Resource information
This policy note assesses the potential
of foreign direct investment (FDI) to diversify Lesotho s
exports. Lesotho must preserve capacity to produce more and
better goods, seek new markets, preserve existing
manufacturing jobs, undertake structural and institutional
reforms, and take advantage of its location inside South
Africa. Given the low savings in the country, as well as
major fiscal challenges arising from declines in SACU
revenues which leave fewer resources for public investments,
and most crucially the need for international
entrepreneurial know-how, the prospects for growth in new
sectors will depend on the country s ability to attract new
foreign direct investments, particularly from South Africa.
This note also addresses the policy and structural
constraints that must be overcome to attract FDI.
