Le­sotho should seize trade op­por­tu­nity

Lesotho Times - - Leader -

LE­SOTHO and five other south­ern African na­tions last Fri­day signed an Eco­nomic Part­ner­ship Agree­ment (EPA) with the Eu­ro­pean Union (EU) last Fri­day in Botswana af­ter ne­go­ti­a­tions dragged on for 10 years. Apart from Le­sotho, the SADC EPA group also in­cludes Botswana, Mozam­bique, Namibia, South Africa and Swazi­land.

The EPA guar­an­tees the coun­tries duty-free, quotafree ac­cess to the Eu­ro­pean mar­ket un­der con­di­tions sim­i­lar to the African Growth and Op­por­tu­nity Act (AGOA) among other pro­vi­sions. Trade and In­dus­try Min­is­ter Joshua Setipa signed the agree­ment along with his SADC EPA col­leagues, while EU Com­mis­sioner for Trade Ce­cilia Malm­ström rep­re­sented the 28-na­tion bloc.

Among the mer­its of the agree­ment, which comes into force in Oc­to­ber, is that it pro­vides for a num­ber of pro­tec­tive mea­sures, for in­stance for nascent, frag­ile in­dus­tries or for food se­cu­rity rea­sons.

Al­ready many eco­nomic com­men­ta­tors across the re­gion are hail­ing the agree­ment as a boon for their coun­tries, es­pe­cially in light of dwin­dling South­ern Africa Cus­toms Union (SACU) rev­enues. For his part, Mr Setipa yes­ter­day said the EPA was pre­dictable and not sus­cep­ti­ble to uni­lat­eral de­ci­sions by one party among other ad­van­tages.

This was in ref­er­ence to the United States’ African Growth and Op­por­tu­nity Act (AGOA) which also pro­vides trade pref­er­ences to Le­sotho and other el­i­gi­ble African coun­tries. AGOA ob­li­gates the Amer­i­can pres­i­dent to des­ig­nate coun­tries el­i­gi­ble to ben­e­fit from the trade fa­cil­ity on an an­nual ba­sis af­ter un­der­go­ing a re­view process.

How­ever, the US gov­ern­ment has al­ready ex­pressed “se­ri­ous con­cerns” about the Le­sotho gov­ern­ment’s al­leged fail­ure to ad­here to AGOA gov­er­nance cri­te­ria, with the re­newal of the fa­cil­ity now up in the air.

Mr Setipa also said the tex­tile, food can­ning and di­a­mond in­dus­tries among oth­ers stood to ben­e­fit from the EPA. Le­sotho also has an op­por­tu­nity to ben­e­fit from tech­ni­cal as­sis­tance from the EU to sup­port the growth of pro­duc­tion in our in­dus­tries.

In her re­marks dur­ing the sign­ing cer­e­mony in Botswana, Ms Malm­ström echoed the min­is­ter’s up­beat sen­ti­ment, say­ing the EPA had “enor­mous po­ten­tial” to im­prove peo­ple’s lives all across the re­gion by con­nect­ing peo­ple to the global econ­omy. How­ever, she was also keen to stress that it could only do that if all the coun­tries worked to­gether to turn op­por­tu­ni­ties into re­al­i­ties.

With­out an at­trac­tive busi­ness en­vi­ron­ment, said Ms Malm­ström, the SADC EPA would not be able to take up the op­por­tu­ni­ties the agree­ment pro­vides. She said the fa­cil­ity needed the right poli­cies to al­low en­trepreneur­ship to flour­ish, adding that these cov­ered ev­ery­thing from in­dus­try pol­icy, stream­lined cus­toms, to poli­cies that pro­mote in­vest­ment.

We are in to­tal agree­ment with Ms Malm­ström’s re­marks. Le­sotho needs to cre­ate an at­trac­tive busi­ness en­vi­ron­ment in order to ac­crue the ben­e­fits of the agree­ment. Oth­er­wise it will be­come an­other ex­am­ple of missed op­por­tu­ni­ties.

With­out ad­dress­ing is­sues that the pri­vate sec­tor is con­tin­u­ally com­plain­ing about, among them lack of skilled man­power, po­lit­i­cal in­sta­bil­ity and a pol­icy frame­work that does not fos­ter the growth of bud­ding in­dus­tries, the ben­e­fits of the agree­ment may yet again elude us.

We can no longer af­ford to rest on your lau­rels and let op­por­tu­ni­ties to de­velop and di­ver­sify this na­tion’s econ­omy pass us by. The gov­ern­ment and lo­cal busi­nesses should also bear in mind that other re­gions, such as east and West Africa, are get­ting sim­i­lar deals, which will in turn present in­tense com­pe­ti­tion.

Turn­ing our back on AGOA would also be ill-ad­vised be­cause we need all the pref­er­en­tial trade fa­cil­i­ties we can get. Af­ter all, there is no wis­dom in putting all our eggs in one bas­ket given the volatile global eco­nomic en­vi­ron­ment.

Po­lit­i­cal pos­tur­ing should be the last thing on our pri­or­ity list given all the so­cio-eco­nomic chal­lenges Le­sotho is fac­ing as a re­sult of poverty. The gov­ern­ment and Ba­sotho in gen­eral should get to work.

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