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Lesotho in limbo after signing free trade pact


Jan. 22, 2021 2 min read

2 min read


LESOTHO will have to wait for Botswana to ratify the African Continental Free Trade Agreement (AfCFTA) in order to start trading under the new agreement.

This is despite the official launch of the ambitious continental free trade agreement, which was signed by 54 of Africa’s 55 states on January 1.

Sources within the Ministry of Trade and Industry have told Metro that not much can be said about the existing opportunities under the agreement at the moment because Botswana has not yet signed.

“We have to wait for Botswana to ratify before we can think of all the existing opportunities. All the five members of the Southern African Customs Union (SACU) region have to ratify the agreement before we can collectively think of opportunities,” the source said last week.

This means in effect that all SACU members need to ratify the AfCFTA before any of the members can start trading under the pact.  

SACU is made up of five countries including Lesotho, South Africa, Eswatini, Botswana and Namibia.

The other four members have already ratified the agreement.

This treaty is set to create a tariff-free, single market for all of Africa’s 1.3 billion people.

Implementation of the free trade agreement had to be postponed by six months due to delays related to COVID-19 lockdowns, which resulted in closed borders and travel restrictions.

According to the World Bank, the agreement presents a major opportunity for African countries to bring 30 million people out of extreme poverty and to raise the income of 68 million others who live in less than $5.50 per day.

“With the implementation of AfCFTA, trade facilitation measures that cut red tape and simplify customs procedures would drive $292 billion of the $450 billion in potential income gains. The implementation would help usher in the kinds of deep reforms necessary to enhance long term growth in African countries,” the World Bank has projected.


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The agreement will create the largest free trade area in the world measured by the number of countries participating. The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$ 3.4 trillion.

Full implementation would reshape markets and economies across the region and boost output in the services, manufacturing and natural resources sectors.

Lesotho, like other countries is expected to take advantage of the agreement as the country moves towards boosting its subdued economy.

Exports particularly in manufacturing are likely to increase, thereby creating employment as well as boosting wages for both skilled and unskilled workers.

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