Company registration
Objective: Strengthen the capacity of the Company Registry to improve the effectiveness of its role in the establishment of businesses and as an information resource for the public and private sectors by supporting the consolidation of business registration processes.

Activities: The following activities will be supported by the project:

• Implementation assistance for the trade and industrial licensing reform
• Design and installation of an integrated and computerized system for business Licensing, notification and company registration
• Purchase of computer equipment and associated software
• Design and conduct of training programs for MCTIM staff to support new licensing regimes
• Design and conduct of training programs for the staff of the Registrar General’s Office
• Operation and maintenance of the installed IT systems; and
• Costs of publishing and printing of laws and regulations

Expected Results

• A modern and efficient Company Registry established and consolidates all business registration processes;
• The time required for registration significantly reduced;
• The costs to businesses lowered below that of its regional competitors; and
• Businesses and the public access company information in an efficient manner.

Business licensing

Objective: Streamline the industrial and trading licensing regimes so as to reduce significantly the time and costs to both the public and private sectors, and to restrict the licensing process to essential regulatory purposes. In the area of trade licensing, the mandatory trade license will be converted into a reporting requirement, while in the area of industrial licensing, the procedures will be redesigned to reduce drastically the duration and burden of the licensing process.

Activities: The following activities will be supported by the project:

• Redrafting of the legislation and regulations referring to industrial and trade licensing (e.g., the Industrial Licensing Act (1969); Pioneer Industries Encouragement Act (1969)).
• Redesigning application forms and procedures, including developing transparent criteria for decision-making and job descriptions for MTICM staff.
• Computerization of data processing and its integration into the broader computerization program within MTICM.
• Designing and supporting the implementation of an efficient appeal mechanism.
• Developing procedures and M&E procedures to support performance targets.
• Staff training to support the new licensing process.

Expected Results

• The time and costs to both the public and private sectors or obtaining trade license reduced;
• The duration and burden of the industrial licensing process reduced

Objectives: (i) streamline and simplify the procedures to issue basic documents, such as visas, work permits and residency permits; (ii) improve the public perception of the IPS by instilling the principals of improved productivity, courteousness and efficiency in IPS officers; and (iii) reduce corruption during border crossing activities and in the dispensation of immigration benefits.

Activities: The project will upgrade and enhancement of Lesotho’s IPS operations and staff capacity and will support the following:

• Pilot project for Visa Pre-Clearance and Port of Entry (POE) Visa Issuance.
• Pilot project to partially computerize adjudication and information services within the Ministry of Home Affairs
• Pilot project to computerize operations at selected ports of entry enabling them to communicate electronically with each other and IPS headquarters.
• Development and implementation of a historical baseline database capable of providing information and generating periodic management status reports for the GOL.
• Analytical Studies.

 Pilot project for Visa Pre-Clearance and POE Visa Issuance

Objective: to simplify and streamline admission protocol and accelerate the entry of tourists, guest workers and investors to Lesotho.

Activities:

• Design and implementation of a program for establishing visa pre-clearance and visa issuance procedures at four selected POE’s – Maseru Bridge, Ficksburg Bridge, Maseru Airport, Sani pass and Caledonsport. The activities will be undertaken in close collaboration between the Ministries of Home Affairs; and Tourism, Culture and Environment.
• Training of staff to carry out these new responsibilities.

Pilot project to partially computerize adjudication and information services

Objective: to upgrade and expand the computerization of its adjudication, benefits and information services, and to make it more difficult to misuse the immigration system.

Activities: Upgrade and computerization of the existing adjudication and information services at IPS headquarters within the Ministry of Home Affairs, including procurement and installation of new hardware and software as well as providing capacity building of staff to increase their ability to effectively operate the new equipment.

Pilot project to computerize operations at selected ports of entry

Objectives: To computerize the IPS inspection and admission services at the selected five ports of entry (Maseru Bridge, Ficksburg Bridge, Maseru Airport, Sani pass and Caledonsport), markedly improve IPS service delivery as the ports will be able to communicate electronically with each other and IPS headquarters and to provide better service to citizens, tourists, guest workers and investors.

Activities:

• Development and implementation of an integrated and enhanced management information system.
• Procurement and installation of hardware and software
• Staff capacity building required to operate the new system

Development of a historical baseline database

Objective: To develop a historical IPS baseline database to assist in the management of day to day IPS operations by automatically generating periodic reports.

Activities: Computerize the manual data records for services provided during 2004-06.

Development of a training and certification program for Consular Officers

Presently, Consular Officers are permitted to issue visas and travel documents with little or no training. Within embassies internal policies and procedures for securing the visa issuance process are seriously deficient.

Objective: To provide training to consular officers issuing visa and travel documents and improve the procedures for securing visa issuance.

Activities: The activities will be conducted in close collaboration with the Ministries of Home and Foreign Affairs:

• Design and implementation of a program leading to the training and certification of consular officers authorized to issue visas.
• Creation of a staff training program intended to develop their skill and capacity to administer this program.

Analytical studies

Objective: To provide guidance to the Government on the most efficient way to issue residency/work permits and on how an intra governmental communication channel and a National Identification Program can be implemented.

Activities: Three studies designed to compliment and enhance the pilot projects and to provide guidance for action in pertinent operational areas of IPS will be financed:

Feasibility study for the creation of intra governmental communication channel.

• Develop a strategic blueprint for incorporating an intra governmental communication channel capability into the existing IPS information management system.
• The goal is to create inter-ministerial interoperability permitting other ministries, which operate off of different systems, to access the IPS database.
• The results of this study will guide the GOL in designing appropriate information management enhancements to IPS operating systems in order to bring them into line with international “best practices”. This work will need to be coordinated with IT managers in the affected ministries.

(Feasibility study and design of a National ID card System utilizing a public-private sector approach.

• A well structured national identification system, which restricts everyone to a single unique identity number, could reap significant benefits for the GOL.
•  An identity number, which can be used as a key to identify individuals in numerous systems that are currently employed within Lesotho’s public and private sectors is urgently needed.
• This verification system will be used extensively whenever entitlement to government benefits or other services are called into question.
• The study will contain recommendations for design, advertisement, coordination, funding, development and implementation of the project, recommendations for use of a possible private-public funding modality, as well as recommendations for the type of ID card production system best suited for use in Lesotho. The costs associated with establishing the system would be provided under the Compact Program funded by the Millennium Challenge Corporation.

(iii) A study to determine whether a front loaded or back loaded Residency/Work Permit Issuance policy is best for Lesotho. The issuance of work and residency permits represents the culmination of a number of important decisions. How and when these decisions are made determines whether the process will yield commercially sensible and efficient outcomes for investors. Two approaches to issuance of these documents exist; each can provide worthy outcomes. To determine which approach offers the most consistent advantages this activity will:

• Conduct an in depth analysis of each approach to determine which is better suited for use in Lesotho,
• With the aim to reduce the number of decisions required at the recruitment level, which helps to reduce the number of bottlenecks and thus delays.
• Determine whether or not the use of features such as the key worker scheme and/or open lists for foreign recruitment can facilitate investment in priority sectors.

 
Banks typically require well secured collateral from applicants and are ill-suited to serve the needs of MSMEs due to informal asymmetries on project quality between the bankers and entrepreneurs, the lack of adequate collateral and inadequate lending instruments.

Objective: The objective of this subcomponent is to assist the Government in addressing the issue of the limited access to finance by SMEs from commercial banks facilitated by two actions:

• Technical assistance to help the Lesotho National Development Corporation (LNDC) to design and set up an Enterprise Development Facility (EDF) which would provide guarantee to SME’s to unlock loanable funds from the commercial banks.
• Technical assistance to develop a well functioning leasing industry in Lesotho.

Activities: The project will provide support to complement some of the activities already ongoing, such as:

• Training of LNDC staff in commercials risk assessment and credit risk guarantee, and in assets/liability management to build LNDC expertise and familiarizing them with assets/liability management and operational issues, to take into account the new line of business in the form of contingent liability carried off the balance sheet.
• Revision of LNDC Investment Committee’s procedures to align LNDC decision making process to respond to demand from SME’s for guarantee.
• TA to develop leasing industry activities under this sub-component are designed to complement each other in order to create a suitable environment to attract leasing firm in Lesotho. They will be implemented by LNDC under the aegis of MFDP. They include the following activities:

• Develop Leasing Industry for Lesotho. The project will fund short term consultancy to develop a leasing industry for Lesotho including the drafting, for adoption and promulgation of a Leasing Act consistent with the corresponding Act in South Africa, which will indicate the rights, duties and obligations of participants including those related to the adjudication of cases etc.

• Design a tax regime applicable to leasing. Short term consultancy services will be provided to the Government for designing a tax regime applicable to the leasing industry, by (i) studying the existing tax regime, (ii) consulting with the Government to design the appropriate tax regime including definition of possible tax incentives to be conceded by the Government to the leasing industry and (iii) other actions and regulatory reform needed to attract leasing institutions in Lesotho.

Activities: The Lesotho Enterprise Assistance Program (LEAP) will address these issues, using a mix of four separate interventions:

• Direct assistance to individual firms, providing the direct mentoring assistance; and also the provision of cost-sharing grants to firms, for the use of specialized services.
• Cost-sharing grant assistance to representative business and professional associations and chambers, to build their capacity to better serve their members.
• Grant financing for the first five years to support regular public-private sector dialog.
•  Cost-sharing grant assistance to firms, for on-site HIV/AIDS testing.

•  The project will fund measures to promote public-private dialog through support to private sector apex organization.
• Further, a small proportion of funds will be earmarked to conduct strategic studies supporting the public-private sector dialogue, corporate governance agenda, and building critical institutions supporting PSD (i.e., setting up the Commercial Court, development of the Alternative Dispute Resolution (ADR) and a small claims court, development of an investment strategy for Lesotho, etc.).
• Funding will be provided to co-finance workshops and seminars for distribution and discussion of the findings and recommendations.