‘Govt’s fo­cus on strate­gic part­ner­ships’

Lesotho Times - - Business -

LE­SOTHO is cur­rently on a drive to se­cure more ex­ter­nal mar­kets for its prod­ucts and Turkey has been iden­ti­fied as a po­ten­tial trad­ing part­ner.

Last week at the Turkey-africa Eco­nomic and Busi­ness Forum, Le­sotho through the Min­is­ter of Trade and In­dus­try Joshua Setipa, inked an Eco­nomic Co­op­er­a­tion Agree­ment with the Turk­ish gov­ern­ment to­wards real­is­ing the goal of di­ver­si­fy­ing its mar­kets.

Le­sotho Times re­porter Bereng Mpaki (LT) spoke to Mr Setipa (JS) to find out more about the deal and how it will ben­e­fit the two coun­tries. Below are ex­cerpts of the in­ter­view.

LT: What in­flu­enced the sign­ing of the Eco­nomic Co­op­er­a­tion Agree­ment with Turkey?

JS: We em­barked on a process of iden­ti­fy­ing coun­tries all over the world that could ben­e­fit our coun­try through strate­gic part­ner­ships.

That does not mean we are not happy with our cur­rent trad­ing part­ners.

We are sim­ply say­ing that as we seek to di­ver­sify our prod­ucts, we should also di­ver­sify our mar­kets, be­cause there is al­ways a dan­ger in con­cen­trat­ing on one mar­ket be­cause when things go wrong in that mar­ket, we will have prob­lems.

We ex­pe­ri­enced that when the USA had a re­ces­sion in 2008 and their or­ders were re­duced sig­nif­i­cantly re­sult­ing in job losses in Le­sotho. So, to min­i­mize risks like that, we have to ex­pand our mar­ket.

We have iden­ti­fied a num­ber of coun­tries, among them, Ar­gentina, Turkey, In­dia, China, Chile and South Korea. We re­alised the need to put in place strate­gic part­ner­ships that would al­low us to pur­sue a whole range of eco­nomic ob­jec­tives.

So, the Eco­nomic Co­op­er­a­tion Agree­ment that we have signed with Turkey is one such agree­ment. We are also propos­ing sim­i­lar ar­range­ments with the other coun­tries we iden­ti­fied. We are also in­ter­ested in Nige­ria be­cause of its po­ten­tial as a source of in­vest­ment and mar­ket for our prod­ucts.

LT: What does the agree­ment en­com­pass? JS: The agree­ment stip­u­lates a num­ber of ar­eas for co­op­er­a­tion. For ex­am­ple, we be­lieve that we will ben­e­fit on is­sues like stan­dards in ad­di­tion to mar­ket ac­cess and fa­cil­i­tat­ing in­vest­ment.

It will en­able us to build re­la­tion­ships that will fa­cil­i­tate col­lab­o­ra­tion be­tween Turk­ish in­vestors and Le­sotho en­trepreneurs in or­der to get them to set up busi­ness ven­tures lo­cally or else­where for the ben­e­fit of both sides.

Turkey is one coun­try that has achieved eco­nomic growth on the ba­sis of small and medium en­ter­prises. For in­stance, our leather sec­tor which has so much po­ten­tial could ben­e­fit from Turk­ish sup­port as they could build the in­dus­try and also em­power Ba­sotho.

Turkey is also the home of An­gora goats. Le­sotho and South Africa pro­duce a com­bined 61 per­cent of the world’s mo­hair and so by work­ing with Turkey, we could im­prove the qual­ity and vol­ume of our mo­hair pro­duce.

We want to use the agree­ment to drive part­ner­ships and as a re­sult we had some mem­bers of the lo­cal pri­vate sec­tor in our del­e­ga­tion and they got an op­por­tu­nity to talk to po­ten­tial Turk­ish part­ners.

So, we want to fa­cil­i­tate such trade mis­sions and we agreed with my Turk­ish coun­ter­part that a trade del­e­ga­tion from that coun­try would visit Le­sotho be­fore the end of the first quar­ter of 2017 in or­der to take this agree­ment for­ward.

We are also work­ing on open­ing trade rep­re­sen­ta­tion agencies in both coun­tries.

The agree­ment also calls for the es­tab­lish­ment of a bi-na­tional com­mis­sion which will meet once ev­ery two years with the ob­jec­tive of as­sess­ing per­for­mance and en­sur­ing that the ob­jec­tives of the agree­ment are ful­filled.

They also have a sig­nif­i­cant in­ter­est in in­fra­struc­ture de­vel­op­ment. Turkey has some of the largest con­struc­tion and en­gi­neer­ing com­pa­nies in the world, and if you go to Rus­sia, their in­fras­truc­tural de­vel­op­ment mar­ket is dom­i­nated by Turk­ish Com­pa­nies. So they are keen to come to Le­sotho.

The agree­ment also per­mits Turk­ish fi­nanc­ing in­sti­tu­tions such as the Turk­ish Exim Bank to fi­nance projects in Le­sotho.

LT: What sort of in­fra­struc­ture do we re­quire?

JS: Turk­ish com­pa­nies are into dif­fer­ent types of in­fra­struc­ture in­clud­ing roads and air­ports.

LT: Will they fi­nance pri­vate or pub­lic projects? JS: If a Turk­ish and a Le­sotho com­pany en­ter into an agree­ment to build a con­fer­ence fa­cil­ity, they could fi­nance the project through the Exim Bank of Turkey which charges much more com­pet­i­tive rates than our com­mer­cial banks.

LT: Do you feel that Le­sotho has the ca­pac­ity to par­tic­i­pate mean­ing­fully in this eco­nomic agree­ment with Turkey?

JS: We still have chal­lenges in terms of ca­pac­ity to trade and this is why the agree­ment is im­por­tant be­cause Turkey is go­ing to help us to build our ca­pac­ity to trade. The tech­ni­cal as­sis­tance con­tained in the agree­ment will help us sup­port our small and medium com­pa­nies to trade. So we need that sup­port to be able to grow our own en­ter­prises.

LT: Le­sotho is part of the Eco­nomic Part­ner­ship Agree­ment be­tween African states and the Euro­pean Union. How does this agree­ment with Turkey dif­fer from the EPA?

JS: With EPA, Le­sotho is viewed as part of a wider group of coun­tries in the agree­ment. How­ever, this one is more di­rect and much eas­ier to im­ple­ment be­cause we will be deal­ing di­rectly with each other and not with ten other coun­tries.

Turkey is a de­vel­op­ing coun­try and some of their ex­pe­ri­ences are very rel­e­vant to our own ex­pe­ri­ences. That makes it eas­ier for us to re­late to their way of do­ing things be­cause they are also a de­vel­op­ing coun­try.

LT: How does this agree­ment af­fect al­ready ex­ist­ing agree­ments with other coun­tries or re­gions?

JS: It does not af­fect them as they are dif­fer­ent agree­ments with dif­fer­ent terms and con­di­tions.

LT: What is the next step to­wards op­er­a­tional­is­ing the agree­ment fol­low­ing last week’s sign­ing?

JS: The next step is to work out a strat­egy as Ba­sotho on how to fully ex­ploit this op­por­tu­nity.

One of my im­me­di­ate tasks is to en­gage the pri­vate sec­tor to start iden­ti­fy­ing ar­eas of in­ter­est that they can pur­sue with Turk­ish busi­nesses.

LT: Is there a time frame for this agree­ment?

JS: It is a re­view­able agree­ment, which will be as­sessed ev­ery two years and its ex­pan­sion or ter­mi­na­tion will be a mu­tual de­ci­sion.

Min­is­ter of trade and in­dus­try Joshua setipa and his turk­ish coun­ter­part af­ter sign­ing the eco­nomic Co­op­er­a­tion Agree­ment be­tween Le­sotho and turkey.

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