…could this translate to Lesotho’s economic growth?
To address the persistently high unemployment rate in Lesotho, the Minister of Trade and Industry implemented significant regulatory changes that effectively made business registrations nearly free. This initiative follows a bold declaration by Deputy Prime Minister Justice Nthomeng Majara, who, in her capacity as acting Prime Minister, declared youth unemployment a state of emergency.
Our request for information from the Ministry revealed that by July 31, almost one month post-implementation of the new licensing procedures, an impressive 3,505 businesses had been registered. This surge represents a dramatic increase compared to the typical figures the Ministry usually records. Notably, many of these newly registered enterprises fall within the supplies sector and the informal business category.
Despite the impressive number of formal registrations, there is growing concern about the tangible impact of this initiative on the national economy. Many individuals capitalising on the opportunity for free registration, the Ministry said, are already engaged in business activities but are taking steps to formalise their operations. This brings into question whether the influx of registered businesses will genuinely contribute to sustainable economic growth and job creation.
In this new landscape aimed at revitalising the business environment, the Maseru district has emerged as a leader in business registrations, amassing 2,535 of the total new businesses. Following Maseru is Leribe, with 352 registrations. This data reflects a strong commitment among Basotho to combat unemployment by creating job opportunities for themselves and their communities.
However, amid these positive developments, several critical questions remain unanswered: Do these newly registered businesses possess adequate startup capital?
Do the entrepreneurs have the necessary formal business training?
Are there grants or funding opportunities available to assist these businesses in overcoming the challenges posed by high unemployment rates?
In response to these inquiries, the Ministry highlighted the role of the Business Enterprises Development Corporation (BEDCO), which was established to provide support for Basotho-owned businesses through formal business training. BEDCO, the Ministry stated, is prepared to fulfil its mandate of assisting both new and existing businesses.
Additionally, the Ministry mentioned the Competitiveness and Financial Inclusion (CAFI) project which includes the Lesotho Enterprises Assistant Programme (LEAP). This initiative aims to support established businesses by providing essential training to business owners and aiding in the purchase of necessary supplies such as machinery needed for operation.
The Ministry also has under its programmes the Entrepreneurship Hub and Start Financing Facility designed to assist newly established businesses or active enterprises seeking to grow. This facility provides seed funding that can be used as initial capital for startups or as expansion financing for businesses already in operation.
The Ministry reassured the populace that comprehensive measures have been put in place to assist both new traders and existing business owners who are looking to formalise their businesses and expand their operations.
In a conversation with The Lesotho Tribune, one beneficiary of these newly implemented business registration processes shared their positive experience with the Ministry.
As a founder and director of his business, the beneficiary described the visit to the Ministry’s offices, which were bustling with individuals waiting to formalise their businesses. Remarkably, he said he completed the registration process in about 30 minutes, experiencing no hidden costs throughout the procedure.
This anecdote highlights not only the efficiency of the new registration process but also the hopeful atmosphere surrounding the business landscape in Lesotho as entrepreneurs like this one embrace the opportunity to formalise their operations and contribute to economic growth.
