One prominent budget analyst, Dr Ratjomose Machema says there is pressing need for a comprehensive investment policy and legal framework to bolster foreign direct investment (FDI) in Lesotho.
Speaking on the alarming decline in development assistance over the years, he emphasized the critical role that a well-structured investment strategy could play in revitalizing the nation’s economy.
Statistics reveal a worrying trend, with development assistance plunging significantly between 2010 and 2020. Meanwhile, foreign direct investment has experienced volatility, with peaks that underscore the necessity for a more consistent and strategic approach.
“To navigate these challenging economic waters, we must create a robust policy environment that not only attracts but retains foreign investors,” Dr. Machema stated.
Lesotho currently ranks among the lowest in the Southern African Development Community (SADC) regarding innovation and investment promotion, trailing behind more established economies such as South Africa.
While Lesotho can compete based on cheaper labour, this advantage alone is insufficient to attract sustainable investment.
“We lack the diverse offerings that investors seek in more developed markets. It is imperative that we identify and develop unique areas for investment,” Dr. Machema noted.
Dr. Machema’s insights resonate deeply within the context of a global economy that increasingly favours nations with clear, strategic investment frameworks. “Countries that have successfully attracted foreign investment often have well-defined policies and legal protections for investors, which significantly mitigate the perceived risks,” he explained.
The analyst urged the Lesotho government to consider a multi-faceted approach in its policymaking, incorporating elements that promote innovation, technology transfer, and skill development among the local population.
“Building capacity within our workforce will not only enhance our competitiveness but also attract more diverse types of investment,” he added.
Source: Lesotho News Agency (20/2/2025)
