April 22, 2022


2 min read

Foreign investment drops 6%

Foreign investment drops 6%

The Minister of Trade and Industry, Dr Thabiso Molapo

Story highlights

    Tough economy troubles SACU
    Flow declined by 16 percent from $47 billion in 2019 to $40 billion in 2020

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LESOTHO’s foreign direct investment (FDI) has plummeted from $118 million in 2019 to $102 million 2020, a six percent decrease year-on-year.

Already faced with tough economic conditions, the Minister of Trade and Industry,  Dr Thabiso Molapo told the Southern African Customs Union (SACU) Investment Round Table held in Botswana last week that the private sector and SACU should continue working together to strengthen the business relations and linkages even outside the platform.

“We note with great concern that for most countries, the COVID-19 crises have caused a dramatic decline in foreign direct investment and Lesotho is no exception,” he said.

According to the United Nations Conference on Trade and Development (UNCTAD) world investment report of 2021, global foreign direct investment flows dropped by 35 percent from $1.5 trillion in 2019 to $1 trillion in 2020.

In the case of Africa, the flow declined by 16 percent from $47 billion in 2019 to $40 billion in 2020.

“This is a major concern because international investment flows are vital for sustainable development in the poorer regions of the world,” said the report.

“Increasing investment to support a sustainable and inclusive recovery from the pandemic is now a global policy priority. This entails promoting investment in infrastructure and the energy transition, in resilience and in health care.”

It said it was evident that the COVID-19 pandemic continued to have a persistent and multifaceted negative impact on cross border investment at national, regional and global level.

Its severity is way more than the global financial crises which occurred a decade ago.

Dr Molapo said the refocused SACU work programme therefore could have not come at an opportune time providing direction for the region towards the recovery trajectory.

“The private sector should take full advantage of investment opportunities that exist within the SACU region to boost trade investment flows thereby achieving economic gains,” he said. 

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“Such opportunities should serve as enablers for private sector participation in various value chains leading to industrialisation in reflective countries”.  

Furthermore, Dr Molapo said the importance of the prioritised sectors in the SACU Round Table could not be overemphasised, more so, that they resonated well with Lesotho economic and development agenda as highlighted in our National Strategic Development Plan II (NSDP II).

“The successful implementation of the SACU work programme will enable Lesotho to meet the targets as laid out in the NSDP II, thus emphasising the importance of the work programme for Lesotho,” he said.

“It therefore goes without saying how critical the success of this work programme is for Lesotho.”

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