Foreign investment needed

The IMF announced last month that it would provide support to Lesotho through a poverty reduction and growth facility programme. The new programme makes provision for a loan of about US $19 million from October 2000 to October 2003, the Economist Intelligence Unit (EIU) said in its latest update this week. According to the EIU, the medium-term objective of the programme is to achiever economic growth of at least 4 percent a year, which would increase real gross domestic product by about 1 percent per year. “To achieve this it is recognised that priority must be given to attracting further foreign investment,” said the EIU. The IMF programme entails a number of targets, which include limited government financing of the budget from domestic and non-concessional sources and maintaining foreign exchange reserves. The EIU noted that the main focus for recovery in the manufacturing sector continues to be in textiles. Quoting the Lesotho National Development Corporation (LNDC), the EIU said that this sub-sector accounted for 15,000 of 23,000 jobs created by foreign companies currently in Lesotho. In January Mpho Malie, the trade and industry minister, said that more than US $190 million in textile investments could be expected in the next few years. “To cater for this the government will need to provide funds to improve the infrastructure, including the establishment of new industrial sites,” the EIU said. The EIU added that a recent report by the Netherlands-based Centre for Research on Multinational Corporations showed that workers were frequently exploited by low wages, sometimes below the statutory minimum, and forced to work long hours with “inadequate” attention to health and safety.