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The Government of Lesotho (GoL) has received a credit of USD
8.00 million from the International Development Association
(IDA) to finance the implementation of the Support to
Private Sector Competitiveness Project (PSCP) over a five
years period (2007–2011).
The Project’s ultimate objective is to facilitate increased
growth and competitiveness of the Lesotho private sector and
to stimulate private sector development to attain high and
sustainable level of growth needed to reduce poverty and
realize the Millennium Development Goals (MDGs).
The Project Development Objective is to facilitate increased
participation of the private sector in the economy by
creating conditions for improving its productivity and
competitiveness.
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Project Description
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Project Beneficiaries and Target Groups
The project will benefit large, medium and small formal
sector and informal enterprises. It will assist the private
sector by reducing uncertainties related to the investment
climate and the high cost of doing business in Lesotho.
While most of the benefits will accrue to entrepreneurs in
the targeted sectors, other sectors will also derive
indirect benefits. The project is also expected to stimulate
formal and informal sector employment.
The horticulture out-grower scheme is targeting in the case
of tree crops, the block farming initiative (BFI); and
smallholder out-grower initiative (SOI). In the case of the
BFI, 11 farmers are expected to participate in the program
where all 11 farmers will form a single legal entity through
which they will grow and manage tree crop production. The
SOI will focus primarily on Basotho farmers with a history
of growing and managing small plots of tree crops, but
require additional on-farm technical support to bring up the
quality and production volume to commercial levels. High
value horticulture pilot will focus on a 21 hectare plot
with approximately 30 farmers who will benefit. Products
will be targeted to the following market on Table 1.
Table 1. Target Market
|
Year |
Tree Crops |
High Value Horticulture |
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1 |
Local retail market*: 0% |
Local retail market: 100% |
|
2 |
Local retail market: 50%
South African market: 50% |
Local retail market: 100% |
|
3 |
Local
retail market: 40%
South African market: 60% |
Local retail market: 80%
South African market: 20% |
|
4 |
Local retail market: 40%
South African market: 60% |
Local retail market: 70%
South African market: 30% |
|
5 |
Local retail market: 40%
South African market: 40%
Regional/EU market: 10% |
Local retail market: 50%
South African market: 40%
Regional/EU market: 10% |
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* Apples and cherries only expected to bear fruit
starting year 2 |
The garment and textile component will focus on skills
development within the garment industry. It will help
increase productivity and competitiveness of the sector.
The Lesotho Enterprise Assistance Programme (LEAP) component
with a Matching Grant Scheme (MGS) will target through two
“windows of funding” (i) the Micro, Small and Medium
Enterprise (MSME) firms, with free assistance for firm-level
HIV/AIDS programs, specifically for on-site testing and for
treatment programs, using outside service providers; (ii)
and under LEAP will build the capacity of the private
business and professional associations and of chambers.
To support the Government’s Poverty Reduction Strategy
through private sector-led economic growth, the PSCED
Project will consist of three components.
The implementation of the project will cost USD 10.50
million (USD 8.10 million IDA financing and USD 2.00 million
Government counterpart funding) over five years period (See
Annex 1 for the detailed costs by component and Table 8 for
the summary costs by components).
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