Goods requiring an export permit, 2023  
Goods subject to permit  Legislation  Administrator  
Cereals and legumes 
(wheat, maize, sorghum, 
barley, oats, peas , and 
beans)  Agricultural Marketing (Cereal and Legume Export) 
Regulations , 1972 (Legal Notice No.  33 of 1972)  Ministry of 
Agriculture, Food 
Security and 
Nutrition  
(MAFSN)  
Wool and mohair, hides and 
skins Importation and Exportation of Livestock Products 
Proclamation (Amendment) Act 1984; and Stock Diseases 
Amendment Act No. 18 of 1984  MAFSN  
Fish Importation and Exportation of Livestock Products 
Proclamation (Amendment) Act 1984 ; and Stock Diseases 
Amendment Act No.  18 of 1984  MAFSN  
Firearms and explosives  Internal Security (Arms and Ammunition) Act , 1966 
(Act No. 17 of 1973)  Ministry of Local 
Government, 
Chieftainship, 
Home Affairs and 
Police  
Drugs and psychotropic 
substances  Lesotho Dangerous Medicines Act , 1973 
(Act No. 21 of 1973)  Ministry of Health  
Medicines  Medical, Dental and Pharmacy Order , 1970 (Order  No. 13 of 
1970)  Ministry of Health  
Rough diamonds  Precious Stones (Kimberley Process) Regulations , 2003 
(Legal Notice No.  66 of 2003)  
 
Precious Stones (Prescription of Forms and Licence Fees) 
Regulations , 2004 (Legal Notice No.  64 of 2004)  Ministry of 
Natural Resources  
Hazardous waste or 
substances  Environment Act , 2008 (Act No.  10 of 2008)  Ministry of 
Defence, National 
Security and  
Environment  
Source:  WTO Secretariat based on Lesotho's legislation  on the Lesotho Trade Information Portal. Viewed  at: 
www.lesothotradeportal.org.ls ; and information provided by the authorities.  
3.2.3   Export taxes, charges, and lev ies 
3.32.   Diamond exports from Lesotho are subject to  a levy of 15% of their value.21 No other taxes, 
charges , or levies are collected on exports.  
3.2.4   Export promotion and support  
3.33.   Lesotho maintains an incentive framework for local manufacturers that export under the  
Rebate Item 470.03 programme  (Main report, Table 3.5) . Under the programme, raw materials 
imported into Lesotho to manufacture products for export outside the SACU area are exempted from 
paying customs duties and VAT. However, if the final good is exporte d to the SACU area, exporters 
must pay the import duties that were initially exempted. The authorities indicate that manufacturers 
under this regime are also charged company tax at the rate of 10% instead of the standard 25%.  
3.34.   In addition, exports of goods (and services) are subject to zerorate  VAT. Therefore, exporters 
may claim a refund for VAT paid on imported inputs that are incorporated into an export product.  
3.35.   Lesotho does not have export processing zones. However, efforts are ongoing to design a 
legal framework for their establishment. The authorities indicate that the draft National Special 
Economic Zones Policy is aligned to the goals of the NSDP  II, which se eks to promote employment 
and economic growth by establishing a strong industrial base in Lesotho. The Policy aims at laying 
the ground for the conception and implementation of relevant laws and institutions.  
3.36.   The Lesotho National Development Corporation  (LNDC) plays the role of the country's export 
promotion agency. It is responsible for supporting exporters to market their internationally known 
 
21 Precious Stones Order No.  24, 1970.  WT/TPR/S/ 447 • Lesotho  
 
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  products. In addition, it offers technical advice to exporters on foreign markets and specific 
exportable product s. It also facilitates participation of exporters in international trade fairs and 
exhibitions.  
3.2.5   Export finance, insurance , and guarantees  
3.37.   Lesotho's Partial Credit Guarantee Scheme, which is administered by the LNDC , continues to 
play an important role in providing support, in the form of export finance services, for the 
development of domestic businesses , especially MSME s. The Scheme aims to  support exporters' 
activities and businesses in general, and to promote their participation in global value chains. At its 
inception, the scheme provided 50% guarantee on loans worth up to LSL  5 million . It targets all 
sectors and business sizes with loca l shareholding. In April  2020, as a supportive measure in the 
context of the COVID -19 pandemic, and to improve the impact and reach of the Scheme, the 
authorities expanded guarantee cover from the previous 50% to 75% of the loan , waived all related 
fees, and increased the maximum guarantee amount from LSL  5 million  to LSL  8 million . 
3.38.   The authorities indicate that Lesotho is developing new financing instruments, notably a 
supply chain financing mechanism.  
3.3  Measures affecting production and trade  
3.3.1   Incentives  
3.39.   Lesotho continues to grant incentives and other support measures administered by the LNDC, 
which focus mainly on investment ( Section 2.4 ). It also maintains an incentive framework for local 
manufacturers that export under rebate (Section  3.2.4).  
3.3.2   Standards and other technical requirements  
3.40.   Lesotho is  a member of the SADC  Standardization, Quality Accreditation and 
Metrology  (SQAM) programme, which aims to harmonize standards and conformity assessment 
procedures across all members.  
3.41.   The Lesotho Standar ds Institution Act,  2014 came into force in 2020, and it is the main 
legislation that governs the standardization process in Lesotho. It provides for the establishment of 
a standards body in charge of developing national standards in consultation with all relevant 
stakeholders. A new institution, the Lesotho Standards Institution  (LSI), was established in 2020.  
3.42.   LSI's mandate is to develop, publish, and maintain Lesotho Standards. According to the 
authorities, as the National Standards Body of Lesotho, the L SI follows international best practices. 
Its service charter is standards development, testing, certification, and inspection. Accreditation, 
metrology, and technical regulation framework are left as functions of the newly restructured 
Department of Qualit y, Metrology and Technical Regulations  (DQMTR).  
3.43.   LSI has replaced the DQMTR as the enquiry point under the TBT  Agreement, but this 
information has yet to be notified to the WTO. LSI is a member of the International Organization for 
Standardization (ISO). Th e authorities indicate that it is also an affiliate member of the International 
Electromagnetic Commission  (IEC).  
3.44.   The authorities note that LSI runs the National Standardisation Programme whereby national 
standards are developed according to the LSI guide for development, publication, maintenance, and 
application of Lesotho standards, in accordance with ISO/IEC Directives.  
3.45.   For a standard to be developed, a proposal can come from a consumer, regulator, or the 
business community, or internally as informed by the national development agenda such as 
the NSDP  II. Upon receipt of a request for the introduction of a new standard, LSI subjects the 
proposal to economic relevance; if approved, a new project is established. LSI sends the project to 
the relevant technic al committee, or a new technical committee is inaugurated, in which experts are 
sought from, inter alia, industry associations, buyers, producers, academia, and consumer/civic 
societies.  WT/TPR/S/ 447 • Lesotho  
 
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  3.46.   When the technical committee has drafted a standard, the Standards In stitution Act, 2014 
provides for it to be subjected to a public inquiry, for a period of three months, to collect comments 
from stakeholders. After that, the Standards Management Committee that approved the project 
should also approve the draft standards f or publication. Five technical committees (Food; Energy; 
Quality Management Systems; Environmental Management; and Traffic, Transport and Transit) are 
currently in place with more than 30  draft standards awaiting publication. According to the 
authorities, while some standards can be home grown, most of the Lesotho standards are adoptions 
from ISO, the African Organisation for Standardisation  (ARSO), and the SADC Cooperation in 
Standardisation.  
3.47.   The technical regulations framework is rather unclear. Each Mini stry develops its own technical 
regulations, and there is no harmonized procedure. The number of technical regulations approved 
by each Ministry is not available.  
3.48.   The authorities indicate that a draft document on a quality policy and a technical regulation  
framework  is currently under going  review and is expected to be approved by the Cabinet by 
June 2024.  
3.49.   The DQMTR is responsible for metrology activities in Lesotho. The metrology framework is 
governed by the Weights and Measures Act, 1970. However, the Act has not been fully implemented. 
The DQMTR performs both industrial and legal metrology.  
3.50.   It also requires that markings shall be in English or Sesotho. Metrology regulations are 
formulated based on International Organization of Legal Metrology  (OIML) recomm endations and 
SADC Cooperation in Legal Metrology (SADCMEL) harmonized documents. The existing metrology 
regulations are the Weights and Measures (Metrication) (advisory board) Regulations,  2013 and 
Weights and Measures (Units of Measurement) Regulations,  2017. The following regulations are at 
the drafting stage: Weights and Measures (Labelling Requirements for Prepackages) and Weights 
and Measures (Non -automatic Weighing Instruments).  
3.51.   As of May  2023, Lesotho had not submitted any notifications regarding it s TBT  measures. 
According to the authorities, Lesotho is preparing to submit notifications under its TBT  Agreement 
obligations.  
3.52.   In principle, surveillance at the border is the responsibility of LSI. However, the authorities 
indicate that no control mechani sm is currently implemented at the border.  
3.53.   Lesotho does not have either a functional national accreditation authority or international 
accredited testing and certification bodies. It has not signed any mutual recognition agreement.  
3.3.3   Sanitary and phytosanita ry requirements  
3.54.   Lesotho has continued to make efforts to further rationalize SPS matters, including its relevant 
policy framework. According to the authorities, a Plant Protection Policy was approved by the Cabinet 
in 2021 to update the 2014 Policy. It  is now a working document that is expected to guide the 
authorities in implementing phytosanitary measures and providing reference for the formulation of 
relevant legislation.  They also note that a Food Safety Policy is in its final drafting stage and is 
expected to be completed by the end of 2023.  
3.55.   The broad regulatory framework, in practice, seems to have remained almost unchanged. 
Food safety issues continue to be regulated through Public Health Order, 1970 (Order No.  12), which 
provides rules for the storag e of foodstuffs and prohibits the sale of food or animal feed in states 
that make them unfit for human consumption. It obliges food and animal feed traders to take 
adequate measures to prevent any infection or contamination thereof. The Ministry in charge of 
health is in charge of implementing the Order. According to the authorities, officers from the Ministry 
implement food inspection at borders.  
3.56.   The regulatory framework for plant protection also continues to be governed by the 
Agricultural Marketing Act, 1967. In principle, the Department of Agricultural Research of the 
Ministry of Agriculture, Food Security and Nutrition  (MAFSN) undertakes measures to safeguard the 
country against the risks associated with the entry, establishment, or sprea d of exotic plant pests WT/TPR/S/ 447 • Lesotho  
 
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  and diseases. However, it appears that Lesotho was lacking relevant border inspection services 
until 2019. Lesotho's phytosanitary border inspection services were launched in January  2019, to 
allow for an effective inspection of pla nts and plant products before being imported or exported.22 
3.57.   Imports of agricultural products require the issuance of import permits by the Department of 
Agricultural Research. Importers can get information regarding relevant imports requirements 
through a dedicated electronic platform.23 The issuance of import permits depends on the risk 
associated with the products. In general, an import permit contains a statement of conditions to be 
fulfilled before an importation is allowed. As pa rt of SPS requirements for imports (as reported by 
the International Plant Protection Convention (IPPC)), the consignment must be accompanied by a n 
authenticated phytosanitary certificate issued by the national plant protection organization of the 
country of origin.24 
3.58.   Lesotho's 2014 Plant Protection Policy document indicates that the country's phytosanitary 
framework is weak due to understaffed agencies and limited financial resources to prevent the 
introduction of unwanted pests. This situation, according to the policy document, has contributed 
significantly to the decline in agricultural production.  
3.59.   The Department of Livestock Services is in charge of administering SPS requirements that 
pertain to livestock and related products, including meat products. Th e Animal Disease Act 
(Act No. 1984) and the Importation and Exportation of Livestock and Livestock Products 
Proclamation No.  57 of 1952 remain the main legal instruments for the regulation of trade in 
livestock. The Act allows Lesotho citizens and non -citizens living in Lesotho to import animals and 
animal -derived products, which are considered to be safe. The Proclamation prohibits importation of 
undesirable livestock (defined as livestock of inferior quality) and provides for importation of 
livestock only  if permitted by the Department of Livestock Services. Requirements attached to the 
issuance of the import permit for livestock, including related fees and required documentation, are 
published on  the eRegulation website . In 2023, the permit fee is LSL  100 for meat and meat 
products, as well as milk and milk products; LSL  50 per animal for large animals; and LSL  30 per 
animal for stock and pets.25 The permit fee for live chickens is LSL  200. In order to obtain a n import  
permit, a transport permit, issued b y the MAFSN, is required. A health attestation is also required 
for import of live animals, o ffal, and poultry.  
3.60.   Lesotho has no policy document on genetically modified organisms  (GMOs). Based on 
information provided to the FAO on its GMO information platfor m, Lesotho is currently working on 
its Biosafety Bill to govern the use and trade of GMOs. For the time being, while it does not produce 
GMO products, import of genetically modified food or feed is allowed and there is no authorization 
process.26 The autho rities indicate that the Department of Agricultural Research in collaboration with 
the Department of Environment has recently undertaken a project to enable the testing of GMOs.  
3.61.   In 2008, an SPS National Committee was created to, inter alia, advise the Gove rnment on 
SPS issues and coordinate the implementation of policies. The Committee is a multi -institutional 
entity chaired by the MAFSN. Representatives of private sector are also part of the Committee.  
3.62.   The Department of Agricultural Research  of the MAFSN i s Lesotho's national enquiry point for 
SPS measures.27 Lesotho has not submitted any notifications on SPS measures to the WTO.  
 
22 Department of Agricultural Research, Agriculture Launched Phytos anitary Border Inspection: 
Compliance with Sanitary and Phytosanitary (SPS) Measures . Viewed  at: 
https://lesothotradeportal.org.ls/kcfinder/upload/files/Article%20Inspection%2004.01.2018%20.pdf . 
23 eRegulation s Lesotho. Viewed  at: https://lesotho.eregulations.org/objective/118?l=en . 
24 IPPC, Phytosanitary Import Requirements . Viewed  at: 
https://www.ippc.int/en/countries/lesotho/reportingobligation/2012/12/phytosanitary -import -requirements -1/. 
25 eRegulations Le sotho. Viewed  at: 
https://lesotho.eregulations.org/procedure/160?l=en&embed=true&includeSearch=true . 
26 FAO, FAO GMO Foods Pl atform . Viewed  at: https://www.fao.org/food/food -safety -quality/gm -foods -
platform/browse -information -by/country/country -page/en/?cty=LSO . 
27 WTO document G/SPS/ENQ/26, 11  March  2011.  WT/TPR/S/ 447 • Lesotho  
 
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  3.63.   Lesotho is a member of the Codex Alimentarius28, the World Organi sation for Animal 
Health  (WOAH, originally OIE), and the IPPC.  
3.3.4   Competition policy and price controls  
3.64.   Lesotho has not yet enacted a competition law , and there is currently no competition 
regulatory authority. The authorities indicate that, in some instances, the MTIBDT  may play the role 
of a competition authority. The Ministry can act as the competition authority in cases of predatory 
pricing , or thos e involving restrictive agreements and mergers or acquisitions. Lesotho approved a 
Competition Policy in 2013, alongside a Consumer Protection Policy. The Competition Policy provides 
guidelines for the establishment of competition legislation. According to  the authorities, the 
Competition Bill has been approved by Parliament and is undergoing last enactment stages ; the Act 
is expected to be published in the G overnment Gazette by end -2023.  
3.65.   The authorities also indicate that the policy document serves as basi s for promoting 
competition in the national economy.  
3.66.   In practice, regulators for certain sectors (finance, telecommunications, and energy) are in 
charge of regulating the bulk of competition issues (Sections  4.3.1, 4.5.1 , and 4.5.2).  
3.67.   Price controls are in place, on a permanent basis, for oil products, electricity , and water supply 
(Section  4.2.2 ).29 Pursuant to the  Price Control Act , 1979 (No.  4 of 1983), bread, beans, peas, raw 
milk, maize , and sorghum can be subject to temporary price controls depending on the market 
conditions  (Section 4.1.2) . 
3.3.5   State  trading, state -owned enterprises, and privatization  
3.68.   Lesotho has not made any notification s to the WTO regarding state  trading enterprises. The 
authorities indicate that Lesotho maintains no state  trading enterprise within the meaning of the 
working definition in Article  XVII:4(a) of the GATT  1994 and paragraph  1 of the Understanding on 
the Interpretation of Article  XVII. 
3.69.   While information was not av ailable on state -owned enterprises, the State continues to hold 
shares in companies across almost all economic sectors. These include Lesotho Electricity 
Company  (LEC), the Lesotho Highlands Development Authority  (LHDA), the Water and Sewerage 
Company  (WAS CO), and the Lesotho Post Bank.  
3.3.6   Government procurement  
3.70.   Lesotho is neither a signatory nor an observer to the WTO  Agreement  on Government 
Procurement. None of its trade agreements contain substantial government procurement provisions. 
The provisions on public procurement that are contained in the EPA with the European  Union  focus 
mainly on transparency and cooperation.  
3.71.   In 2018, Lesotho enacted an amendment to its Public Procurement Regulations, mainly 
clarifying procurement methods and modifying procurement thresholds.30 Therefore, the Public 
Procurement Regulations , 200731 and Public Procurement Amended Regulation, 2018 govern the 
public procurement system . During the review period, the Procurement Pol icy and Advisory 
Division  (PPAD), under the Ministry of Finance, continued to ensure its implementation, with overall 
responsibility for the public procurement regime.  
3.72.   The Public Procurement Regulations , 2007 (as amended) apply to procurement of works, 
goods, and services by public institutions.  The legislation provides for a decentralized public 
procurement regime whereby ministries,  districts councils, state -owned legal entities, any other 
bodies covere d by public law, or any project -implementing authority authorized to carry out public 
procurement and funded by foreign loans, grants , and assistance, as contracting authorities, operate 
 
28 Since Lesotho does not have its own food standards, Codex Standards are used as equivalent to 
national standards.  
29 Fuel and Services Control Act , 1983 (No.  23 of 1983).  
30 Public Procurement (Amendment) Regulations, 2018.  
31 Public Procurement Regulations , 2007, as promulgated by Legal Notice No.  1 of 2007.  WT/TPR/S/ 447 • Lesotho  
 
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  their own tender panels that are responsible for the decision on the award of contract.  As was the 
case during the previous Review, a Government Procurement Manual and a Government Code of 
Good Practice for Procurement are in place to guide contracting authorities in the implementation of 
the legislation.  
3.73.   In general, public  procurement in Lesotho involves one of three methods: direct purchase , 
competitive quotations , and open tender (Table  3.3). The appropriate procurement method depends 
on predefined thresholds for the contract's estimated value (Chart  3.1). However, exceptional 
procurement procedures, i.e.  limited tendering, the comparison method, or non -competitive 
procurement , may be used in certain circumstances, subject to an authorization from the PPAD, and 
based on a reasonable justification from the pr ocuring entity. A confirmation from the supervising 
Minister that such procurement is in the public interest is also required. Open competitive tendering 
is not explicitly defined as the default method.32 
3.74.   The invitation to tender must be made available pub licly, through the mass media and on the 
procurement unit's website in either of the official languages  (Sesotho and English) . 
Table 3.3 Main procurement methods  
Procurement method  Characteristics  
Open tende ring The procurement process is open to all suppliers that wish to participate, 
regardless of their geographical origin. The tender must include at least 
three  participants.  
Competitive quotation 
(or price comparison)  Under this method, the  Procurement  Unit will select at least three  businesses that 
meet the conditions for the tender and requests for quotations. The selected 
contractor will be the one offering the lowest prices by comparing prices.  
Direct contracting  The contract is grante d to one  supplier without any competitive process. This 
method is applied when only one  supplier is capable of meeting the requirement.  
Source:  Public Procurement Regulations (as amended) 2007.  
3.75.   Foreigners can participate in a tender process without any re striction. However, they have to 
first register as legal entities, apply for trading licen ces, and register with the Lesotho Revenue 
Authority for tax purposes. In evaluating proposals, the procurement unit grants a margin of 
preference of 15%, 10% , or 5% to domestic bidders. A margin of 15% is granted to a local business 
with a majority shareholding of at least 51%. A 10% margin is granted to ( i) a business owned 
between 30% and 50% by Lesotho nationals ; (ii) a tenderer bidding to supply goods of Lesotho 
origin; (iii) a tenderer performing at least 50% of the contract in Lesotho and using and developing 
the capacity of Basotho staff ; (iv) a tenderer subcontracting at least 50% of the contract to one or 
more Basotho businesses ; (v) a tenderer that has the largest use of locally  produced goods, 
materials, and services ; or (vi) a tenderer employing the largest share of local labo ur; and 5% to a 
business  owned between 10% and 30% by Lesotho nationals. The margins of preferences are 
non-cumulative.  
 
32 Government of the Kingdom of Lesotho  (2018) , Public Procurement Policy . Viewed  at: 
http://www.finance.gov.ls/documents/laws%20and%20regulations/FINAL%20PROCUREMENT%20POLICY%20
%2019%20APRIL%202018.pdf . WT/TPR/S/ 447 • Lesotho  
 
- 187 - 
 
  Chart  3.1 Procurement thresholds, 2023  
 
Source:  Public Procurement Act.  
3.76.   Regarding the dispute resolution mechanism, aggrieved bidders may appeal to PPAD , which 
will seek the opinion of an independent Appeal Panel. The c omplainant may proceed before courts if 
still not satisfied.  
3.77.   In 2018, the Government adopted a Public Procurement Policy with a view to, inter alia, 
developing transparent public procurement policies, legislation, guidelines and processes; and 
establishing an oversight body to carry out compliance monitoring and take enforcement measures. 
The Policy also seek s to promote environmental protection through public procurement methods, 
and facilitate the participation of youth, women, people with physical disabil ities, and SMEs . 
3.78.   A new Public Procurement Act was passed in March  2023. It is yet to enter into force. The Act 
is meant to establish a public procurement authority  and regulate the public procurement system in 
order to optimi ze efficiency in public procure ment. Among the reforms brought about under the Act, 
it encourages environmentally responsible procurement and introduces e -procurement to enable 
procurement entities to disseminate tender documents and receipts electronically . 
3.3.7   Intellectual property rights  
3.79.   Lesotho is a member of the World Intellectual Property Organization (WIPO) and is signatory 
to the following WIPO -administered agreements: the Berne Convention; the Paris Convention; the 
Rome Convention; the Patent Cooperation Treaty; the Madrid Agreement  (Marks); the Madrid 
Protocol; the WIPO Convention; and the Marrakesh VIP Treaty, which was signed by Lesotho on 23 
July 2018. In addition, Lesotho is a member of the African Intellectual Property Organization. On 
4 January  2016, Lesotho ratified the Proto col amending the TRIPS  Agreement.33 
3.80.   Lesotho's regulatory framework for IPRs remained broadly unchanged during the review 
period. The  Industrial Property Order , 1989 (as amended)  (IPO 1989)34 and its regulations35 
continue to provide for the protection of patents, utility models, industrial designs, and marks 
(collective marks and trade names including well -known marks) under terms that have remained 
 
33 WTO, Amendment of the TRIPS  Agreement . Viewed  at: 
https://www.wto.org/english/tratop_e/trips_e/amendment_e.htm . 
34 IPO 1989 was published in the Gover nment Gazette on 14  April 1989. It  was amended for the last 
time in 1997 by Act No.  4 of 1997.  
35 Industrial Property Regulations , 1989 (Legal Notice No.  85), published in the Government Gazette  on 
5 June 1989.  
020406080100120Chart 3.[LSO ] Procurement thresholds, 2023
Direct 
contractingGoods, services, and works
LSL 50,000Competitive 
quotationOpen
tender
LSL 100,000
Source:   [should be provided by MK]WT/TPR/S/ 447 • Lesotho  
 
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  unchanged throughout the review period (Table  3.4). The Order provides for compulsory licen ces. 
Parallel imports are not covered under the law.  
3.81.   Under the Ministry of Justice, Law and Parliamentary Affairs, the Office of the Registrar 
General is responsible for reviewing and approving applications to register patents, utility models, 
industrial designs, and marks , and it serves as the  contact point for all industrial property matters. 
Applications for industrial property rights remained marginal in Lesotho. Trademark registration was 
the most claimed right during  the review period (Table  3.4). 
Table 3.4 Trademark and patent applications and registration, 2016 -23 
Year Trademark 
applications  Trademark 
registrations  Patent 
applications  Patent 
registrations  
2016 580 349 2 2 
2017 492 162 2 0 
2018 469 109 4 14 
2019 371 117 1 4 
2020 380 47 0 0 
2021 380 38 1 1 
2022 263 74 0 0 
June 2023 161 40 2 0 
Source:   Information provided by the authorities.  
3.82.   As was the case during the previous Review, the Copyright Order ,1989 (CO 1989)  continues 
to provide protection for copyrights and related rights. Pursuant to the Order, any original work in 
the following categories qualifies for protection: literary, artistic, and scientific works and their 
transformations (including e xpressions of folklore) ; performers ; producers of phonograms ; and 
broadcasting organizations (Table  3.5). By law, copyright protection covers works of Lesotho -based 
resident authors, and works first published in Lesotho regardless of the nationality or res idence of 
their authors; performers who are nationals of Lesotho ; and performances taking place, fixed in a 
phonogram or broadcast in Lesotho; performers, phonograms, and broadcasts originating in foreign 
countries prescribed by the Minister of Justice, La w and Parliamentary Affairs ; unpublished works 
and works first published by foreign authors or in foreign countries if the country in question grants 
similar protection to Lesotho; and  expressions of foreign folklore, foreign authors, performers, 
phonogram s, and broadcasts.  
3.83.   The Lesotho Copyright Society of Authors and Artists (LESCOSAA) was created pursuant to 
the Copyright Order , 1989. It is a collective management organization with the purpose of promoting 
and protecting the interests of author s, artists , and performers who registered as members. 
LESCOSAA is also responsible for the collection and distribution of royalties and other remuneration 
accruing and due to its members in respect of their rights.  
Table 3.5 Terms of protection, 2023  
 Duration of the protection under Lesotho's 
legislation  Duration of protection under 
TRIPS  Agreement  
Patents  15 years extendable by 5 years (Article  14 of the 
IPO 1989).  20 years (Article  33). 
Industrial designs  
 Five years, extendable for two successive periods 
of five years  (Article  24 of the IPO  1989).  At least 10  years (Article  26). 
Trade marks  
(marks, collective 
marks and trade 
names)  10 years, extendable for consecutive periods of 
10 years (Article  29 of the IPO  1989). The 
authorities indicate that the period of protection 
can be extended only once.  Seven years, renewable indefinitely 
(Article  18). 
Utility models  Seven years , not renewable (Article  18 of the 
IPO 1989).  Utility models are not mentioned 
explicitly in the TRIPS  Agreement.  WT/TPR/S/ 447 • Lesotho  
 
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   Duration of the protection under Lesotho's 
legislation  Duration of protection under 
TRIPS  Agreement  
Copyrights and 
related rights  In general, works are protected for the life of the 
authors plus 50  years after their death (Article  13 
of the CO  1989) . 
Cinematography or audiovisual  works are 
protected for 50  years from the making of the 
work or 50  years from the date it is made 
available to the public (Article  13 of the 
CO 1989). 
Photographic works or works of applied art are 
protected for 25  years from the making of the 
work (Artic le 13 of the CO 1989 ). 
Performers and broadcasting organizations rights 
are protected for 20  years from the end of the 
year in which the performance/broadcast took 
place (Articles  24 and 29 of the CO  1989). 
Producers of phonograms are protected for 
20 years computed from the end of year in which 
the phonogram was published for the first time 
(Article  26 of the CO  1989).  The Berne Convention (Article  7) as 
incorporated into the 
TRIPS  Agreement  provides that the 
term of protection shall be the life of 
the au thor and 50  years after his  or 
her death (Articles  2 and 9).  
 
When the term of protection is 
calculated on a basis other than the 
life of a person, the duration of 
protection would be of at least 
50 years from the end of the 
calendar year of authorized 
publication, or from the making of 
the work, or from the end of the 
calendar year of making it. This 
applies for works other than 
photographic works or works of 
applied art (Article  12). 
 
Performers and producers of 
phonograms are protected for 
50 years; and broadcasting 
organizations for 20  years 
(Article  14.5).  
Source:  Compiled by the WTO Secretariat based on Lesotho's legislation.  
3.84.   The IPO 1989 and the CO 1989 provide for civil and criminal sanctions. Civil remedies may 
consist of, inter alia, confiscation of offending goods and payment of damages to the right holder s 
for any economic damage endured because of an infringement of their rights. Under the IPO 1989, 
any person who infringes the law is subject to  a fine of LSL  10,000 , imprisonment fo r a period of 
10 years , or both.  
3.85.   The CO 1989 provides that people who are guilty of infringement may be fined for up to 
LSL 12,000 or be imprisoned for a term not exceeding five years or both. Any person whose rights 
are in danger of being infringed or hav e been infringed can refer their case to a court of competent 
jurisdiction. The RSL also may detain suspected goods for the purpose of investigating or 
determining whether they are counterfeit. Although the Order  provides for sanctions and border 
measures to prevent counterfeit or pirated goods from being imported, the full implementation of 
the measures remains rather limited.  
 WT/TPR/S/ 447 • Lesotho  
 
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  4  TRADE POLICIES BY SECTOR  
4.1  Agriculture  
4.1.1   Overview  
4.1.  The agricultural sector accounted for less than 5% of GDP in 2022. However, most of the 
population (more than 70%) depends on agriculture for both food and income. Lesotho's primary 
crops are corn (maize), beans, wheat, sorghum, and peas. From a trade poin t of view, Lesotho is a 
net importer of agricultural and processed agricultural products. The sector contributed  about 12% 
to export earnings in 2021, while it accounted for approximately 35% of imports. Lesotho imports 
at least 70% of its foods from South  Africa . 
4.2.  The performance of agriculture is frequently undermined by environmental challenges, 
including erosion  and land degradation as a result of floods and droughts. Environmental degradation 
has worsened due to agricultural activities on steep slopes a nd marginal lands. The  2015/16 El Niño 
drought resulted in one of the worst droughts experienced in the last three  decades and left around 
709,000  people food insecure.36 In addition, Lesotho  recorded poor harvests through 2017 -20 due 
to below normal rains  during farming seasons. In reaction to this, the Government initiated an 
intensive crop production programme, with an emphasis on grain production (maize, wheat, and 
legumes ). 
4.3.  The most pronounced decline occurred in 2018, as output contracted by 20%.37 The lack of 
significant investment in agriculture has left the sector vulnerable to climate change. Several other 
constraints, including low uptake of new technologies and appropriate inputs, poor advisory services, 
and limited access to credit , continue to constrain the expansion of agricultural production and 
productivity.  
4.4.  About 20% of Lesotho's land area is arable.38 Lesotho is heavily deforested , with forests 
covering only some 1.6% of the land area.39 Agricultural activities are mainly under small -holder 
rainfed systems, which are characterized by very limited input use and heavy reliance on maize 
production. Most households have less than 1 ha per family. The main crops grown in Lesotho include 
maize, sorghum, wheat , and beans , whose production and yi eld were erratic during the review period 
(Table  4.1). The main types of livestock reared are sheep and goats, as well as cattle. The livestock 
industry is dominated by wool and mohair production.  
Table 4.1 Selected indicators for main crops, 2017 -22 
 2017/1 8 2018/19  2019/20  2020/21  2021/22  
Maize  
Production (metric tonnes)  109,912  24,621  21,782  33,987  27,963  
Area planted (hectares)  146,313  44,296  51,547  92,435  129,088  
Yield (metric 
tonnes/hectare planted)  0.75 0.56 0.42 0.37 0.22 
Sorghum  
Production (metric tonnes)  40,335  8,412  4,111  7,162  923 
Area planted (hectares)  88,999  3,332  14,157  9,825  24,079  
Yield (metric 
tonnes/hectare planted)  0.52 0.6 0.3 0.72 0.04 
Wheat  
Production (metric tonnes)  6,975  1,784  2,234  1516 5704 
Area planted (hectares in 
winter)  8,246  15,539  3,936  3755 7774 
Yield (metric 
tonnes/hectare planted)  0.93 0.6 0.6 0.4 0.73 
 
36 World Bank, Kingdom of Lesotho : Agriculture Public Expenditure Review . Viewed  at: 
https://documents1.worldbank.org/curated/en/696511563446367867/pdf/Lesotho -Agricu lture-Expenditure -
Review.pdf . 
37 Central Bank of Lesotho  (2020) , 2019 Annual Report . Viewed  at: 
https://www.centralbank.org.ls/images/Publications/Research/Reports/Annual/2019_CBL_Annual_Report_ -
_07.09.2020.pdf . 
38 World Bank, Arable Land (% of Land Area) - Lesotho . Viewed  at: 
https://data.worldbank.org/indicator/AG.LND.ARBL.ZS?locations=LS . 
39 FAO (2020) , Global Forest Resources Assessment 2020 . Viewed  at: 
https://www.fao.org/3/cb0021en/cb0021en.pdf .  WT/TPR/S/ 447 • Lesotho  
 
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   2017/1 8 2018/19  2019/20  2020/21  2021/22  
Beans  
Production (metric tonnes)  6,781  883 3,681  .. .. 
Area planted (hectares)  27,068  4,718  4,718  .. .. 
Yield (metric 
tonnes/hectare planted)  0.30 0.4 0.4 .. .. 
.. Not available.  
Source:  Lesotho Bureau of Statistics , Agricultural Production Survey  (various editions) . 
4.1.2   Agricultural policy  
4.5.  The institutional framework for agricultural policy has not changed since the previous Review . 
The Ministry of Agriculture, Food Security and Nutrition  (MAFSN) is responsible for agricultural policy 
formulation and implementation. It also provides advisory ser vices to farmers. Lesotho's key policy 
objective in agriculture is to develop the sector to ensure food security, and to leverage agricultural 
activities to promote job creation.  
4.6.  In accordance with the National Strategic Development Plan  II (NSDP  II) for 2018/19 -2022/23, 
the authorities aim at ensuring sustainable commercial agriculture and limit ing climate change 
impacts, environmental degradation, and other natural disasters, as well as harmful agricultural 
practices. In this regard, their specific i nterventions seek to, inter alia, increase agricultural 
production and commerciali zation, protect the environment, and reverse the trend of the current 
environmental degradation (Table  4.2). 
Table 4.2 Strategi c objectives in agriculture  
Strategic objectives  Interventions  
Improve functioning of land 
markets  ▪ Organize land titling.  
▪ Conduct land capability assessment and create online database of land 
parcels suitable for agricultural production and responsible ir rigation.  
▪ Market identified land parcels to potential investors.  
Improve genetic resources  ▪ Promote improved animal breeds and use of plant germ plasm.  
▪ Enhance seed certification capacity.  
▪ Enhance production and use of certified seeds (including plant propagating 
materials).  
▪ Promote research and dissemination of drought -tolerant crop varieties.  
▪ Promote conservation of gene banks, community seed banks, and 
zoological and botanical gardens to conserve biological diversity of 
valuable plant and animal spec ies. 
▪ Promote management and conservation of indigenous breeds and enhance 
appropriate use.  
▪ Promote vertical integration in agricultural sector.  
Build sustainable infrastructure for 
agriculturea ▪ Provide access corridors and other supporting infrastructure (e.g. livestock 
sales yards) for agriculture.  
▪ Promote environmentally  friendly and energy -saving irrigation and water 
harvesting.  
▪ Promote climate -smart and resource -eﬀicient infrastructure.  
▪ Develop irrigation policy and irrigation master plan.  
▪ Strengthen and promote integrated catchment management.  
▪ Promote development of private sector -led post -harvest and storage 
facilities.  
▪ Establish Lesotho Agri -Georeferenced Information System.b 
Improve access to finance and risk 
sharing in  agriculture  ▪ Provide financial and technical support services to farmers to facilitate 
access to finance.  
▪ Strengthen agricultural financial institutions.  
▪ Explore and establish agri -insurance in collaboration with private sector.  
▪ Finalize and operationalize collateral regis try to allow use of land and other 
assets as collateral.  
▪ Develop capital market instruments for agriculture.  
Improve technology and use for 
agriculture  ▪ Promote conservation agriculture.  
▪ Mechanize agricultural production.  
▪ Enhance integrated management of pests and diseases.  
▪ Strengthen national agriculture research.  
▪ Strengthen animal disease control through surveillance and risk 
assessment.  
▪ Enhance farmer access to veterinary services.  WT/TPR/S/ 447 • Lesotho  
 
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  Strategic objectives  Interventions  
Improve production of high -value 
crops and livestock prod ucts ▪ Support small -holder farmers in producing high -value crops.  
▪ Develop climate screening guidelines to reduce production risks and 
vulnerabilities.  
▪ Promote crop diversification with diﬀering susceptibilities to droughts, 
pests, ﬂooding, etc.  
▪ Review subsi dy policy to include high -value crops and livestock.  
▪ Develop market -responsive breeding programmes (both livestock and 
crops).  
▪ Promote intensive and commercial livestock production.  
▪ Promote production and use of quality feeds.  
Build capacity of farmers, 
agricultural institutions, and 
associations  ▪ Organize producers and industry players into enterprise -based associations 
(system) in order to transform the Lesotho agri -food system.  
▪ Provide institutional framework and enforcement mechanisms for 
development of well -functioning producer organi zations and industry 
associations.  
▪ Integrate environment and climate change into agricultural policies, 
strategies, plans, and regulatory frameworks.  
▪ Review Extension Services Model to incorporate outsourcing of e xtension 
service from private sector.  
▪ Raise awareness of farmers advocating for adoption of climate -smart and 
conservation agricultural practices.  
▪ Strengthen capacity of extension agents, associations, and training 
institutions on climate -smart and conserv ation agriculture.  
▪ Provide agriculture skills -based training for youth, women, and vulnerable 
groups.  
Develop value chains in agri -food 
systems and enhance agricultural 
markets  ▪ Promote aggregation of small -holder  farmers into upgraded value chains.  
▪ Improv e private sector -led distribution of input subsidies.  
▪ Develop community - and enterprise -based value chain systems.  
▪ Develop and promote sanitary and phytosanitary regulatory  framework 
systems and Codex -compliant food policy and food quality labels.  
▪ Develop and implement agricultural market strategy (e.g.  resuscitate 
agri-products, exhibitions, and auction sales) . 
▪ Promote agricultural value addition and processing.  
Improve management of range 
resources  ▪ Promote active and inclusive participation of al l stakeholders  in rangeland 
resource management.  
▪ Improve range governance.  
▪ Rehabilitate rangelands and wetlands in collaboration with  private sector, 
investors, and communities.  
▪ Develop and implement conservation strategies to improve  rangeland 
resource resilience to climate change.  
▪ Improve existing guidelines and grazing control regulations  for sustainable 
management of range resources.  
▪ Develop national fire policy for rangeland management.  
▪ Improve rangeland grazing capacity.  
▪ Devise and implemen t mechanisms for mandatory compensation for 
utilization of rangeland resources (e.g.  environmental services and 
ecosystem services) for the grazing levy, etc.  
▪ Manage alien and invasive vegetation species.  
▪ Enforce key land use policies and acts (e.g.  land, environment, range, 
water, climate change, etc.).  
a Physical infrastructure strategic interventions should take into account the environmental impact 
assessment, as per the Environment Act , 2008.  
b Timely availability of reliable georeferenced land, climate, plant nutrients, production, and water 
information  – integrated with infrastructural and socio -economic factors  – are essential for 
stakeholders, policy makers, enterprises, and land users to exercise the best choices in using 
resources to achieve sustainable levels of food production and development.  
Source:  Information provided by the authorities ; and  National Strategic Development Plan II, 
2018/19 -2022/23.  
4.7.  To strategically support agriculture's role in ensuring food safety , as well as climate change 
mitigation and adaptation, the authorities are in the process of developing a National Agriculture 
Investment Plan  (NAIP).  
4.8.  A Climate -Smart Agriculture Investment Plan  (CSAIP) was adopted in 2017. Among policy 
actions prior itized under the CSAIP, the authorities aim to strengthen agricultural research and 
extension and building capacity for farmers to access climate finance.40 Other public programmes to 
 
40 World Bank, Lesotho Climate -Smart Agriculture Investment Plan.  Viewed  at: 
https://documents1.worldbank.org/curated/en/847551575647928833/pdf/Lesotho -Climate -Smart -Agriculture -WT/TPR/S/ 447 • Lesotho  
 
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  improve agricultural production include the Wool and Mohair Production P roject  (WAMPP), the 
Small -holder Agriculture Development Project , and the Agriculture Productivity Programme for 
Southern Africa  (APPSA).  
4.9.  Lesotho submitted its most recent domestic support notification in 2022, covering FY2019/20 
and FY2020/21.41 All the m easures included in the submissions were exempt of reduction 
commitments and consisted of, inter alia, research management, veterinary services, rehabilitation 
of irrigation services , and seed and fertili zer support programmes. In its most recent notificat ions 
submitted in 2022, Lesotho  also notified that it did not grant any agricultural export subsidies during 
calendar years 2019, 2020 , and 2021.42 
4.10.   The LNDC also provides support to agricultural projects, mainly in horticulture, in the context 
of the parti al credit guarantee scheme, which targets all sectors  (Section  3.2.5).43 Since 2020, the 
Scheme provides farmers with  a 75% guarantee on loans worth up to LSL  8 million . 
4.11.   Among policy interventions in the agricultural sector, temporary price controls may ap ply to 
bread, beans, peas, maize , and sorghum depending on market conditions  (Section 3.3.2) . At the 
time of the previous Review, raw milk was subject to price controls, administered by the Lesotho 
National Dairy Board (LNDB) . The authorities indicate that no price control was undertaken for these 
products  during the Review period . 
4.12.   Lesotho also maintains different types of regulations affecting agricultural imports and 
exports. In 2023, the simple average applied MFN tariff in agriculture (ISIC  Rev.2 definition) 
was 3.7% (Main  Report, Table  A3.1). Specific, mixed, and variable (formula) duties apply mainly to 
agricultural products. In addition,  certain agricultural goods and inputs are subject to VAT at 
zero rate; these include beans, bread, len tils, maize, milk, peas, sorghum, wheat, livestock , and 
poultry feed as well as fertilizers, seeds , and pesticides.  
4.13.   Pursuant to the 1984 Export and Import Control Act, permits are required for imports of 
certain agricultural goods, including those originat ing in SACU  members  (Sections  3.1.4). The list 
includes beans and peas, bread, dairy products, eggs, fruits, sugar, meat , and vegetables. According 
to the authorities, this system is implemented with a view to better managing local supply. The 
permits are issued by different institutions including MAFSN and the L NDB. 
4.14.   Exports of some agricultural products (plants, animals, and related products) also require 
permits (Section  3.2.2). A permit is granted only if the product has been duly inspected in 
accordance  with the appropriate veterinary or health requirements.  
4.15.   The dairy sector continues to be governed by the L NDB. In accordance with the Agricultural 
Marketing (Distribution of Dairy Products) Regulations , 1992, the LNDB  oversees the issuance of 
permits to d airy producers, processors , and traders, and charges a levy on all invoiced products. It 
also oversees standards of production, storage, packaging, processing, and distribution of dairy 
products.  
4.16.   To import dairy products, traders must hold , in addition to the import permit issued by the 
LNDB, an SPS permit issued by the Department of Livestock Services (Section  3.1.6). According to 
the authorities, the import permit system aims to monitor the quantities of milk and milk products 
imported. Im ports of dairy products attract the highest SACU CET rates (Main  Report, Section  3.3.1). 
Moreover, imported dairy products are subject to a levy of 2.5% of their value.  
4.17.   The l and ownership framework was reformed in 2010 to further improve the investment 
climate in agriculture. For example, pursuant to the Land Act , 201044, land ownership is open to 
nationals and foreigners. Foreigners can hold land titles as long as they have a local partner that 
owns at least 20% of the company. However, according to the NS DP II, the regulation of land 
 
Investment -Plan-Opportunities -for-Transitioning -to-More-Productive -Climate -Resilient -and-Low-Carbon -
Agriculture.pdf . 
41 WTO documents G/AG/N/LSO/14/Rev.1 , 28 September  2022; and G/AG/N/LSO/15, 
27 September  2022. 
42 WTO documents G/AG/N/LSO/11, G/AG/N/LSO/12 , and G/AG/N/LSO/13, 19  July 2022. 
43 LNDC. Viewed  at: https://www.lndc.org.ls/agro . 
44 Land Act , 2010 (Act No.  8 of 2010) , published in the Government Gazette  on 14  June 2010. WT/TPR/S/ 447 • Lesotho  
 
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  markets remains weak due to high prevalence of land speculation. The  authorities note that lack of 
access to land for productive use and lack of enforcement  of land policies  have affected private 
investments, especially for fo reign investors.45 
4.2  Mining and energy  
4.2.1   Mining  
4.18.   During the review period, the contribution of the mining sector  fluctuated , with a peak in 
2020 (Table  4.3). Diamond production is the backbone of the sector in Lesotho. It recorded a 
noticeable growth from 2017  to 2019, due to two new entrants and favourable international prices. 
Lesotho has not yet developed diamond polishing industries. As a consequence, diamond exports 
are exclusively made of rough  diamonds . 
4.19.   Economic activities in the sector also include industrial minerals such as dolerite, sandstone, 
clay, and sand. There have also been some indications of s emi-precious stones such as agate, chert, 
rock crystal, amethyst, olivine, zircon, and chrome diopside.  
Table 4.3 Mining indicators, 2016 -22 
 2016  2017  2018  2019  2020  2021  2022  
% contribution of mining and 
quarrying to GDP (constant prices)  5.2 4.3 6.7 5.9 9.6 5.8 5.0 
Diamond production ( '000 carats)  342 1,126  1,294  1,113  481 .. .. 
Exports ( '000 carats)  245 1,001  1,278  1,306  539 .. .. 
.. Not available.  
Source:  Central Bank of Lesotho; and Kimberley Process, Lesotho . Viewed  at: 
https://www.kimberleyprocess.com/en/lesotho -0. 
4.20.   As was the case during the previous Review, there are six major mines under leases in 
Lesotho.46 All mines are join tly owned by the State and a foreign company. The state participation 
equity interest in each company ranges from 20% to 30%.  
4.21.   The Ministry of Natural Resources is the main entity responsible for the mining sector. It is in 
charge of disseminating informati on on mineral resources, as well as regulating and managing 
prospecting and mining activities to develop the mining sector. Under the Ministry, the Commissioner 
of Mines and Geology is responsible for ensuring the implementation of the mining legislation a nd 
conducting inspections of mining premises and operations.  
4.22.   The Mining Board, an interdepartmental group formed by representatives of, inter alia, the 
Ministry of Finance and Chamber of Commerce and chaired by the Principal Secretary of the Ministry 
of Na tural Resources, is responsible for the issuance of authorizations to both local and foreign 
investors to conduct activities in the mining sector.  
4.23.   Lesotho's mining development strategies are specified in its 2015 Mineral and Mining Policy. 
The Policy notes  several challenges that continue to hinder the development of a responsible, 
equitable , and sustainable mining industry in Lesotho. These include insufficient knowledge of the 
country's mineral resources endowment, an inadequate taxation regime , and a lack of a clear 
position of the Government on value  addition and domestic empowerment.47 
4.24.   As part of the objectives pursued by Lesotho's mining policy, the authorities expressed the 
need to update mining and quarrying legislation to maximi ze the sector's contribution to economic 
and social development. However, the legal and institutional framework has remained broadly 
 
45 Government of Lesotho, National Strategic Development Plan  II, 2018/19 -2022/23 . Viewed  at: 
https://www.gov.ls/wp -content/uploads/2021/06/National -Strategic -Development -Plan-II-2018-19-2022-
23.pdf . 
46 Letseng, Kao, Kolo, Liqhobong , Lemphane , and Mothae.  
47 Ministry of Mining, The Minerals & Mining Policy 2015 . Viewed  at: 
http://www.mining.gov.ls/legislation/Minerals%20and%20Mining%20Policy.pdf . WT/TPR/S/ 447 • Lesotho  
 
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  unchanged. The authorities indicate that the Ministry of Mining is in the process of reviewing the 
mining sector related law s, which are mostly outdated and fragmented.  
4.25.   The regulation of artisanal mining is also an integral part of the authorities' ambition in the 
mining sector. The Government's plan, as indicated in the Policy, aims at transforming artisanal 
mining activities from their hazardous working conditions and environmental degradation practices 
to a poverty -reducing economic activity. In 2021, Lesotho passed a new law legali zing diamond 
artisanal and small -scale mining, which has been prohibited since 2005. The new la w specifies that 
artisanal mining is open only to indigenous Basotho individuals. The publication of the law was 
preceded by passing of the Precious Stones (Prevention of Illicit and Theft of Diamonds) Regulations, 
2020, which paved the way by granting amn esty to people in possession of illegal rough diamonds 
if they declare d the stones to the Government.  
4.26.   The regulatory framework was largely described in the previous Review .48 Under the 
Constitution, all rights of ownership in minerals are vested in the Sta te. Lesotho's mining sector 
continues to be governed by the Mines and Minerals Act , 2005; Precious Stones Order , 1970; and 
the Mine Safety Act , 1981.  
4.27.   By law, companies (local and foreign) willing to engage in mining activities require a licence. 
The Mines and Minerals Act No.  37 of 2005, deals  with, inter alia, the allocation of prospecting and 
mining licences and leases, transfer, and revocation of mineral titles, and granting of incentives to 
local and foreign investors. The Mining Board issues prospectin g licences, mining leases, and mineral 
permits, provided the applicant (national or foreign) has adequate financial resources, technical 
competence , and experience, and makes proper provisions for environmental protection. The 
environmental impact assessme nt licence is issued by the Ministry in charge of environment. The 
act provides for the following types of mining rights: ( i) prospecting licence to conduct mineral 
exploration; ( ii) mining lease to conduct mining extraction and production on a large scale ; and 
(iii) a mineral permit. Application for all three mining rights must be submitted to the Mining Board 
through the Commissioner.  
4.28.   The duration of an exploration licence is two  years from the date of its issuance, renewable 
for one more year, unless oth erwise provided by the Minister. It does not confer to its holder any 
right to dispose of discovered substances, which remain the property of the State. The duration of 
the mining permit is 10  years, and thereafter it may be renewed for another 10  years.  
4.29.   Production and trade of precious stones is regulated by the Precious Stones Order No.  24 
of 1970, which complements the Mines and Minerals Act , 2005. Pursuant to the legislation, a ll 
diamonds bought or imported into Lesotho must be registered. The licensing regime for diamond 
dealing is governed through the Precious Stone Regulations , 2004.  
4.30.   A number of trade policy measures apply to the diamond industry. Exports of diamonds 
require  Kimberley Process Certificate s (Section  3.2.2) , and are subject to a levy of 15% 
(Section  3.2.3). Imports of diamonds are subject to a tariff of zero.  
4.31.   The Mine Safety Act ,1981 aims at preventing the occurrence of accidents at mines, and 
securing the safet y, health , and welfare of persons employed at mines.  
4.32.   The Government reserves the right to acquire at least 20% ownership in any large -scale mine. 
The terms and conditions governing a mining lease for diamonds are subject to individual 
negotiations with the  Mining Board and the Ministry of Finance on the related tax conditions. 
Regarding taxation, under the Mines and Minerals Act No.  37 of 2005, the Government requires 
payment of a 10% royalty on precious stones. However, in practice, the rate can be negotia ted on 
a case -by-case basis. Some companies operate under reduced rates as low as 4%.49 
 
48 WTO document WT/TPR/S/324 /Rev.1 , 5 February  2016. 
49 IMF (2022) , Kingdom of Lesotho: Selected Issues . Viewed  at: 
https://www.imf.org/en/Publications/CR/Issues/2022/06/07/Kingdom -of-Lesotho -Selected -Issues-519023 . WT/TPR/S/ 447 • Lesotho  
 
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  4.33.   Lesotho maintains a number of incentives to attract investors to the sector. Mining companies, 
local or foreign, are exempted from taxes on capital items during explora tion and construction, and 
there are certain exemptions from withholding taxes on dividends and interest payments.  
4.2.2   Energy  
4.34.   The contribution of electricity and water to Lesotho's GDP stood at 5.3% in 2022  (Table 1.1) . 
The Government's strategic direction of the energy sector developments is set out in Lesotho's 
Energy Policy 2015 -2025. The Policy aims to provide Lesotho with an affordable, reliable , and 
environmentally  friendly energy supply. It is aligned to Vision 2020 and the NSDP  II, and promotes 
developm ent of environmentally cleaner renewable energy and increasing the share in the energy 
mix. 
4.35.   Lesotho's energy sector is characterized by a high level of consumption of energy from 
biomass sources. In 2020, Lesotho's final energy consumption was dominated by biofuels at 57% 
followed by oil products  at 26%, electricity at 7% , and coal at 7%.50 
4.36.   The predominance of traditional biomass energy (wood, shrubs, crop wastes , and dung) to 
meet households' energy needs, mostly in rural areas, poses challenge s of environmental 
degradation in the form of deforestation  and soil erosion. The heavy dependence on imported 
petroleum products also puts the economy at risk of unstable oil import prices.  
4.37.   Lesotho has no known oil, gas , or coal reserves; thus, all petrol eum products and coal are 
imported from South  Africa . 
4.2.2.1   Water and electricity  
4.38.   Water is in relative abundance and thus the generation of electricity using hydropower has 
strong potential. However, the current infrastructure is very limited, and Lesotho has be en obliged 
to import power from Mozambique and South  Africa . Electrification in Lesotho is limited, particular ly 
in rural areas. About 41% of households have access to electricity, concentrated mainly in urban 
areas. The Government has set a goal of univer sal access to electricity by 2030.51 Lesotho has 
identified hydropower, wind generation, and solar power as potential renewable energy sources to 
help reach this target.  
4.39.   Lesotho's main source of electricity is from the Muela hydropower plant that generates  about 
72 MW (Table  4.4). Energy demand, which stands at 145  MW, is satisfied from both domestic 
generation and through imports from Electricidade de Moçambique (EDM) in Mozambique and Eskom 
in South  Africa  within the Southern African Power Pool  (SAPP) (Ta ble 4.5). Lesotho also exports 
excess electricity produced to Eskom when electricity demand is low (Table  4.6). 
Table 4.4 Installed capacity of electricity power stations  
(MW and kVA ) 
Area Units  Number  
Semonkong  Hydro  (MW) 0.18 
Semonkong  Diesel  (kVA)  500 
Mantsonyane  Hydro  (MW) 2 
Muela  Hydro  (MW) 72 
Moshoeshoe  1 Solar (MW) 0.28 
Source:  Lesotho Highlands Development Authority ; and Lesotho Electricity Company . 
 
50 African Energy Commission, Lesotho . Viewed  at: https://au -afrec.org/lesotho . 
51 Government of Lesotho, National Strategic Develop ment Plan II , 2018/19 -2022/23 . Viewed  at: 
https://www.gov.ls/wp -content/uploads/2021/06/National -Strategic -Development -Plan-II-2018-19-2022-
23.pdf . WT/TPR/S/ 447 • Lesotho  
 
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  Table 4.5 Electricity purchases by  the Lesotho Electricity Company  (LEC) from Muela, 
Eskom , and EDM , FY2015 -20 
(GWh)  
FY Muela  Eskom  EDM Total  
2015/2016  520.81  203.01  80.37  804.18  
2016/2017  512.05  268.36  105.18  885.59  
2017/2018  518.28  275.83  98.06  892.17  
2018/2019  494.43  296.61  99.08  890.11  
2019/2020  389.14  429.82  99.51  918.47  
Source:  Lesotho  Electricity  Company.  
Table 4.6 Total electricity imports and exports,2015 -19 
(GWh)  
Year Imports (GWh)  Exports  (GWh)  
2015 260.6  4.4 
2016 372.6  2.6 
2017 386.9  0.8 
2018 396.7  2.9 
2019 529.3  0.9 
Source:  Lesotho  Highlands  Development  Authority ; and  Lesotho  Electricity  Company.  
4.40.   In the electricity sector, the Lesotho Electricity Authority Act , 2002 (amended) is the main 
law regulating the industry. In addition, a number of regulations are in place to govern, inter alia, 
licence applications52, licence fees53, electricity prices54, and dispute resolution.55 In 2019, the 
Lesotho Electricity and Water Authority (Electricity Supply) Regulations, 2019 were issued to 
implement a number of safety standards in the electricity sec tor. In 2021, the Mini -Grid Power 
Generation, Distribution and Supply Regulation , 2021 was promulgated to promote the development 
of mini -grid systems. According to the authorities, there are currently 11 concession agreements 
signed with a developer to es tablish mini -grids in 7 districts to increase electricity access in 
hard-to-reach areas.  
4.41.   The Lesotho Electricity and Water Authority (LEWA) regulates both electricity (i.e.  generation, 
transmission, distribution, supply , and trade) and urban water and sewe rage services. The LEWA  is 
responsible for issuing licen ces for electricity supply activities, setting tariffs, regulating the quality 
of supply, and resolving disputes.  
4.42.   The electricity industry continues to be dominated by the LEC,  which is the monopoly 
transmitter and distributor of electricity , and the Lesotho Highlands Development Authority  (LHDA) , 
which is the main generator of electricity through its Muela Hydro Power Station. The two companies 
are state -owned. The LHDA sells almost all the energy it produces to the LEC (Table  4.7). Private 
investment is currently allowed in electricity generation. According to the authorities, an 
Independent Power Producer IPP) was licensed in 2022 by LEWA. For an IPP to sell power to the 
LEC, a Power Purchase Agreeme nt (PPA) must be signed. The Ministry of Natural Resources is 
currently drafting an IPP framework that will provide clarity and encourage investment into the 
power generation sector by IPPs. The IPP sells its output to the LEC in accordance with a PPA agreed 
by the two parties and approved by the LEWA.  
 
52 Lesotho Electricity Authority (Application for Licences) Rules , 2012 (Legal Notice No.  38 of 2012) 
published on 8  June 2012. 
53 LEA (Licensee Fees and Levies) Regulations , 2009 (Legal Notice No.  135 of 2009) ; and LEWA (Licence 
Fees and Customer Levies for Water and Sewerage Services) Regulations , 2013 (Legal Notice No.  140 
of 2013).  
54 LEA (Electricity Price Review and Structure) R egulations , 2009 (Legal Notice No.  136 of 2009).  
55 LEA (Resolution of Disputes) Rules , 2010 (Legal Notice No.  34 of 2010) ; and LEWA (Resolution of 
Complaints for Water and Sewerage Services) Rules , 2013 (Legal Notice No.  102 of 2013).  WT/TPR/S/ 447 • Lesotho  
 
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  Table 4.7 Electricity generation and sales by LHDA to LEC, 2015 -19 
(GWh) 
Year Generation  Sales  to LEC 
2015 532.2  527.8  
2016 507.7  505.1  
2017 501.0  500.2  
2018 515.8  512.9  
2019 391.6  390.7  
Source:  Lesotho  Highlands  Development  Authority.  
4.43.   Rural electrification projects are mainly conducted by the Rural Electrification Unit (REU) under 
the Department of Energy . It coordinates and manages the implementation of off -grid and rural 
electrification projects outside the LEC service area. REU proje cts are funded through a Universal 
Access Fund, which is financed by the electrification levy collected by LEC.56 LEC is also involved in 
Lesotho's rural electrification efforts, with some projects implemented within its service territory 
(within 3.5  km fr om the existing distribution network).  
4.44.   LEC has historically filed for tariff changes each year. LEWA published the application with an 
invitation to stakeholders to submit their comments in writing. An application by LEC becomes 
effective three months after filing unless LEWA issues a notice of mo dification or a counter proposal. 
LEC's tariff model relies on a single -part variable tariff (per kWh) for residential, general purpose, 
and street lighting customers and a two -part tariff (with maximal demand capacity and energy 
consumption charges) for c ommercial and industrial customers.57 All electricity consumers also pay 
customer and electrification levies per kWh on top of the variable portion of the tariff. The customer 
levy covers a portion of LEWA's operating costs, and the electrification levy fu nds electrification 
projects.  
4.45.   In FY2019/2020, Lesotho introduced two categories of tariff for residential consumers. The 
first category is for the first 30  units (kWh) , which are priced at LSL  0.7273 per kWh. The 
second  category is for consumers consuming above 30  units (kWh) , the price of which is set at 
LSL 1.4782 per kWh. During the review period, the lowest electricity tariffs were for industrial and 
commercial consumers (under LSL  0.3 per kWh).  
4.46.   The water sector in Lesotho is mainly governed by the Water Act , 200858, which regulates the 
management, protection, conservation , and use of water resources.59 The Water and Sewerage 
Company  (WASCO), a state -owned company, maintains a monopoly in Lesotho's water supply 
activities.60 It is responsible for the  abstraction, treatment, distribution , and storage of water for 
urban populations. The Department of Rural Water Supply  (DRWS) has the mandate to ensure the 
provision of water supply in rural areas.  
4.47.   As indicated during the previous Review, Lesotho has deve loped together with South  Africa  
the Lesotho Highlands Water Project  (LHWP) with two main objectives: ( i) to increase its electricity 
production ; and ( ii) to export/transfer water to South  Africa  to increase its revenues from water 
royalties and electricit y sales. The project consists of four phases , the last of which  was expected to 
be finalized by 2020.  It was expected that by 2020, 5 dams and 200  kilometres of tunnels would 
have been constructed between the 2 countries.  
4.2.2.2   Hydrocarbons  
4.48.   Lesotho is not an oil  producer, and to date no explorations have been conducted to discover 
the existence of viable resources. Petroleum products used domestically are imported from 
South  Africa . In terms of volume, petrol is the most imported product (Table  4.8). Lesotho does not 
 
56 LEA (Universal Access Fund) Rules , 2011 (Legal Notice No.  83 of 2013).  
57 Department of Energy, Investment Plan for Lesotho.  Viewed  at: 
https://www.cif.org/sites/cif_enc/files/srep_investment_plan_lesotho.pdf . 
58 Water Act , 2008 (Act No.  15 of 2018) , published in the Government Gazette on 30  December  2008. 
59 There is also a Lesotho Water and Sanitation Policy , which was issued in 2007.  
60 Water and Sewerage Company (Proprietary) Limited (Establishment and Vesting Act, 2010) 
(Act No. 10 of 2010) , publis hed in the Government Gazette on 3  August  2010.  WT/TPR/S/ 447 • Lesotho  
 
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  have a national depot ; however, it relies on four  privately owned depots in Maseru with storage 
capacity of approximately eight  days of petroleum supply.  
Table 4.8 Lesotho's imports of petrole um products, 2015 -22 
(kilolitres)  
 Products  
Petrol  Diesel 500  ppm Diesel  50 ppm Illuminating paraffin  
2015 116,904.447  67,582.35  29,972.24  28,930.03  
2016 127,157.00  59,734.92  41289.78  3,0871.33  
2017 133,335.50  56,4367.62  37,334.45  33,620.34  
2018 138,186 .87 48,195.00  49,195.00  34,160.62  
2019 139,639.00  0 114,110.00  26,289.00  
2020 121,359.00  0 95,588  44,106.00  
2021 124,011.00  0 105,479.00  41,043.00  
2022 120,594.00  0 118,384.00  31,409.00  
Source:  Information provided by the Department of Energy . 
4.49.   In principle, the Regulation of the Importation and Marketing (advertising, selling , and pricing) 
of Petroleum Products is the responsibility of the Department of Energy . In 2000, under the Fuel and 
Service s Act , 1983, the responsibility for pricing of petroleum products was delegated to the 
Petroleum Fund with Legal Notice No.  44 of 2000. The Petroleum Fund was legally established by 
the Petroleum Fund Legal Notice No.  96 of 1997. Its responsibility  includes, inter alia, reviewing and 
publishing, on a monthly basis, the pump prices of diesel, petrol, and illuminating paraffin. In light 
of keeping the petroleum products' pump prices the same throughout Lesotho , the districts and/or 
domin ant places are categori zed into four pricing zones based on the distance travelled while 
delivering products from Maseru. Each zone has a transport differential element in its price structure.  
4.50.   Only registered oil companies are permitted to import petroleum  fuel into Lesotho in quantities 
greater that 200  litres. According to the authorities, five  oil companies (of which two  are 
multinational) are currently in charge of the importation of petroleum products, usually from the 
Durban refineries in South  Africa . Companies that are interested in engaging in petroleum fuel 
import business must lodge an application with the Department of Energy . The licensing procedures 
are governed by the Fuel and Services (Importation of Petroleum Products Products) 
Regulation , 1999. Businesses wishing to import petroleum fuel into Lesotho are required to submit, 
mainly, the following documents: the company's proof of registration in Lesotho, proof of depot 
availability of a minimum 500,000  litres, supply agreement from the source , and the proposed 
marketing arrangements with locally registered petroleum dealers.  
4.3  Manufacturing  
4.51.   Manufacturing remains an important contributor to Lesotho's GDP growth , and textile s, 
clothing , and footwear activities are the main component s in the sector 's value added and exports. 
Other manufacturing activities include the production of leather, food and beverages, consumer 
electronics, clay -based brick , and ceramic tiles.  In 2022, the sector's contribution to GDP was 19.1%  
(Table 1.1) . 
4.52.   Most firms operating in Lesotho's manufacturing sector are foreign owned, mainly from 
South  Africa , Chinese  Taipei , the Philippines, and China . In general, their presence in Lesotho is 
driven by favourable labo ur costs and the advantages of US trade preference under the 
AGOA  scheme.  Locally owned firms are mostly MSMEs . The bulk of manufactured products are 
exported, about two  thirds to the United  States , and one  quarter to South  Africa . 
4.53.   Lesotho's NDSP  II considers manufacturing as one of its priority sectors. The Pol icy pursues 
the objectives of diversifying products , building business linkages between domestic and foreign 
firms, and develop ing industrial clusters and integrated supply chains.  
4.54.   The Government 's strategic vision in the manufacturing sector is to take ad vantage of 
opportunities stemming from existing preferential agreements , such as those under SACU, SADC, 
AGOA , and GSP , to diversify and deepen manufacturing activities for regional and international 
markets to promote sustainable job creation. Lesotho adopted the following policy documents to 
guide Government measures: NSDP  II and Lesotho's Industrial Policy 2015 (to be reviewed).  WT/TPR/S/ 447 • Lesotho  
 
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  4.55.   The pre -COVID -19 (first  quarter  2020) figures indicate that there were 51,510  people 
employed in the manufacturing sector. However, the uncertainty brought about by the COVID -19 
pandemic has led to a halt in some manufacturing activities; hence, the number of employees in 
manufacturing declined to 34,082 in 2021.61 
4.56.   Clothing and text iles continue to be among the items subject to the highest average import 
duties of the SACU tariff schedule (Main  Report, Table  A3.1). Worn clothing and other worn articles 
attract tariff rates higher than 50% (Main  Report, Table  3.3). The highest ad valorem 
equivalent  (AVE) (532.3%) applies to some worn textile articles.  
4.57.   Competitiveness in manufacturing is undermined by  several factors, including limited access 
to finance , low productivity, poor infrastructure, high input costs , and low -skilled labour. Mo reover, 
the sector is facing increasing competition from abroad, due to increased erosion of the value of 
AGOA and GSP preferences.  
4.58.   The Ministry of Trade, Industry, Business Development and Tourism  (MTIBDT) is responsible 
for the manufacturing sector. It i s in charge of coordinating the development and implementation of 
the Government's vision for Lesotho's industrial activities. The Ministry chairs the Inter -Ministerial 
Task Team for the Textiles and Apparel Industry , which is in charge of analysing indust ry 
performance and making recommendations to improve its competitiveness and attract investments. 
Another important institution for the manufacturing sector is the Lesotho National Development 
Corporation  (LNDC), whose functions include facilitating  invest ment in the manufacturing sector 
(Section  2.3). 
4.59.   Lesotho maintains an incentive regime for its local manufacturers , particularly those who 
export their products (Section  3.2.4). These firms are subject to a corporate tax of 10%, compared 
to 25% for other ac tivities. Other incentives granted to the manufacturing sector are those 
administered by the LNDC , which focus mainly on investment (Section  2.3.4).  
4.4  Services  
4.4.1   Financial services  
4.4.1.1   Overview  
4.60.   Lesotho's financial sector consists of 4 commercial banks, 10  insurance companies, 
49 insurance brokers, 132  microfinance institutions, 2 asset management firms, 6 stockbrokers, 
2 money transfer institutions, 1 credit bureau, 1 financial leasing company, 5 mobile money issuers, 
7 registered pension funds, 3 pension fund intermediaries, 4 pension fund administrators, and 
1 "large" financial cooperative. The Central Bank of Lesotho (CBL) is the regulator of all Lesotho's 
financial institutions ; as such , it is the main licensing authority. Besides the CBL, the Commissioner 
of Cooperative s also has some responsibilities in the financial sector, and is in charge of cooperatives. 
Large financial cooperatives are regulated by the CBL, which conducts onsite examinat ion and offsite 
surveillance to ensure adherence to the prudential requirements and proper functioning of the 
banking system.  
4.61.   In 2020, the financial system's assets , as a ratio  of GDP, was 85.6%.62 The banking industry 
accounted for 67.1% of the total fina ncial sector assets, while the insurance industry accounted 
for 28.8%.  
4.62.   The capital markets in Lesotho are still small and concentrated, with limited investment 
options. They comprise mainly money markets and securities markets entirely made up of 
government securities.  
4.63.   The CBL considers FinTech as instrumental in the provision of various innovative financial 
services and products in particular to facilitate financial inclusion and to move towards a cash-lite 
 
61 Lesotho Bureau of Statistics  (2021) , Performance of the Manufacturing Sector in Lesotho . Viewed  at: 
https://www.bos.gov.ls/new%20folder/Copy%20of%20Economics/Manufacturing_1st_Quarter_2021.pdf . 
62 Central Bank of Lesotho  (2022) , 2021 Financial Stability Report . Viewed  at: 
https://www.centralbank.org.ls/images/Publications/Supervision/2021_CBL_Financial_Stability_Report_ -
_Internet_File_ -_HR_Singles_ -_5.07.2022.pdf . WT/TPR/S/ 447 • Lesotho  
 
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  society. At the same time, the CBL is cognizant of the risks associated with this process. As a 
consequence, the authorities developed in 2020 the Concept Note on FinTech Strategy for Lesotho. 
The Concept Note is expected to engage all relevant stakeholders in the FinTech space regarding 
the nee d to develop  a FinTech Strategy for Lesotho.63 
4.64.   The financial sector is governed mainly by the Central Bank of Lesotho Act , 2000; the 
Cooperative Societies Act , 2000; the Financial Institutions Act (FIA) , 2012; and the Insurance 
Act, 2014. The FIA  2012 esta blishes the conditions for licensing and supervision of local or foreign 
banking and credit institutions, excluding insurance providers, and depending on their 
characteristics, cooperatives and credit bureaus.  The Insurance Act provides the regulatory 
framework for insurance.  A number of regulations and acts complement these legal instruments by 
dealing with specific aspects of the financial sector.64 
4.4.1.2   Banking and non -banking services (excluding insurance)  
4.65.   Lesotho's banking system remains concentrated and la rgely foreign owned. The three  major 
banks (Standard Lesotho Bank, First National Bank, and Ned Bank)  are subsidiaries of South  Africa n 
banks , and the fourth ( Lesotho Post Bank) , the only domestic bank, is fully owned by the 
Government.  In 2022, these three subsidiaries accounted for about 87% of total loans and 
had 35 (out of a total of 50 ) branches in 2022 . 
4.66.   The basic legal framework for the banking and non -banking industr ies (excluding insurance) 
has remained broadly unchanged and cont inues to be regulated mainly by the F IA 2012.  Licensing 
requirements are the same for nationals and foreigners , and they remained broadly unchanged 
during the review period. In accordance with the FIA  2012, licensing and minim um capital 
requirements depend  on their classification in one of the four categories designed by the law 
(Table  4.9). In addition, financial institutions  must be incorporated as a "public company" in 
Lesotho.65 
Table 4.9 Financial institutions classification (excluding insurance companies), 2021  
Type of financial 
institution  Coverage  Minimum capital 
requirement  
Type I  (a) Commercial banks ; (b) merchant/investment banks ; 
and (c)  mortgage banks  LSL 20 million  
Type II  (a) Saving banks ; (b) deposit -taking banks microfinance 
business ; (c) large financial cooperatives  LSL 10 million  
Type III  (a) Credit institutions ; (b) acceptance houses ; 
(c) discount houses, and (d)  Finance Houses  LSL 5 million  
Type IV  (a) Foreign excha nge bureaus ; (b) money transfers ; 
(c) credit guarantee facility, and (d)  credit only 
microfinance institutions  To be determined by the 
Commissioner in charge  of 
the regulations  
Source:  FIA 2012.  
4.67.   As was the case during the previous Review, Lesotho does not maintain any restriction on 
foreign capital but applies restrictions on the members of the board of directors of a financial 
institution. The chief executive officer, who is a member of the board  of directors, must reside in 
Lesotho. Foreign financial institutions can apply for a licence as long as they appoint a legal agent 
resident in Lesotho, and according to the authorities they can be established as branches or 
subsidiaries as long as they me et the conditions set by the legislation.  
4.68.   Persons willing to carry out financial activities as a cooperative must register with the 
Commissioner of Cooperatives . 
 
63 CBL (2020) , 2020 Annual Report . Viewed  at: 
https://www.centralbank.org.ls/images/Publications/ANNUAL_REPORTS/CBL_2020_Annual_Report.pdf . 
64 CBL, Supervision Re gulations . Viewed  at: https://www.centralbank.org.ls/index.php/legislation -
supervision/540 -regulations . 
65 The term "public co mpany" in Lesotho refers to limited (liability) companies whose shares can be 
freely sold and traded to the public (Articles  23 and 24 of the Companies Regulations , 2012). In the case of 
private companies, shares can only be allocated only among their owne rs. WT/TPR/S/ 447 • Lesotho  
 
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  4.69.   Interest rates are market -driven. According to the authorities, the CBL sets only the prime 
interest rate. Furthermore in 2022, it issued a Directive to oblige commercial banks to keep the 
spread between lending and deposit rates under a certain limit.66 
4.70.   CBL continues to abide by the Basel  I Rules for determining the prudential rules for 
commercial banks in Lesotho. Basel  II.5 implementation was postponed in 2022.  
4.71.   With respect to Lesotho's anti -money laundering framework, the financial institutions (Know 
Your Customer) Guidelines , 2021 repealed the financial institutions (Know Your Custome r) 
Guidelines , 2007. The authorities consider that the money laundering and financing of terrorist 
activities are now regulated under a more modern regime, made up of the Money Laundering and 
Proceeds of Crime Act , 2008, as amended in 2016, and the Money L aundering and Proceeds of Crime 
Regulations , 2019.  
4.72.   Three  commercial banks and two  private change bureaus are authorized by the CBL to deal 
in foreign exchange, in accordance with Lesotho's exchange controls mechanism.67 The CBL retains 
the power to approve  foreign exchange requirements for all capital account transactions including 
FDI and remittances.  
4.73.   In accordance with the Credit Reporting Act , 2011 and its Regulations , 2013, Lesotho has a 
licensed credit bureau (a South  Africa n operator) to collect and p rocess credit information of 
potential customers to assess their credit risk. According to the authorities, the financial sector uses 
this process to confirm the credit status of each applicant. As a result, it has helped lenders receive 
better credit info rmation and , therefore, reduce d the apparent credit risk.  
4.74.   In general, Lesotho's banking sector performed well during the review period (Table  4.10). 
The year 2021 exhibited some signs of weakness, mainly with respect to the industry's profitability, 
which deteriorated further, as banks were still recovering from the impact s of the COVID -19 
pandemic. In addition, banks' asset quality remains an issue of concern, due to concentration risk 
in certain loan types and exposure to single or group of borrowers. In 2022, there was a decline on 
the liquidity positions as indicated by a decline in liquidity ratios.  
Table 4.10 Financial soundness indicators, 2017 -22 
(%) 
  Dec. 2017  Dec. 2018  Dec. 2019  Dec. 2020  Dec. 2021  Dec. 2022  
Capital  
adequacy  Regulatory capital to 
risk-weighted assets  17.8 17.9 19.2 23.0 22.2 24.0 
 Regulatory  Tier 1 capital to 
risk-weighted assets  21.2 20.2 21.5 24.9 24.1 25.6 
 Non-performing loans net of 
provisions to capital  6.4 5.8 4.7 4.6 5.7 5.2 
Asset quality  Non-performing loans to 
total gross loans  4.4 3.7 3.3 4.2 4.1 4.3 
 Large exposures to capital  80.7 82.1 83.0 69.2 58.4 61.6 
Earnings and 
profitability  Return on assets  2.4 3.4 3.1 2.0 0.6 1.7 
 Return on equity  18.0 28.6 24.8 17.1 5.0 13.4 
 Interest margin to gross 
income  59.6 60.4 58.5 56.1 57.4 56.3 
 Noninterest expenses to 
gross income  62.2 60.7 41.5 65.6 77.6 69.2 
Liquidity  Liquid assets to total assets  36.3 36.1 22.6 28.2 29.1 19.3 
 Liquid assets to short-term 
liabilities  52.8 52.9 34.0 41.9 43.2 29.1 
 Customer deposits to total 
(non-interbank) loans  184.6  179.8  170.7  195.1  192.8  177.4  
Sensitivity to 
market risk  Net open position in foreign 
exchange to capital  24.5 23.6 28.3 42.2 38.4 19.6 
Source:  CBL. 
 
66 CBL (2022) , Financial Institutions ( Banks) ( Pricing) Directives . Viewed  at : 
https://www.centralbank.or g.ls/images/Public_Awareness/Press_Release/PRESS_STATEMENT_OF_BANK_PRICI
NG-_AG_ -_FINAL__DRAFT_16.03.22.pdf   
67 Legal Notice No.  175 of 1989: Exchange Control Regulations.  WT/TPR/S/ 447 • Lesotho  
 
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  4.4.1.3   Insurance services  
4.75.   The insurance sector is governed by the Insurance Act , 2014, which distinguishes long -term 
(i.e. life insurance), short -term (i.e.  non-life insurance) , and micro -insurance businesses. It also 
covers insurance intermediaries such as agencies and brokers. The industry consists of 10 insurers, 
of which 6 are long-term insurers and 4 are short-term insurers. In 2021, the long -term insurance 
industry had most of its net written premiums (NWP) from life cover (59.6%), followed by 
endowment (31.2%) , and credit life (5.1%), while the short -term insurance business consists largely 
of motor and property insurance products with a combined share of 70.8% of total short -term 
insurance NWP.68 The CBL considers that , overall, the insurance industry remains sound and stable. 
The sector experienced an increase in assets, which was driven by investments made by the sector.  
4.76.   The licensing requirements did not change during the review period. To operate in Lesotho's 
insuran ce sector, insurance providers must register, have a commercial presence in the country , 
and obtain an insurance licence . Under the Insurance Act, only "public companies" are allowed to 
obtain an insurance licence. According to the authorities, there are n o composite licences allowing 
operators to engage in both banking and insurance activities. Lesotho does not maintain any 
restrictions on foreign capital. The minimum capital required is LSL  2 million.  
4.77.   On 28  May 2021, the Insurance (Registration and Licens ing Requirements for Insurers) 
Regulations, 2021 was adopted. It further clarifies the application process and requirements for 
obtaining a licence to carry on insurance or re -insurance business in Lesotho under the Insurance 
Act. It determines applicable fees and documentation requirements and also describes the review 
process by the CBL.69 Furthermore, on 26  March  2021, the Insurance (Qualification Requirements 
for Insurance Intermediaries) Notice, 2021 was published. It set up the minimum qualification 
requirements for insurance intermediaries and principal officers to conduct insurance business in 
Lesotho. It applies to insurance agents, insurance brokers, and principal officers.  
4.4.2   Telecommunications and postal services  
4.78.   The contribution of telecommunications to Lesotho's GDP has remained stable since the 
previous Review, at around 3%. Mobile telephone subscription figures fluctuated slightly 
between  2015 and 2017, before decreasing markedly in 2018 (Table  4.11). According to the 
authorities,  the decline is due to the change in the methodology of counting active telephone 
subscribers. The same factor explains the decline of mobile tele density . The authorities also note 
that adoption of the new population figures based on the 2016 Population an d Housing Census also 
played a role. Internet penetration increased steadily from 38% in 2015 to 69% in 2021.  
Table 4.11 Main ICT indicators, 2015 -21 
Indicators  March 2015 March  2016 March  2017 March  2018 March  2019 March  2020 March  2021 
Fixed telephone 
subscriptions  41,123  40,570  28,206  7,506  8 750  13,426  7,225  
Mobile telephone 
subscriptions  2,289,315  2 140,141  2,233,403  1,638,263  1,584,739  1,583,192  1,509,748  
Overall telephone 
subscriptions  2,330,438  2,180,711  2,261,609  1,645,769  1,593,489  1,596,618  1,516,973  
Fixed teledensity (%)  2 2 1 0 0 1 0 
Mobile teledensity (%)  122 114 119 82 79 79 75 
Overall teledensity 
(%) 124 116 120 82 79 80 76 
Internet subscriptions  708,463  833,532  923,407  1,126,125  1,216,308  1,365,459  1,389,524  
 
68 CBL (2022) , 2021 Financial Stability Report . Viewed  at: 
https://www.centralbank.org.ls/images/Publications/Supervision/2021_CBL_Financial_Stabi lity_Report_ -
_Internet_File_ -_HR_Singles_ -_5.07.2022.pdf . 
69 Government  Gazette  (2021) , No. 54, Vol.  66, 28  May. Viewed  at: 
https://www.centralbank.org.ls/images/Legislation/Supervision/Regulations/Insurance/Insurance_Registration
__Licensing_Requirements_Regulations_2021.pdf . WT/TPR/S/ 447 • Lesotho  
 
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  Indicators  March 2015 March  2016 March  2017 March  2018 March  2019 March  2020 March  2021 
Internet penetration 
(%) (Internet 
subscriptions per 100  
inhabitants)  38 44 46 56 61 68 69 
.. Not available . 
Source:  Bureau of Statistics. Lesotho Demographic Survey  (2011) & 2016 Population and Housing 
Census  - www.bos.gov.ls ; Bureau of Statistics. Annual National Accounts 2019 ; Data from ICT 
Household surveys conducted by Lesotho Communications Authority.  
4.79.   The telecommunications legal and institutional framework remained broadly unchanged. The 
Communications Act , 2012 remains the main legislation that regulates telecommunications, 
broadcasting , and postal services in Lesotho. The Ministry of Information, Communic ations, Science 
and Technology (MICST) is the main entity in charge of formulating and developing the legislation 
for this sector. The  Lesotho Communications Authority  (LCA) is the regulator of the 
telecommunication s sector. As such, it has supervisory roles over all aspects of telecommunications . 
The functions of the LCA include the allocation of operators' licences, the promotion of fair 
competition, approval of retail prices, management of the radio frequency spect rum, and protection 
of consumers. Under the Communications Act , 2012, all interconnection agreements require 
the LCA's approval.  
4.80.   The Government considers telecommunications as an important way to enhance social and 
economic development. However, as indicat ed in the NSDP  II, factors limiting Lesotho from reali zing 
the benefits of the digital economy include the low rate of digital literacy and high costs of developing 
ICT infrastructure, particularly in the remote mountain region. As such, the authorities' s trategic 
interventions in telecommunications seek to improve sectoral governance to facilitate the 
development of ICT facilities and infrastructure and to promote ICT literacy, with a special emphasis 
on women. Universal access to telecommunications servic es also remains another priority in the 
sector. A dedicated  Universal Access Fund is in place to ensure universal access to communications 
services (telephony, Internet access, broadcasting , and basic postal services). The fund is financed 
by the LCA, the Government , and the two network operators, E conet Telecom Lesotho (ETL)  and 
Vodacom Lesotho ( VCL).70  
4.81.   To participate in the telecommunication s market, companies (domestic or foreign) must hold 
a licence. There is no limitation on foreign capital , and domes tic and foreign companies can 
participate under the same terms.  
4.82.   As at the time of the previous Review, the two main telecommunication providers  are ETL and 
VCL. VCL is the leading mobile operator. It is a privately owned company (20% domestic and 80% 
by a foreign  private company ). It provides mobile and Internet services, but it is also eligible to 
provide fixed -line services. ETL is 30% owned by the State (and 70% by a foreign private company). 
It provides fixed and mobile telephone services, as well as Internet services.  
4.83.   In addition, there are another two licensed companies providing Internet services : LEO (Pty) 
Ltd and Comnet (Pty) Ltd. The Lesotho Electricity Company Communications  (LECC), a 
telecommunications subsidiary company of the LEC, is also licensed to provide communications 
network infrastructure, through leasing of network elements and capacity at wholesale level, to other 
licensed service providers.  
4.84.   Retail r ates are subject to the approval of the LCA according to a cost -based approach.  During 
the review period, the interconnection rate applied by providers continued to decrease, in accordance 
with the LCA's reduction programme of the interconnection rate that  was initiated in 2012. The 
interconnection rate reached LSL  0.09 per minute in 2020/2021, down from LSL  0.38 in 2014/2015.  
4.85.   In 2016, the Lesotho Communications Authority (Administrative) Rules No.  77 of 2016 were 
adopted to regulate the procedure for application of operating licences, finite resources (numbers 
and radio frequency spectrum) , and type approval of terminal telecommunications equipment. They 
further prescribe procedures on amendment, renewals, transfer, suspension, or revocation of 
 
70 The revenue to the Fund is made up of: annual contribution s of 1% of net operating income from 
licensed network operators, 25%  of LCA's  annual surplus  and Government funds . WT/TPR/S/ 447 • Lesotho  
 
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  licence s. The Rules also regulate issues such as infrastructure sharing, competition management, 
tariffs , and protection of consumers.  
4.86.   On 9 May 2023, Lesotho published its current licensing classification mechanism and related 
fees, which are provided under the Lesotho Communications Authority Licensing Classification and 
Fees Rules , 2023. The Rules prescribe the applicable categories of licences, authorization tenure , 
and related fees. Under the current rules, an operator can hold a licence to provide differ ent types 
of services regardless of the technology used (i.e.  technology neutrality).  
4.87.   The Lesotho Communications Authority (Quality of Service) Rules , 2023, which were also 
published on 9  May 2023, set the standards and parameters to which telecommunicatio ns service 
providers have to meet when providing services to consumers. In addition, the new Rules introduce 
an amendment to the penalties for non -compliance to the quality of service parameters.  
4.88.   Postal services are categorized into commercial postal (cour ier) services and public postal 
services. According to the authorities, there are currently four courier service providers and 
one public postal operator (Lesotho Post Office  (LPO) ). The LPO is a state -owned agency under the 
MICST. It has exclusive rights for the use of post office boxes and selling of postage stamps, for 
which it is under obligation to provide universal services.  
4.89.   Under the Communications Act , 2012, the LCA is mandated to grant licences to operators to 
provide commercial postal services as well as public postal services for which the LPO has not been 
given exclusive rights. The Act also instructs the LCA to develop the conditions under which the 
postal services infrastructure can be used and to implement an approval system for postal rates.  
4.90.   In 2018, the Lesotho Communications Authority (Administrative) (Amendment) Rules No.  22 
of 2018 amended some provisions of the Administrative Rules , 2016 to incorporate regulatory 
provisions that apply to the postal services. Issues covered in this amendme nt include clarification 
of global international operators' activities in Lesotho (to better determine revenue collected in 
Lesotho) and renewal of postal licence s. 
4.4.3   Transport  
4.4.3.1   Overview  
4.91.   As a landlocked country, Lesotho is completely dependent on links throug h South  Africa  for 
its connectivity. Most of Lesotho's international trade passes through the port of Durban and continue 
by rail or road.  
4.92.   The Ministry of Public Works and Transport (MPWT) is responsible for the overall transport 
sector. It is in charge of , inter alia, formulating policies, monitoring their implementation, and 
administering the institutional and legal framework. Poor road conditions and lack of transport 
infrastructure and services continue to isolate remote areas from access to financial, health , and 
education services. Lesotho's transport sector comprises road, air, rail , and inland water transport, 
of which roads represent the main mode of transport.  
4.93.   During the review period, there were no significant legislative changes in the  transport sector.  
4.4.3.2   Air transport  
4.94.   Lesotho has 43 domestic aerodromes, of which 32 are operational . Moshoeshoe  I International 
Airport (MIA) in Maseru is the main air transport gateway. Airport and airstrip infrastructure are 
maintained by the Government. Airstrips around the country are served mainly by charter flights. 
Lesotho has two local operators  (MGC Aviation and Mohahlaula Airlines ), and both currently offer 
charter services.  
4.95.   Lesotho has no national airlines company . South  Africa n Airlink continues to  be the only 
international commercial carrier operating in Lesotho. It operates direct flights only between Maseru 
and Johannesburg and has no scheduled domestic flights. U nder the bilateral air service s 
agreement  (BASA) between Lesotho and South  Africa . South  Africa n Airlink can operate without any 
restriction on capacity, frequency , and slots . WT/TPR/S/ 447 • Lesotho  
 
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  4.96.   Airport ground services are managed by South  Africa n Airways , but all personnel must be 
Lesotho nationals.  
4.97.   Air transport is mainly regulated by the Civil Aviation Act, 2008 and the Department of Civil 
Aviation (DCA) of the MPWT is the entity in charge of regulating air transport, including civil aviation, 
developing infrastructure , and licensing air transport operators. The DCA is also responsible for the 
establishm ent and maintenance of aerodromes and air navigation facilities. The Civil Aviation Act 
also provides for the development of BASAs on air transport. According to the authorities, Lesotho 
has signed BASAs  with South  Africa , the United  Arab Emirates , Qatar, and Türkiye, while the 
agreement with Rwanda is yet to be finali zed. They also note that the Government intends to 
renegotiate a number of old BASAs . Information regarding the substance of Lesotho's BASAs  was 
not available.  
4.4.3.3   Road transport  
4.98.   Lesotho's total r oad network consists of 6,906.26  km, of which 1,798.76  km are paved. The 
remainder consists of 3,830.52  km of gravel roads and 1,276.98  km of earth tracks. The road 
network continues to deteriorate due to , inter alia , extreme weather , such as flood episode s.71 
4.99.   During the period under review, the legal and institutional framework regulating road 
transport services did not undergo any significant change. The Department of Transport and Traffic 
of the MPWT is the entity responsible for developing the country's road network and for maintaining 
inter-urban roads, bridges , and footbridges. The Roads Directorate is a semi -autonomous enti ty 
operating under the MPWT. It is in charge of managing the road network, including the construction, 
upgrading , and maintenance of all roads in Lesotho.72 
4.100.   Road transport services are mainly regulated by the Road Transport Act , 1981, and by the 
Road Trans port Regulations , 2004.  
4.101.   Passenger services are mainly provided by private taxi and bus transport operators. To 
provide passenger services, operators require a public transport permit , which depends on the route 
and on the demand . Only vehicles registered i n Lesotho  are eligible for a permit. Permit applications 
must be submitted to the Road Transport Board under the MPWT. Cabotage is not generally allowed, 
except under certain circumstances where short -term permits can be issued for transport of special 
consignments.  
4.102.   The Road Transport Board controls the prices in the passenger transport segment based on 
the national transport cost per passenger.73 The Board also controls issuance of public transport 
permits. Prices for freight transports are not regulated.  
4.103.   As at the time of previous Review, a few locally registered freight transport companies were 
from South  Africa  and the rest were owned exclusively by Lesotho nationals. Freight transport by 
road also requires a permit from the Department of Traffic and Tra nsport. Permits are not 
route -specific.  
4.104.   Cross -border road freight transport into SACU  members  is carried out under a 
SACU  cross-border permit. The permit is issued by the Department of Traffic and Transport. This 
permit authorizes the carriage of goods on any cross -border journey in the SACU region.  
4.4.3.4   Railways and water transport  
4.105.   Lesotho's railways consist of a 2.5 km rail line between Maseru Bridge Border and Maseru 
Station. The station facilities are owned by the Government, but they are leased, operated , and 
 
71 Government of Lesotho, National Strategic Development Plan II, 2018/19 -2022/23 . Viewed  at: 
https://www.gov.ls/wp -content/uploads/2021/06/National -Strategic -Development -Plan-II-2018-19-2022-
23.pdf . 
72 Roads Directorate Act of 2010 (Act No.  16 of 2010) , published in the Government Gazette  on 
1 January  2010. 
73 The Road Transport Board includes the Traffic Commissioner and representatives of passenger and 
freight transport operators.  WT/TPR/S/ 447 • Lesotho  
 
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  maintained by the South  Africa n rail company, Transnet. Two freight trains run daily and there has 
been no regular passe nger service since 1989.  
4.106.   Water transport  in Lesotho consists  of 39 inland river crossings located in the mountainous 
areas. Water transport services providers consist of public and private -owned small rowing boats.  
4.4.4   Tourism  
4.107.   The NDSP  II recogni zes the impor tance of tourism in leveraging the country's touristic 
potential to contribute to growth. The Government considers the sector as key for growth and job 
creation. Between 2016 -19, tourism arrival fluctuated but remained high. The authorities indicate 
that t here were no arrival s recorded in 2020 due to the closure of borders in the context of COVID -19 
restrictions. However, arrivals resumed in 2021 and 2022 (Table  4.12). South  Africa , Zambia , and 
the United  States  are the top countries of origin. The sector's  contribution to GDP remains marginal 
and its performance is subdued due to several factors, including its high dependence on  the 
South  Africa n market, which further exacerbates its vulnerability.  
Table 4.12 Tourist arrivals by country of origin, 2016 -22 
Market  2016  2017  2018  2019  2020  2021  2022  
South  Africa  1,081,227  1,009,856  1,056,433  1,009,982  0 249,349  489,780  
Zimbabwe  20,835  20,991  20,407  23,228  0 5,734  9,436  
China  6,878  7,830  6,099  7,971  0 2,571  3,122  
United  States  10,026  8,589  8,732  9,239  0 1,642  3,639  
Botswana  8,972  7,513  6,916  8,791  0 1,585  3,166  
United  Kingdom  4,970  5,554  4,880  5,724  0 704 2,218  
India 4,389  4,745  3,614  4,950  0 2,425  3,892  
Netherlands  7,856  9,275  8,840  8,177  0 323 1,775  
Germany  7,955  8,913  9,477  8,957  0 558 1,717  
Eswatini  5,006  3,930  4,897  5,439  0 962 1,750  
Other  38,100  49,970  42,353  49,923  0 12,788  30,675  
Total 1,196,214  1,137,166  1,172,648  1,142,381  0 278,641  541,134  
Source:  Lesotho Tourism Development Corporation  (LTDC),  Annual Arrivals and Accommodations Report ; 
and information provided by the authorities.  
4.108.   The authorities note that the tourism sector's performance is undermined by, inter alia, 
limited access to finance, insufficient infrastructure development and maintenance, limited tourism 
brand management and communication s, lack of policy and regulatory frameworks, and low -quality 
standards and services.74 
4.109.   A National Tourism Master Plan was develope d in 2019. It envisages seven strategic actions: 
(i) ensure an appropriate institutional and legal framework; (ii) improve visitors' experience; 
(iii) improve and expand the product base; (iv) provide the necessary infrastructure; (v) marketing 
and brandin g of the destination; (vi) create a favourable business and investment climate , and 
(vii) ensure environmental and social sustainability.  
4.110.   As at the time of the previous Review, the sector is regulated through the Accommodation, 
Catering and Tourism Enterpr ises Act , 199775 and its Regulations, and the Tourism Act , 2002 (as 
amended), which establishe d the Lesotho Tourism Development Corporation  (LTDC) .76 Other 
relevant legal instruments include the Historical Monuments, Relics, Fauna and Flora Act 1967, the 
Casinos Order 1989, the Liquor Licensing Act 1998, and the Environment Act 2001.  
4.111.   The institutional framework did not undergo any major change since the previous Review. 
Tourism development is under the responsibility of the Ministry of Tourism, Environment and Culture 
(MTEC) and the LTDC. The MTEC is in charge  of, inter alia, developing and implementing the tourism 
policies and legislation and issuing tourism licences and Environment Impact Assessment (EIA) 
 
74 Government of Lesotho, National Strategic Development Plan II, 2018/19 -2022/23 . Viewed  at: 
https://www.gov.ls/wp -content/uploads/2021/06/National -Strategic -Development -Plan-II-2018-19-2022-
23.pdf . 
75 Accommodation, Catering and Tou rism Enterprises Act , 1997 (Act No.  13 of 1997) , published in the 
Government Gazette  on 30  December  1997.  
76 Tourism Act 2002 (Act No.  4 of 2002) , published in the Government Gazette  on 26  February  2002.  WT/TPR/S/ 447 • Lesotho  
 
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  clearances. Its functions include promot ing tourism and investment in this sector, develop ing 
strategic marketing, creat ing touristic products and circuits , and provid ing financial assistance.77 
Several private -sector associations are also in place to defend the interests of their members. 
In 2021, an umbrella organi zation for the tourism sector, the Lesotho Council for Tour ism (LCT), 
was established. The members of the Board include representatives of all the tourism subsector 
organi zations from accommodation, tour operation, tour guiding, hiking, travel agents, recreational 
parks, event organi zers, restaurant owners, crafte rs, and heritage and wildlife conservations.  
4.112.   Licensing procedures also remained unchanged during the review period. They are governed 
by the Accommodation, Catering and Tourism Enterprises Act , 1997, which provides domestic and 
foreign individuals with the same access to the tourism sector, subject to a licence approved by the 
Tourism Licensing Board. The Board members include representatives of the MTEC, Ministry of 
Health, the LTDC, and the Commissioner of Police; as well as of different tourism associati ons. 
The Act establishes 11  types of licences for ( i) camp sites ; (ii) hotels ; (iii) lodges ; (iv) restaurants ; 
(v) self-catering establishments ; (vi) bed and breakfasts ; (vii) youth hostels ; (vii) resorts ; 
(ix) motels ; (x) catering ; and ( xi) guest house licences.78 Prior to the approval of a licence, the 
Ministr y of Health, the police, and the Maseru City Council must inspect the facilities of the business 
to be considered for a licence and submit inspection reports to the Licensing Board.79 Licence s are 
valid for one  year and are renewable.  
4.113.   The authorities note that Lesotho has seen noticeable growth and transformation of its 
tourism sector as more tourism facilities continue to be established by local investors, notably in the 
accommodation segment . There are no barriers to foreign entry in tourism, and tourism operators 
can benefit from general investment incentives.  
  
 
77 Tourism Act , 2002, Articles  3 and 4 . 
78 Accommodation, Catering and Tourism Enterprises Act , 1997, Article  14. 
79 Accommodation, Catering and Tourism Enterprises Act , 1997, Articles  17 and 20 . WT/TPR/S/ 447 • Lesotho  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise imports by HS section/chapter/subheading, 2014 -21 
  2014  2015  2016  2017  2018  2019  2020  2021  
Total imports  
(USD  million)  1,423.7  1,409.6  1,485.3  2,065.6  1,624.6  1,364.3  1,280.6  1,667.9  
 (% of total)  
1-Live animals and 
products  5.2 4.1 3.9 3.8 4.0 3.6 4.0 3.8 
HS 02 Meat and 
edible meat offal  3.0 2.3 2.1 1.9 2.2 1.9 2.3 2.3 
2-Vegetable products  6.8 6.9 11.4 6.8 5.8 9.0 7.5 6.7 
HS 11 Products of 
the milling 
industry; malt; 
starches; inulin; 
wheat gluten  3.0 3.1 5.5 2.3 1.8 3.4 3.1 2.7 
HS 10 Cereals  1.4 1.3 2.8 2.3 1.4 2.4 1.3 1.1 
3-Fats and oils  1.2 0.9 0.8 0.7 0.8 0.8 0.8 0.9 
4-Prepared food, 
beverages and tobacco  7.4 8.4 8.1 7.2 8.6 11.5 9.9 9.4 
HS 22 Beverages, 
spirits and vinegar  1.1 2.0 1.8 1.7 2.1 3.3 2.1 2.2 
HS 24 Tobacco and 
manufactured 
tobacco substitutes  1.0 1.5 1.4 1.3 1.4 1.8 2.3 1.8 
HS 19 Preparations 
of cereals, flour, 
starch or milk; 
pastrycooks' 
products  1.4 1.1 1.1 1.0 1.2 1.4 1.4 1.4 
5-Mineral products  15.7 14.2 11.1 18.8 14.2 14.6 11.9 14.5 
HS 27 Mineral fuels, 
mineral oils and 
products of their 
distillation; 
bituminous 
substances; mineral 
waxes  15.0 13.5 9.9 17.8 13.4 13.8 11.2 13.6 
HS 2710 
Petroleum oils 
and oils obtained 
from bituminous 
minerals, other 
than crude  8.9 10.6 8.6 7.4 10.5 12.3 8.1 9.9 
6-Chemicals and 
products thereof  7.2 7.6 8.5 6.3 6.9 6.7 9.1 7.5 
HS 30 
Pharmaceutical 
products  1.3 1.8 3.3 2.2 2.2 2.7 4.0 2.4 
7-Plastics and rubber  5.8 4.1 3.0 2.3 3.0 2.6 2.8 3.0 
8-Raw hides and skins; 
leather, furskins  and 
articles thereof  0.5 1.4 1.1 0.4 0.6 0.8 0.6 0.8 
9-Wood, cork, straw  1.2 1.2 1.3 1.0 1.4 0.7 1.2 1.5 
10-Pulp of wood; paper 
and paperboard  2.5 2.5 2.4 2.0 2.4 2.7 2.0 2.1 
11-Textiles and textile 
articles  15.1 21.5 19.0 16.9 20.3 18.5 20.1 21.6 
HS 60 Knitted or 
crocheted fabrics  3.3 6.8 5.4 5.5 6.4 6.1 7.4 7.8 
HS 54 Man -made 
filaments; strip and 
the like of man -
made textile 
materials  0.8 3.1 3.0 2.3 3.1 2.8 3.0 3.9 
HS 52 Cotton  4.0 5.9 5.0 4.6 5.4 4.6 4.2 3.4 
12-Footwear, headgear, 
etc. 1.3 1.4 1.4 1.2 1.6 1.4 1.4 1.5 
13-Articles of stone, 
plaster, cement  0.9 0.8 0.9 0.7 0.9 0.8 0.8 0.9 
14-Precious stones and 
metals  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
15-Base metals and 
articles thereof  4.8 4.1 4.0 14.4 4.7 3.6 4.1 5.4 
16-Machinery, electrical 
equipment  10.6 10.7 11.7 9.7 14.0 13.3 12.1 11.5 WT/TPR/S/ 447 • Lesotho  
 
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    2014  2015  2016  2017  2018  2019  2020  2021  
HS 85 Electrical 
machinery and 
equipment and 
parts thereof  3.2 5.5 6.2 5.3 7.0 6.0 6.1 6.4 
HS 84 Machinery 
and mechanical 
appliances; parts 
thereof  7.4 5.2 5.5 4.4 7.0 7.3 6.0 5.1 
17-Transport 
equipment  10.3 6.9 8.2 5.5 7.8 6.9 5.3 5.4 
HS 87 Vehicles 
other than railway 
or tramway rolling - 
stock, and parts 
and accessories 
thereof  10.2 6.9 8.2 5.4 7.7 6.8 5.3 5.3 
18-Precision equipment  1.5 0.5 0.5 0.5 0.8 0.8 4.0 0.9 
19-Arms and 
ammunition  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
20-Miscellaneous 
manufactured articles  1.8 2.6 2.5 1.9 2.3 1.7 2.2 2.5 
21-Works of art, etc.  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Other  0.2 0.2 0.1 0.1 0.0 0.1 0.1 0.1 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/ 447 • Lesotho  
 
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  Table A1. 2 Merchandise exports by HS section/chapter/subheading, 2014 -21 
 
2014  2015  2016  2017  2018  2019  2020  2021  
Total exports  
(USD  million)  818.1  603.8  638.3  673.2  882.4  646.0  837.3  948.5  
 (% of total)  
1-Live animals and 
products  0.1 0.3 0.4 0.7 0.5 0.7 0.5 0.6 
2-Vegetable products  0.6 0.8 2.9 2.4 1.1 1.6 1.4 1.5 
3-Fats and oils  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 
4-Prepared food, 
beverages and tobacco  8.4 8.5 1.2 1.0 8.5 1.0 8.1 9.3 
5-Mineral products  0.1 0.4 0.3 0.4 0.2 0.3 0.2 0.2 
6-Chemicals and products 
thereof  0.1 0.2 0.3 0.3 0.2 0.4 0.4 0.3 
7-Plastics and rubber  0.1 0.1 0.1 0.2 0.2 0.4 0.2 0.2 
8-Raw hides and skins; 
leather, furskins and 
articles thereof  0.4 0.4 1.4 0.0 0.0 0.1 0.0 0.1 
9-Wood, cork, straw  0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 
10-Pulp of wood; paper 
and paperboard  0.3 0.6 0.7 0.8 0.7 0.6 0.3 0.5 
11-Textiles and textile 
articles  38.4 48.9 75.1 78.0 62.3 67.3 50.3 59.1 
HS 61 and HS 62 
Articles of apparel and 
clothing accessories  33.2 39.5 64.9 66.5 54.3 57.4 41.0 47.3 
HS 51 Wool, fine or 
coarse animal hair; 
horsehair yarn and 
woven fabric  2.9 6.2 5.2 5.6 1.9 3.6 4.7 5.0 
12-Footwear, headgear, 
etc. 0.8 1.6 1.9 1.7 1.2 1.2 0.8 0.8 
13-Articles of stone, 
plaster, cement  0.1 0.0 0.0 0.1 0.1 0.1 0.1 0.1 
14-Precious stones and 
metals  46.1 30.5 0.0 0.0 15.6 17.2 31.8 18.5 
HS 71 Precious or 
semi- precious stones  46.1 30.5 0.0 0.0 15.6 17.2 31.8 18.5 
HS 7102 Diamonds  0.0 0.0 0.0 0.0 15.6 17.2 31.8 18.5 
HS 7105 Dust and 
powder of natural or 
synthetic precious or 
semi-precious stones  46.1 30.5 0.0 0.0 0.0 0.0 0.0 0.0 
15-Base metals and 
articles thereof  0.3 0.4 0.6 0.3 0.2 0.4 0.2 0.2 
16-Machinery, electrical 
equipment  3.3 4.5 9.3 9.9 8.1 7.9 5.1 7.3 
17-Transport equipment  0.5 1.1 2.1 0.9 0.8 0.6 0.4 1.0 
18-Precision equipment  0.1 0.0 0.1 0.1 0.1 0.1 0.0 0.1 
19-Arms and ammunition  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
20-Miscellaneous 
manufactured articles  0.3 1.6 3.5 3.1 0.2 0.0 0.1 0.1 
21-Works of art, etc.  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Other  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/ 447 • Lesotho  
 
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  Table A1. 3 Merchandise imports by origin, 2014 -21 
 
2014  2015  2016  2017  2018  2019  2020  2021  
Total imports  
(USD  million)  1,423.7  1,409.6  1,485.3  2,065.6  1,624.6  1,364.3  1,280.6  1,667.9  
 (% of total)  
Americas  1.4 0.5 0.6 0.6 0.5 0.2 0.3 0.6 
United  States  1.4 0.4 0.4 0.4 0.5 0.1 0.3 0.5 
Other America  0.0 0.0 0.2 0.2 0.1 0.0 0.0 0.1 
Europe  1.4 1.3 1.8 1.0 1.7 1.7 1.8 1.9 
EU-27 0.9 1.0 1.3 0.6 1.3 1.3 1.6 1.7 
Belgium  0.0 0.3 0.2 0.2 0.1 0.1 0.1 0.4 
Germany  0.1 0.2 0.1 0.1 0.5 0.0 0.5 0.4 
Netherlands  0.2 0.2 0.2 0.1 0.1 0.2 0.2 0.2 
Italy 0.1 0.1 0.5 0.0 0.1 0.1 0.3 0.2 
EFTA 0.3 0.2 0.1 0.0 0.0 0.0 0.0 0.0 
Other Europe  0.2 0.1 0.3 0.3 0.4 0.3 0.2 0.2 
United  Kingdom  0.2 0.1 0.3 0.2 0.2 0.1 0.1 0.1 
Commonwealth of 
Independent States 
(CIS)a 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Africa  81.8 76.9 78.2 72.3 71.1 78.4 72.6 77.0 
South  Africa  80.8 74.7 76.6 70.7 69.2 76.9 71.0 74.9 
Zambia  0.3 1.2 0.9 0.7 1.0 0.7 0.9 0.6 
Mozambique  0.3 0.2 0.0 0.0 0.4 0.1 0.2 0.5 
Zimbabwe  0.1 0.3 0.2 0.5 0.3 0.3 0.2 0.3 
Eswatini  0.0 0.1 0.2 0.0 0.0 0.2 0.2 0.2 
Ghana  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 
Middle East  0.3 0.6 1.1 0.2 0.4 0.1 3.3 0.7 
United  Arab Emirates  0.2 0.5 0.9 0.1 0.2 0.1 3.3 0.6 
Asia 15.1 20.7 18.4 25.9 18.4 19.6 21.8 19.3 
China  2.9 5.2 4.9 14.8 6.1 6.2 6.6 8.6 
Japan  1.5 1.7 1.2 1.6 2.0 1.8 1.8 1.4 
Other Asia  10.8 13.9 12.3 9.4 10.4 11.6 13.3 9.3 
Chinese  Taipei  7.1 8.3 6.7 5.3 6.3 6.1 6.2 5.7 
India 1.6 2.2 2.9 2.5 2.1 2.6 3.8 1.4 
Hong Kong,  China  1.0 1.3 1.2 0.7 0.6 1.1 1.5 0.8 
Viet Nam 0.6 1.3 0.6 0.5 0.5 0.4 0.7 0.7 
Pakistan  0.2 0.4 0.5 0.2 0.5 0.6 0.5 0.2 
Thailand  0.1 0.3 0.2 0.1 0.1 0.1 0.2 0.1 
Korea, Republic of  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 
Other  0.0 0.0 0.0 0.0 7.9 0.0 0.3 0.6 
Memo:          
EU-28 1.1 1.1 1.6 0.9 1.4 1.5 1.7 1.8 
SACU  80.9 74.8 76.8 70.8 69.2 77.2 71.2 75.1 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/ 447 • Lesotho  
 
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  Table A1. 4 Merchandise exports by destination, 2014 -21 
 
2014  2015  2016  2017  2018  2019  2020  2021  
Total exports (USD  million)  818.1  603.8  638.3  673.2  882.4  646.0  837.3  948.5  
 (% of total)  
Americas  30.4 29.5 46.0 46.4 33.9 39.0 28.0 31.1 
United  States  30.3 29.0 45.1 45.5 33.4 38.1 27.0 30.2 
Other America  0.1 0.5 0.8 0.9 0.5 0.9 1.0 0.9 
Canada  0.1 0.4 0.7 0.8 0.5 0.6 0.5 0.6 
Mexico  0.0 0.0 0.1 0.0 0.0 0.3 0.5 0.2 
Europe  46.2 30.7 0.7 1.1 16.3 18.3 33.0 19.6 
EU-27 46.1 30.7 0.6 1.0 16.2 18.1 32.9 19.4 
Belgium  46.1 30.5 0.0 0.0 15.6 17.2 31.8 18.5 
Germany  0.0 0.2 0.5 0.9 0.6 0.8 1.0 0.8 
EFTA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Other Europe  0.1 0.0 0.1 0.1 0.1 0.2 0.1 0.2 
United  Kingdom  0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.1 
North  Macedonia  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Serbia  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Commonwealth of Independent 
States (CIS)a 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Africa  23.2 28.3 52.4 51.9 41.6 39.2 38.3 46.8 
South  Africa  23.0 27.7 49.7 49.2 40.1 37.4 37.0 44.9 
Eswatini  0.1 0.3 1.3 1.7 0.8 1.1 0.8 1.1 
Botswana  0.0 0.1 0.3 0.3 0.2 0.4 0.3 0.3 
Egypt  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 
Mauritius  0.0 0.2 0.2 0.2 0.1 0.1 0.0 0.1 
Tanzania  0.0 0.0 0.1 0.0 0.1 0.2 0.1 0.1 
Mozambique  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Ethiopia  0.0 0.0 0.1 0.0 0.0 0.0 0.1 0.0 
Middle East  0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 
Asia 0.2 0.3 0.8 0.6 0.7 3.4 0.6 0.4 
China  0.0 0.0 0.1 0.0 0.2 2.7 0.1 0.0 
Japan  0.1 0.0 0.0 0.1 0.0 0.0 0.0 0.1 
Other Asia  0.1 0.3 0.7 0.5 0.5 0.6 0.5 0.3 
Bangladesh  0.0 0.0 0.2 0.0 0.1 0.0 0.1 0.1 
Chinese  Taipei  0.0 0.0 0.1 0.1 0.1 0.1 0.0 0.1 
New Zealand  0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 
Australia  0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 
Other  0.0 11.1 0.0 0.0 7.4 0.0 0.0 2.1 
Memo:          
EU-28 46.2 30.7 0.7 1.1 16.3 18.3 33.0 19.5 
SACU  23.1 28.1 51.4 51.2 41.2 38.9 38.1 46.2 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  