World Bank approves $13.4 million in additional finance
WASHINGTON, March 24, 2017 - The Government of Lesotho’s efforts to promote private sector led growth and job creation got a boost following the approval of $13.4 million in additional financing support by the World Bank Board of Executive Directors. This support will help improve the business environment for firms, strengthen select government institutions, and further diversify the economy.
The additional financing for the Second Private Sector Competitiveness and Economic Diversification Project (PSCEDP II) will help improve the business environment through the continued facilitation of reforms to reduce the time and cost associated with doing business in Lesotho, provide easier access to finance, make trading across borders simpler, and provide streamlined, accessible, and efficient government to business services in order to attract private investment and boost growth.
“We are pleased to provide additional support to this important project which will help the Government of Lesotho’s efforts to promote private sector-led economic growth and job creation in line with the World Bank’s goals to reduce poverty and promote shared prosperity for the poorest people in the world,” said Paul Noumba Um, the World Bank Country Director for Lesotho.
While the reform agenda underpins private sector growth, PSCEDPII also works to further economic diversification through continued support of the handicrafts and commercial fruit tree sectors. For the latter, the goal is to build out the value chain and catalyze private sector efforts to scale up production, thus providing significant local employment and business opportunities.
This Additional Financing will also support a more efficient investment promotion and property management agency that can more effectively attract and retain investment. In line with this, the project will pilot a linkages program between small firms and large ones, and fund the construction of a Tourism and Handicraft Information Center that can serve as a reference point and retail center for tourists and locals.
Under PSCEDP II Lesotho improved its business environment, particularly with regards to access to credit. Lesotho’s Doing Business ranking jumped by 12 spots to number 100 in 2017, largely due to the credit bureau supported under the project and now covering over 7% of the adult population.
In addition, initiatives to boost private sector diversification have also yielded positive results with the deciduous fruit farm which serves as the hub for horticulture expansion earning a GLOBALG.A.P. certification and having begun to export apples, plums, peaches and apricots.
The project also financed administrative support to the Lesotho Enterprise Assistance Program (LEAP) which has offered business development support to more than 130 micro, small, and medium enterprises (MSMEs). Moving forward, LEAP will offer funding for equipment in addition to business development support, deepening the impact of the program.
The funds are provided under the International Development Association (IDA)*, the World Bank’s fund for the World’s poorest countries.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $19 billion over the last three years, with about 50 percent going to Africa.
