VZCZCXRO8786
RR RUEHMR
DE RUEHMR #0448/01 3650846
ZNR UUUUU ZZH
R 310846Z DEC 09
FM AMEMBASSY MASERU
TO RUCPDOC/USDOC WASHINGTON DC
RUCPCIM/CIMS NTDB WASHDC
RUEHC/SECSTATE WASHDC 4528
INFO RUEHMR/AMEMBASSY MASERU 4963

UNCLAS SECTION 01 OF 11 MASERU 000448 
 
SIPDIS 
 
STATE FOR EB/IFD/OIA; 
TREASURY FOR DO/JWALLACE 
COMMERCE FOR ITA/JKOZLOWICKI 
USTR FOR JKALLMER 
OPIC FOR RO'SULLIVAN 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ETRD ELAB KTDB PGOV USTR OPIC LT
SUBJECT: LESOTHO:  2010 INVESTMENT CLIMATE STATEMENT 
 
REF: STATE 124006 
 
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Summary 
 
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¶1. Embassy Maseru submits the following information for 
Lesotho's 2010 Investment Climate Statement. Lesotho is open to 
foreign direct investment (FDI) and views FDI as a means to 
drive growth, improve international competitiveness, and obtain 
access to foreign markets. Virtually all business sectors are 
open to foreign investors. No government approval is required, 
and there are almost no restrictions on the form or extent of 
foreign investment.. Most investment currently originates from 
East Asia, and is primarily channeled into export-oriented 
manufacturing, specifically textiles and apparel for the U.S. 
market. Lesotho's investment climate is favorable with regards 
to currency conversion, monetary transfer policies, and lack of 
undue burdens to investors. The main weakness of the investment 
climate is an under-developed legal framework for investors and 
the need for land reform. Lesotho has maintained an inviting 
posture with regards to FDI overall. 
 
 
 
------------------------------ 
 
Openness to Foreign Investment 
 
------------------------------ 
 
 
 
¶2. Lesotho is largely open to FDI and views FDI as a means to 
drive growth, improve international competitiveness, and obtain 
access to foreign markets. Virtually all business sectors are 
open to foreign investors. No government approval is required, 
and there are almost no restrictions on the form or extent of 
foreign investment. However, the country's FDI policy and legal 
framework are not well developed enough to enhance transparency 
and consistency. Lesotho has been more successful than most 
other least-developed countries in attracting FDI - 
predominantly export-oriented investment. Foreign investors in 
the apparel industry have created new jobs, particularly for 
females, and contributed to poverty reduction. Current business 
taxation regulations only partially address investor needs 
because they predominantly favor investment in manufacturing. 
The Government of Lesotho (GOL) is under pressure to revise 
relevant laws affecting investors in various sectors. 
 
 
 
¶3. The Lesotho National Development Corporation (LNDC), the main 
parastatal of the Government of Lesotho, which falls under the 
Ministry of Trade and Industry, Cooperatives and Marketing, is 
charged with implementation of the country's industrial 
development policies. LNDC provides assistance to foreign 
investors; publishes information on investment opportunities and 
services it offers to foreign investors. It also offers 
incentives, assistance with work permits, and logistical support 
for relocation. These can be viewed on its website: 
http://www.lndc.org.ls. 
 
 
 
¶4. Ninety percent of FDI flows into export-oriented 
manufacturing. FDI in manufacturing alone created 45,000 jobs in 
2008; however, employment in the sector has declined to 36,000 
jobs in 2009 due to the global economic meltdown. The single 
largest investment is believed to be around $90 million in 
capital infrastructure by the Taiwanese Nien Hsing Group. 
Lesotho's export-oriented FDI gives it an advantage that needs 
to be built on. Foreign firms in Lesotho are highly concentrated 
in a very narrow range of products such as knit apparel and 
jeans. Foreign affiliates have also invested small amounts in 
footwear, electrical products, electronics, television assembly, 
food processing, and other manufacturing products such as 
plastics and umbrellas. 
 
 
 
¶5. The telecommunications sector in Lesotho has also attracted 
FDI. The consortium of ESKOM Zimbabwe's Econet Wireless 
 
MASERU 00000448  002 OF 011 
 
 
International and Mauritius Telecom have a 70% share of Lesotho 
Telecom. Lesotho has a high penetration of telephony relative to 
per capita income. Such services have been extensively 
modernized and expanded in recent years. 
 
 
 
¶6. FDI in air transportation has not been successful. Lesotho 
Airways is now managed and handled by South African Airways for 
flights from Maseru to Johannesburg, and tourism has not been 
exploited, especially in activities aimed at protecting the 
natural environment and ecological attractions. 
 
 
 
¶7. FDI in diamond mining has been revived by the reopening of 
three commercial diamond mines, namely Lets'eng Diamonds, 
Liqhobong, and Kao diamond mines. Lets'eng Diamonds is a 
partnership between a South African-owned company and GOL. The 
mine employs about 70 people, 90% of whom are Lesotho nationals. 
Liqhobong and Kao diamond mines are partnerships between GOL and 
a European and Gibraltan mining company respectively. Operations 
at these mines were suspended at the end of 2008 due to falling 
rough diamond prices.  Four other mines, namely Mothae, 
Motse-Tsoeu, Lemphane and Kolo, are being prospected at 
different parts of  the country. In its attempt to attract FDI 
to the mining industry, the GOL has offered a number of 
concessions, including VAT exemptions on inputs used during 
construction, and exemptions from withholding taxes on dividends 
and interest payments. In return, GOL is granted 8% of gross 
sales royalties and a share of dividends due to its equity 
shareholding in the three mines. GOL has 30% equity shareholding 
in Lets'eng Diamonds, 25% in the Liqhobong diamond mine and 7% 
in the Kao Diamond Mine with provision for this to increase by 
13% to 20% if GOL decides to have a larger stake in the company. 
Three laws: the Mines and Minerals Act (2005); the Precious 
Stones Order (1970); and the Mine Safety Act (1981), provide a 
regulatory framework for the mining industry. 
 
 
 
¶8. Generally, the GOL continues to recognize the need for the 
Kingdom to be competitive in regional and international markets. 
To achieve this goal, the government has embarked on structural 
reforms that aim at improving the investment climate. 
Initiatives include private sector competitiveness programs 
under the Millennium Challenge Corporation and the World Bank, 
as well as modernizing customs processes through technical 
assistance from the USAID Southern Africa Global Competitiveness 
Hub. Specific activities include modernizing bank payment 
systems; introducing national ID's; creating credit facility for 
manufacturers; and modernizing land tenure systems. Customs 
processes will include minimizing the number of procedures 
required to clear consignments, both for export and import 
clearance purposes. 
 
 
 
¶9. The Ministry of Trade and Industry also introduced a "One 
Stop Shop" where all services required for the issuance of 
licenses, permits, imports, and exports clearances are housed 
under one roof. This has reduced the number of days to start a 
business from 92 days to 30 days. The Ministry is committed to 
developing this facility further to increase efficiency and 
expedite the procedures and processes needed to compete in the 
exporting business. Developments will extend to simplifying and 
expediting the issuance of work and residence permits to reduce 
the turnaround time. 
 
 
 
 
 
¶10. Measure              Year     Index/Ranking 
 
TI Corruption Index       2009     89 (out of 180) 
 
Heritage Economic Freedom 2009     49.7 (151 out of 179) 
 
World Bank Doing Business 2010     130 (out of 183) 
 
MCC Govt Effectiveness   2009      81% 
 
MCC Rule of Law           2009      90% 
 
MCC Control of Corruption 2009      92% 
 
MASERU 00000448  003 OF 011 
 
 
 
MCC Fiscal Policy        2009      88% 
 
MCC Trade Policy        2009     20% 
 
MCC Regulatory Quality   2009     52% 
 
MCC Business Start Up     2009     67% 
 
MCC Land Rights Access  2009     55% 
 
MCC Natural Resource Mgt 2009     11% 
 
 
 
------------------------------- 
 
The Origin of Foreign Investors 
 
------------------------------- 
 
 
 
¶11. Lesotho's apparel sector is entirely East Asian and South 
African-owned and currently employs about 36,000 people. Two 
factories are under Taiwanese ownership, two are owned by Hong 
Kong, one is Singapore-owned, and eight are owned by South 
African firms. South African FDI is present in footwear 
factories, four electronic firms, Sun Hotels, air travel, 
insurance and telecommunications, financial services, and mining. 
 
 
 
¶12. Lesotho's performance in attracting FDI has been creditable 
by regional standards. It is commendable that the bulk of FDI is 
channeled into the manufacturing sector and most of that 
investment goes into export activity. FDI entry in business and 
consumer services is now restricted in the case of small scale 
retail and personal services businesses. No foreign ownership or 
even board directorship by a non citizen is permitted at any 
level in these restricted businesses. However, there are 
foreign-owned small retail businesses which were established 
before the present restrictions. These restrictions on 
small-scale services and manufacturing businesses are 
instruments of immigration control. Lesotho is sensitive to the 
entry of small business owner-operators from abroad, especially 
from China and West Africa. If such businesses were established, 
this would officially be perceived as an unwelcome level of 
economic migration. 
 
 
 
¶13. Many trading businesses and all substantial manufacturing 
businesses are open to FDI. Nevertheless the relevant trading or 
industry license is required and must be renewed annually. 
 
 
 
¶14. In most aspects of "normal business," foreign investors are 
on an equal footing with Basotho investors. An exception is the 
prohibition on ownership of land lease titles by foreign 
investors. Lesotho has no legal provisions that discriminate 
among home countries. It is a member of SADC, but this does not 
lead to preferential treatment for investors from these 
countries. 
 
 
 
¶15. Lesotho's standards of treatment and protection of specific 
interest to foreign investors are good in practice, but the 
legal framework guaranteeing these norms is weakly developed. 
There is no foreign investment law. Bilateral Investment 
Treaties (BITs) have been concluded with only two countries, the 
United Kingdom in 1981, and Germany in 1985. 
 
 
 
-------------------------------- 
 
Conversion and Transfer Policies 
 
-------------------------------- 
 
 
 
¶16. Lesotho has traditional foreign exchange controls but is 
 
MASERU 00000448  004 OF 011 
 
 
also controlled by its membership in the Southern Africa Common 
Monetary Area (CMA). The CMA is comprised of Lesotho, Namibia, 
South Africa and Swaziland. Under the CMA the South African rand 
is legal tender in Lesotho. Under CMA rules the loti should be 
exchanged at par with the rand and the rand/loti peg must be 
maintained. Lesotho must hold reserves in rand and other foreign 
currencies. There are no exchange controls between Lesotho and 
South Africa but CMA members agree to have exchange controls 
with third parties. 
 
 
 
¶17. Lesotho has partly liberalized the capital account. Controls 
on the current account were abolished in 1998 while limited 
controls on the capital account were adopted in 1993. 
 
 
 
¶18. Commercial banks have been delegated authority to undertake 
current account transactions and Lesotho acceded to Article VIII 
of the International Monetary Fund. However dividends payments 
still require Central Bank approval. The Central Bank maintains 
direct power of approval over foreign exchange requirements for 
all capital account transactions including FDI, capital 
disinvestment, and contracting and servicing offshore debt. 
There has never been a case of blockage of such transfers, and 
shortages of foreign exchange that could lead to blockage are 
highly unlikely given net international reserves of $1 billion 
in 2008, which is equivalent to eight months of import cover. 
Lesotho is a member of the Southern African Common Policy on 
approval of foreign loans. However policies on foreign borrowing 
are not strongly developed on the grounds that there is little 
foreign borrowing by resident businesses. The Central Bank and 
the Lesotho National Development Corporation (LNDC) monitor 
international capital inflows. 
 
 
 
¶19. There are no restrictions on converting or transferring 
funds associated with an investment into a freely usable 
currency and at a legal market clearing rate. However, for loan 
repayments an investor needs to notify the bank at the beginning 
of an investment that the capital for that investment is a loan, 
they also need to disclose the terms of the loan. The current 
average delay period  for remitting investment returns such as 
dividends, return of capital, interest and principal on private 
foreign debt, lease payments, royalties and management fees 
through normal, legal channels is two days, provided the 
investor has submitted all the necessary documentation related 
to the remittance. 
 
 
 
------------------------------ 
 
Expropriation and Compensation 
 
------------------------------ 
 
 
 
¶20. The constitution provides that the acquisition of private 
property by the state can only occur for specified public 
purposes. Further, the law provides for full and prompt 
compensation. Affected persons may appeal to the High Court as 
to whether the action is legal and compensation is adequate. The 
constitution is silent as to whether compensation may be paid 
abroad in the case of a non-resident. 
 
 
 
¶21. In one incident, mining companies filed a case against the 
Lesotho Water Highlands Project, alleging that the plaintiff 
companies hold mineral lease rights located within the 
geographic area of land that was inundated as a result of the 
construction of Katse Dam. The companies claimed that the said 
rights have been unlawfully expropriated by the GOL without any 
compensation. 
 
 
 
------------------ 
 
Dispute Settlement 
 
------------------ 
 
MASERU 00000448  005 OF 011 
 
 
 
 
 
¶22. Foreign investors have full and equal recourse to the 
Lesotho courts for commercial and labor disputes. Courts are 
regarded as fair and impartial in cases involving foreign 
investors. Complex commercial cases may be heard by foreign 
judges. Privatization has introduced a number of investment 
agreements and these provide for international arbitration to 
settle disputes. Under the BIT with United Kingdom, an investor 
may take a dispute with the Government to international 
arbitration. The Germany BIT is silent on this issue. 
 
 
 
¶23. Lesotho is a member of the Multilateral Investment Guarantee 
Agency and has acceded to the Convention on the Settlement of 
Investment Disputes between States and Nationals of Other States. 
 
 
 
--------------------------------------- 
 
Performance requirements and Incentives 
 
--------------------------------------- 
 
 
 
¶24. There are no incentives for and no performance requirements 
imposed specifically on foreign investors as a condition of 
investment. However, there are a number of financial incentives 
available to manufacturing companies establishing themselves in 
Lesotho, such as unimpeded access to foreign exchange, export 
finance facility, and long-term loans. 
 
 
 
¶25. The Lesotho tax system also heavily favors investment in 
manufacturing. Corporate income generated from exporting 
manufactured goods outside the Southern African Customs Union 
(SACU); is taxed at 0%. There is a permanent maximum 
manufacturing tax rate of 10% on profits and there is no 
withholding tax on dividends paid to non-residents from 
manufacturing profits. There is also free repatriation of 
profits derived from manufacturing companies. Corporate income 
in all other sectors is taxed at 29% and there is a further 25% 
withholding tax on non-resident dividends. There is a credit 
facility for value added tax (VAT) on imports, which provides 
input tax credit upon importation and local purchasing of raw 
materials and capital goods for manufactures. Moreover, only 
industrial buildings and mining qualify for depreciation 
allowances for taxation. Buildings for services, tourism, 
farming, etc., are not depreciable. Infrastructure such as land 
improvements and site services also do not qualify. 
 
 
 
¶26. Lesotho has double taxation agreements with the Federal 
Republic of Germany, the Republic of South Africa, Mauritius and 
the United Kingdom. 
 
 
 
-------------------------------------------- 
 
Right to Private Ownership and Establishment 
 
-------------------------------------------- 
 
 
 
¶27. Lesotho has no competition law or overall competition 
regulator. Instead, under the industrial and trading licenses 
system a business can apply for protection from competition for 
up to 10 years. 
 
 
 
----------------------------- 
 
Protection of Property Rights 
 
----------------------------- 
 
 
 
MASERU 00000448  006 OF 011 
 
 
 
¶28. Lesotho respects international intellectual property laws 
and is a member of the World Intellectual Property Organization 
and the African Intellectual Property Organization. Patents are 
rarely issued in Lesotho but trademark protection is often 
sought and granted. Intellectual property protection is 
regulated by the Industrial Property Order and the Copyright Act 
of 1989. The law protects patents, industrial designs, 
trademarks, and grant of copyright. The Law Office is 
responsible for enforcement of copyrights. 
 
 
 
------------------------------------- 
 
Transparency of the Regulatory System 
 
------------------------------------- 
 
 
 
¶29. The judicial system is fair and competent in commercial 
matters and the government is willing to supplement the bench 
with foreign judges in specialized cases. 
 
 
 
¶30. Generally there is adequate regard in the courts for equal 
treatment of foreign investors who are in dispute with national 
parties or the government. 
 
 
 
¶31. Company law is based on the Companies Act of 1967 which 
provides reasonable standards for most purposes but is believed 
to be incomplete and complex. Technical improvements were 
incorporated in a 1998 draft of a new company law and were 
circulated to stakeholders but a new law has not been introduced. 
 
 
 
¶32. The regulatory framework for utilities is modern, but it is 
outdated for mining. Lesotho mining legislation gives authority 
to grant titles to the King and Principle Chiefs upon the 
recommendation of a Mining Board. Financial services regulation 
is also up to date but the industrial and trading license system 
is archaic. Industrial licensing long ago lost its original 
purpose of protecting start-up firms from competition. Trading 
licenses are required for 44 types of business. Some enterprises 
can require up to four licenses for one location. 
 
 
 
¶33. Telecommunication: Lesotho's Telecommunications Authority is 
the sector's independent regulator. The authority sets 
conditions for entry of new competitive operators. Currently it 
allows Lesotho Telecom to maintain a monopoly for fixed-line and 
international services. 
 
 
 
¶34. Banking and other financial services: Banking regulations do 
not give power to the Central Bank to give directions as to 
interest rates, exchange rates, margins, or the spread of 
services offered. This is because of the currency peg with South 
Africa and hence Lesotho has lost its leverage on monetary 
policy. This creates a low political risk environment for 
banking investment. 
 
 
 
¶35. The Ministry of Trade and Industry also introduced a "One 
Stop Shop" where all services required for the issuance of 
licenses, permits and imports and exports clearances are housed 
under one roof. This has reduced the number of days to start a 
business from 92 days to 30 days. The Ministry is committed to 
developing this facility further to increase efficiency and 
expedite the procedures and processes needed to compete in the 
exporting business. Developments will extend to simplifying and 
expediting the issuance of work and residence permits to reduce 
the turnaround time. 
 
 
 
--------------------------------------------- ----- 
 
 
MASERU 00000448  007 OF 011 
 
 
Efficient Capital Markets and Portfolio Investment 
 
--------------------------------------------- ----- 
 
 
 
¶36. Lesotho has a small financial system that is closely tied to 
South Africa through the Common Monetary Area. There are three 
foreign-owned banks: First National Bank, Ned Bank and Standard 
Lesotho Bank, which bought a 70% share in state-owned Lesotho 
Bank. According to a recent IMF report, the banks in Lesotho are 
well capitalized and very liquid. However, credit provision is 
very low and this is going to be addressed through structural 
reforms under the private sector development component of the 
Millennium Challenge Corporation Compact which includes the 
establishment of a credit bureau. Industrial and commercial 
credit is provided by the Lesotho National Development 
Corporation (LNDC) and foreign investors are able to get credit 
on the local market. LNDC's mandate is to promote and facilitate 
foreign investment. 
 
 
 
---------------------------------------- 
 
Competition from State Owned Enterprises 
 
---------------------------------------- 
 
 
 
¶37. Lesotho privatized all state owned enterprises (SOEs) 
including telecommunications, banks, utilities, government 
transportation, and the radio airways following the adoption of 
the privatization Act of 1995. However, in 2004 the government 
established a government-owned bank which is mandated to access 
financial services to Basotho living in urban and rural areas of 
the country who do not have bank accounts. In 2008, the 
government also introduced state-owned buses in the public 
transportation sector. The SOEs senior management reports to an 
independent board of directors. They are required by law to 
publish an annual report and to submit their books to 
independent audit. 
 
 
 
¶38. Private enterprises are allowed to compete with public 
enterprises under the same terms and conditions with respect to 
access to markets, credit, and other business operations, such 
as licenses and supplies. 
 
 
 
-------------------------------- 
 
Corporate Social Responsibility 
 
-------------------------------- 
 
 
 
¶39. There is a general awareness of corporate social 
responsibility among both producers and consumers. Investors 
mostly give back to the society during the winter season and 
during the "Festive Season" around Christmas. Foreign and local 
enterprises tend to follow generally accepted corporate social 
responsibility (CRS) principles such as the OECD Guidelines for 
Multinational Enterprises. Firms who pursue CSR are viewed 
favorably by society. 
 
 
 
------------------ 
 
Political Violence 
 
------------------ 
 
 
 
¶40. Following the February 2007 general elections there were 
civil disturbances that led to a few stay-aways and protest 
rallies by opposition parties in 2008 and 2009, but there has 
not been politically-motivated damage to projects. Political 
tensions between governing and opposition parties still exist 
but the national political atmosphere is generally calm. 
 
MASERU 00000448  008 OF 011 
 
 
 
 
 
---------- 
 
Corruption 
 
---------- 
 
 
 
¶41. Investors reported that corruption is not a significant 
factor for foreign investors. Anti-corruption legislation was 
passed in 1999 and is being effectively implemented through an 
autonomous anti-corruption unit called the Directorate on 
Corruption and Economic Offences (DCEO). Lesotho signed and 
ratified the UN Anticorruption Convention in 2005 but it is not 
yet a signatory of the OECD Convention on Combating Bribery. 
 
 
 
¶42. A case from the early 1990s involving  corrupt government 
officials and bribe-paying by foreign corporations engaged in 
constructing the multimillion-dollar, World Bank-funded Lesotho 
Highlands Water Project (LHWP) was concluded recently. The 
former top Lesotho diplomat assigned to the multibillion LHWP 
and his deputy have been sentenced to ten (with five years 
suspended for three years) and six years (with eighteen months 
suspended for three years) imprisonment respectively after they 
were found guilty of accepting bribes from an international 
construction company. 
 
 
 
¶43. International nongovernmental "watchdog" organizations 
operate in the country. Lesotho ranks 89 out of 180 countries in 
Transparency International's Corruption Perceptions Index for 
¶2009. 
 
 
 
------------------------------- 
 
Bilateral Investment Agreements 
 
------------------------------- 
 
 
 
¶44. Lesotho has bilateral investment protection agreements or 
treaties with the United Kingdom and Germany which entered into 
force in 1981 and 1985 respectively. In 2004, Lesotho also 
signed a bilateral investment agreement with Switzerland, for 
the promotion and protection of investment. This agreement has 
not entered into force yet. The three agreements have already 
been posted in full on the UNCTAD website. 
 
 
 
¶45. Lesotho does not have a bilateral investment treaty or a 
bilateral taxation treaty with the U.S. and there are no 
taxation issues of concern to U.S. Investors. 
 
 
 
-------------------------------------------- 
 
OPIC and Other Investment Insurance Programs 
 
-------------------------------------------- 
 
 
 
¶46. OPIC insured one American-owned company: Seaboard 
Corporation's joint venture with Lesotho Flour Mills. Seaboard 
started operations in 1998 and currently employs about 300 
people. OPIC can encourage United States investors to consider 
exploring new investment opportunities in other sectors. The 
Mission does not have a bilateral agreement providing for OPIC 
program and does not budget for OPIC claims in its official 
budget. 
 
¶47. Lesotho is a member of the Multilateral Investment Guarantee 
Agency (MIGA). In 2000, MIGA issued guarantees to Imperial Group 
(Proprietary) Limited of South Africa for its investment in the 
partial privatization (60 %) of the government's Plant and 
 
MASERU 00000448  009 OF 011 
 
 
Vehicle Pool Service Unit. 
 
 
 
----- 
 
Labor 
 
----- 
 
 
 
¶48. Lesotho's Labor Code Order of 1992 regulates terms of 
employment and conditions and for worker health, safety, and 
welfare. It was amended in 2004 to include HIV/AIDS policies in 
the workplace. Union organization is permitted. There is a 
full-time and independent Directorate of Industrial Dispute 
Prevention and Resolution. Statutory minimum wages are fixed 
annually by the Ministry of Labor and Employment with 
recommendations from a tripartite Wages Advisory Board. Minimum 
wage setting is sensitive to the textile and garment industry's 
need to maintain competitiveness. 
 
 
 
¶49. In 2001, Lesotho ratified both the ILO Convention 182 on the 
Prohibition and Elimination of the Worst Forms of Child Labor 
and Convention 138 on the Minimum Age of Employment. The Labor 
Code Order of 1992 and its subsequent amendments are the 
principal laws governing terms and conditions of employment in 
Lesotho. 
 
 
 
¶50. The Labor Code Order of 1992 requires every non-citizen 
employee or self-employed person to have a work permit. A work 
permit is issued by the Labor Commissioner, who must be 
satisfied that no qualified Lesotho citizen is available for the 
position. The statutory maximum duration of a work permit is two 
years. 
 
 
 
------------------------------------- 
 
Foreign Trade Zones/ Free Trade Zones 
 
------------------------------------- 
 
 
 
¶51. There are no free trade zones in Lesotho. 
 
 
 
------------------------------------ 
 
Foreign Direct Investment Statistics 
 
------------------------------------ 
 
 
 
¶52. Comment: The latest Private Capital Flows (PCF) Survey 
report is for 2007. The 2008 PCF report is still being finalized 
and the Central Bank would not release the data to the post 
because it is not considered official until the Minister of 
Finance and Development Planning approves it. The 2009 survey is 
still ongoing. The compilation of PCF data currently has a one 
year lag. End comment. 
 
 
 
¶53. Lesotho's FDI statistics for 2007 are estimated as follows: 
 
 
 
FDI Stock (in Million Maloti) 700.50 
 
(in Million USD)       94.66 
 
 
 
Stock as % of GDP       6.02 
 
 
 
MASERU 00000448  010 OF 011 
 
 
 
GDP in Million USD   1,571.72 (2007 GDP at current prices) 
 
 
 
--------------------------------------------- ---------- 
 
2007 Direct Investment Capital Flows by Industry Sector 
 
--------------------------------------------- ---------- 
 
 
 
                     In millions of USD  % of GDP 
 
Mining and Quarrying          24.94       1.59 
 
Manufacturing                 34.78       2.21 
 
Building and Construction      0.32       0.02 
 
Wholesale and Retail Trade     4.93       0.31 
 
Transport and Communications  26.38       1.68 
 
Finance and Insurance          2.69       0.17 
 
Real Estate and Business       0.62       0.04 
 
Total Capital Flows           94.66       6.02 
 
 
 
--------------------------------------------- ------------ 
 
2007 Direct Investment Capital Flows by Country of Origin 
 
--------------------------------------------- ------------ 
 
 
 
                  In millions of USD   % of GDP 
 
South Africa                38.72         2.46 
 
Taiwan                       7.06         0.45 
 
Netherlands                  2.90         0.18 
 
China                        0.64         0.04 
 
United States               15.32         0.97 
 
Switzerland                  0.45         0.03 
 
Belgium                      5.26         0.33 
 
United Kingdom              24.30         1.55 
 
Total Capital Flows         94.66         6.02 
 
 
 
----------------------------- 
 
2007 Direct Investment Abroad 
 
----------------------------- 
 
 
 
Stock in Million Maloti       188.05 
 
Stock in Million USD           25.41 
 
Percentage of GDP               1.62 
 
 
 
--------------------------------------------- --- 
 
2007 Direct Investment Abroad by Industry Sector 
 
--------------------------------------------- --- 
 
 
 
MASERU 00000448  011 OF 011 
 
 
 
Sector             in M Maloti     in M USD      %GDP 
 
 
 
Manufacturing         166.93      22.56       1.44 
 
Wholesale & Retail      0.37       0.05       0.00 
 
Transport & Comm.       2.57       0.35       0.02 
 
Finance & Insurance     0.88       0.12       0.01 
 
Total Claims Abroad   188.05      25.41       1.62 
 
 
 
--------------------------------------------- ---------- 
 
2007 Direct Investment Abroad by Country of Destination 
 
--------------------------------------------- ---------- 
 
 
 
Country              in M Maloti   in M USD     % GDP 
 
 
 
South Africa            47.43     6.41        0.41 
 
Taiwan                  99.71    13.47        0.86 
 
Netherlands             39.81     5.38        0.34 
 
Switzerland              1.09     0.15        0.01 
 
Total Claims Abroad    188.05    25.41        1.62 
 
 
 
Sources: 
 
 
 
FDI: Central Bank of Lesotho; Report on Private Capital Flows 
Survey 2007 
 
 
 
GDP: Bureau of Statistics; 1998-2008 National Accounts 
Publications 
 
 
 
Exchange rate period; 2007 average 1USD = M 7.40 
POWER