1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

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L E S O T H O p e rcent of the wage bill during the initial training period for a n ew ly established manufacturing company. – A compre h e n s i ve export finance facility to support export e r s with working capital on concessionary cre d i t s . – Loan guarantees for loan finance provided to clients of the LNDC by other financial institutions. – Loan finance from the LNDC to projects which can demonstrate long-term viability. – Equity participation in strategic projects by the LNDC, in the absence of a private inve s t o r, or in partnership with local i nve s t o r s . – Manu f a c t u rers re c e i ve a full rebate on imported raw materials or components for use solely in the processing or m a nufacturing of goods for the export marke t . – Provision of serviced industrial plots, customised or specialised factories and commercial and residential pro p e rt i e s for lease. E x p o rt Incentive s Lesotho has an Export Finance Scheme, enabling exports to compete better in world marke t s .The main components of this scheme are : – Credit guarantee scheme - the exporters’ bank applies fo r e x p o rt finance on behalf of its client, to obtain credit guarantee f rom the LNDC. – Pre-shipment credit scheme - finances exporters wo r k i n g c apital needs on the basis of confirmed export ord e r s . – Post-shipment credit scheme - a loan which enables the e x p o rter to start a new manufacturing cycle from the day of shipment until payment from the fo reign buyer is re c e i ve d , a l l owing companies to offer favourable credit terms to their c u s t o m e r s . – Refinance arrangement - a re-lending facility granted by the Central Bank of Lesotho to commercial banks to prov i d e e x p o rters with concessionary export finance. – Counter-guarantee arrangement - the Central Bank assumes 95 percent of the risk associated with guarantees issued by the L N D C. – Central Export Development Fund - the latter two a rrangements re c e i ve financial backing from the Central Export D evelopment Fund which is organised on a revolving basis.T h e fund is managed by the Central Bank of Lesotho. Trade A g reements Lesotho is a signatory to a number of trade agreements with various countries: – EU: The Lomé Convention facilitates duty-free access to consumers in the EU for goods wholly produced in Lesotho, o r whose value-added content satisfies the criteria. – SAC U : Access to the markets of Namibia, South A f r i c a , B o t swana and Swaziland is mostly duty-fre e, although some i m p o rt restrictions do exist to protect infant industries. – USA, J ap a n , C a n a d a , Australia and New Zealand: T h e Generalised System of Pre fe rences (GSP) scheme provides fo r d u t y - f ree and quota-free entry for certain pro d u c t s . – SADC: Lesotho enjoys concessionary access to the marke t s of the SADC member states. Ta x a t i o n The corporate tax rate is 15 perc e n t . No withholding tax on dividends distributed by manufacturing companies to local or fo reign share h o l d e r s . Double tax avoidance treaties with South A f r i c a ,M a u r i t i u s ,the USA and the UK. The maximum individual tax rate is 35 perc e n t .GST is curre n t ly at 10 perc e n t . It is envisaged that the country will move to a Value A dded Tax (VAT) in the near future. Institutions invo l ved in Investment Promotion Established in 1992, the Lesotho Investment Promotion Centre is a division of the LNDC, which is a 90 percent gove r n m e n t - owned parastatal, with the remaining 10 percent owned by the German Finance Company for Investments in Deve l o p i n g C o u n t r i e s .The Investment Promotion Centre promotes the f l ow of fo reign direct investment into Lesotho, and further acts as a “one-stop” centre to assist investors during the pre- and p o s t - i nvestment period, e g to obtain the necessary ap p rov a l s and licences to start up their business and to obtain wo r k , residence and other permits necessary to operate a business in L e s o t h o. The Trade Promotion Unit, another gove r n m e n t a g e n c y, p romotes Lesotho’s goods wo r l d w i d e. It offe r s m a r ke t i n g ,technical and management assistance to investors as well as a series of trade advisory serv i c e s , and prov i d e s i n formation and publicity. I nvestment Code While no investment code as such exists in Lesotho, i n c e n t i ve s available to investors are all set out in legislation and the rights of investors are protected by the constitution of Lesotho. P rotection of Inve s t m e n t Lesotho is a signatory to the convention on the settlement of i nvestment disputes between states and nationals of other s t a t e s . This convention allows for fo reign investors to gain international jurisdiction of the International Centre for the Settlement of Investment Disputes (ICSID) in the event of legal disputes concerning investment in Lesotho. Lesotho is also a member of MIGA. I N V E S TM E N T O P P O R T U N I T I E S A N D P R O J E C T S O p p o rt u n i t i e s I nvestment opportunities promoted in Lesotho include: Clothing and blanket manu f a c t u re, a g ro - i n d u s t r i e s ,f u r n i t u re and fo o t wear pro d u c t i o n . In response to the growing demand for consumer electronics in the SADC re g i o n ,e s p e c i a l ly since the democratisation pro c e s s in South A f r i c a ,Lesotho intends to expand its production base into these products to cap t u re this emerging marke t , t a k i n g advantage of the sector’s labour intensity and the high p roductivity rates and cost effe c t i veness of the country ’s labour fo rc e. Strategic partners with the fo l l owing attributes are re q u i re d : technical know - h ow ; financial strength and management know - h ow to produce TV sets, video cassette re c o rd e r s , electric stove s , re f r i g e r a t o r s , m i c row ave ove n s , washing machines and drye r s , and telecommu n i c a t i o n s e q u i p m e n t . F u rt h e r m o re, t h e re is a wide range of potential projects in the m a nu f a c t u r i n g ,construction and services sector connected to the LHWP. 36
L E S O T H O L E S OT H O :P ROJECTS FOR POTENTIAL INVESTMENT Sector P ro j e c t D e s c r i p t i o n R e q u i red i nvestment in USDm Construction Tunnel boring For phase 1B of the Lesotho Highlands Project. - t e c h n o l o gy / e q u i p m e n t Roads Roads rehabilitation and maintenance. - Hotels Project A 150 bedroom luxury hotel and a Lakeland Marina with river cruising operations at the Lesotho Highlands Pro j e c t . - Health Care Health care equipment Health care equipment in addition to consulting Services engineering services for rehabilitation of rural hospitals. - Manufacturing Maluti Oil and Cake Production of sunflower oil. 0.9 Mills (Pty) Ltd Rockwool,basalt wool, Lesotho is in an excellent position to beneficiate basalt and delerite, 15.0 mineral wool into the production of high quality rockwool for insulation, a p roduct which is largely being imported from Europe at the moment. Ceramic products Prospects exists for use of the local clays for the production of 6.5 ceramic products - sanitary ware, stone-ware utensils,glazed advertising slabs.Strategic investors to form joint-venture with local investors required,with requisite managerial and technical k n ow h ow and financial stre n g t h . Wool and Mohair Lesotho intends to process the locally produced wool and mohair 6.0 (2000 tons and 400 tons per annum respectively). International investors with technical knowhow, finance, management and m a r keting capability are being sought. Bottled Mineral Water Lesotho’s “white-gold” water, is poised to be one of the major 4.0 export commodity. Preliminary tests of this potential indicate that mineral water bottling operations can be established,with an estimated output of 30,000 litres per day. Strategic investor partners are being sought with financial strength, management and marketing skills and technical know - h ow. Tourism Katse Peninsula A hotel complex with chalets to be located at Katse Dam, the 50.0 highest dam in Africa and part of the Lesotho Highlands Project. Investors with proven record in hotel catering and management are being sought;to invest either on their own or to enter into joint ve n t u res with local inve s t o r s . Ha Lejone Island The lodge will be situated 60km from the Katse dam at Lejone 20.0 L o d g e valley overlooking the Malibamatso Bridge and the Katse Intake Towe r. Mphorosana Lodge Another tourist development comprising 30 rooms and 20 chalets 30.0 and Chalets within the Highlands Water Development A re a . Mahlasela Ski-Lodge Upgrading of existing skiing facilities to international standard. Snow-making and grooming technology will be employed. Investors with requisite experience required for this valuable facility for tourists and ski enthusiastis - Marakabei Lodge Investment sought an already existing Tourist Lodge Complex providing accommodation meals re c re a t i o n ,sight seeing etc. - S o u rc e :Lesotho <strong>National</strong> Development Corporation (<strong>1998</strong>) 37
Page 1 and 2: 1998 SOUTHERN AFRICA ECONOMIC SUMMI
Page 3 and 4: CONTENTS I N D E X Abbreviations 2
Page 5 and 6: THE SADC FINANCE AND INVESTMENT SEC
Page 7 and 8: c u rre n t ly exists in SADC gover
Page 9 and 10: REGIONAL MAC RO-ECONOMIC HIGHLIGHTS
Page 11 and 12: Southern Africa and Competitive n e
Page 13 and 14: had agreed to accept the general fr
Page 15 and 16: A NG OL A of GDP in 1996. E x p o r
Page 17 and 18: A NG OL A Projects for Possible Inv
Page 19 and 20: A recent event in the political sce
Page 21 and 22: B O T S WA N A B OT S WANA STOCK MA
Page 23 and 24: B O T S WA N A P rotection of Inve
Page 25 and 26: scheduled for 23 May 1998. Eight po
Page 27: L E S O T H O The money market is d
Page 31 and 32: p a r l i a m e n t a ry elections,
Page 33 and 34: M a l awi Stock Exchange The stock
Page 35 and 36: M A L AW I I nvestment Code The Inv
Page 37 and 38: M A L AW I S TAT I S T I C S(USDm u
Page 39 and 40: M au r i t i u s c o u n t ry is se
Page 41 and 42: M au r i t i u s Mauritian Investme
Page 43 and 44: M au r i t i u s Ta x a t i o n Tax
Page 45 and 46: c u rre n t ly holds 129 seats in P
Page 47 and 48: M O Z A M B IQ U E combined with a
Page 49 and 50: The current status of the project i
Page 51 and 52: M O Z A M B IQ U E dermersal fish f
Page 53 and 54: After talks between the South Afric
Page 55 and 56: N A M I B I A Namibia does not impo
Page 57 and 58: N A M I B I A I nvestment Code A c
Page 59 and 60: Johannesburg Stock Exchange. G E N
Page 61 and 62: S O U T H A F RI C A that some East
Page 63 and 64: S O U TH A F R I C A cities of Joha
Page 65 and 66: S O U TH A F R I C A INDUSTRIAL FIN
Page 67 and 68: S O U T H A F R I C A * M a c h i n
Page 69 and 70: p rocessing industries,t e x t i l
Page 71 and 72: S WA Z I L A N D Swaziland Stock Ma
Page 73 and 74: S WA Z I L A N D The Ministry of En
Page 75 and 76: Snow capped peaks of Kilimanjaro. G
Page 77 and 78: TA N Z A N I A exchange rate, the s
Page 79 and 80:
TA N Z A N I A S TATISTICS (USDm, u
Page 81 and 82:
Z A M B I A the supply of water for
Page 83 and 84:
Z A M B I A Fo reign Tr a d e Zambi
Page 85 and 86:
Z A M B I A Other institutions incl
Page 87 and 88:
Victoria Falls. G E N E R A L I N F
Page 89 and 90:
Z I M BA BW E Z i m b a b we Stock
Page 91 and 92:
Z I M BA BW E - No restrictions on
Page 93 and 94:
LIST OF SOURCES S o u rces containi
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1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

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