- exposing low intra-Africa trade participation
With the exception of neighbouring South Africa, far-flung Belgium and the United States (US) are among the biggest trade partners for Lesotho by value, data from the Bureau of Statistics (BOS) has revealed.
Lesotho exported M1.288 billion and M912 million worth of goods to Belgium and the US respectively, during the second quarter of 2023, according to BOS’s Foreign Trade Statistics Report for the second quarter of 2023.
Foreign trade statistics or international merchandise trade statistics (IMTS) provide information relating to imports and exports of the country.
Trade statistics cover the physical movement of goods, which add to or subtract from the material resources of a country by entering (imports) or leaving (exports) its economic territory.
Belgium and the US accounted for over 50 percent of Lesotho’s total exports during the period under review, underlining their critical role in Lesotho’s economic activity despite being thousands of miles away.
The US, which has the African Growth and Opportunity Act (AGOA) unilateral trade agreement with Lesotho, is estimated to have imported US$350 million or (about M6, 3 billion) worth of goods from Lesotho in 2022.
Belgium on the other hand, is a major importer of Lesotho’s rough diamonds, which were estimated in the region of US$252 million (about M4, 5 billion) in 2021).
South Africa, which was the highest exporter of Lesotho goods during the period under review, accounted for 44. 7 percent of Lesotho’s total exports. Lesotho exported a total of M1,8 billion worth of goods to South Africa.
Countries such as Botswana, Mozambique, and Egypt imported less than two percent of goods from Lesotho, suggesting extremely poor intra-Africa trade between these countries and Lesotho.
“In the second quarter of 2023, Lesotho’s major trading partner countries for exports were South Africa (44.7 percent), Belgium (30.5 percent) and USA (21.6 percent). Other countries accounted for less than 2 percent worth of exports for each,” an extract from the report reads.
The majority of imports into Lesotho were from South Africa followed by China and Taiwan. Lesotho did not import goods from any other African country apart from South Africa during the period; yet another sign of a poor intra-Africa trade trend.
“South Africa was the main partner country supplier of Lesotho Imports constituting 76.8 percent followed by China with 11.1 percent of the total goods imported. The rest of the countries contributed less than 5 percent worth of imports each.”
The low inter-trade between Lesotho and the rest of the continent raises questions as to whether it can actively participate in the continent-wide African Continental Free Trade Area (AfCFTA) trade agreement as a signatory.
The AfCFTA is an ambitious trade pact to form the world’s largest free trade area by creating a single market for goods and services for almost 1.3 billion people across Africa and deepening economic integration in Africa.
The general objectives of the AfCFTA are to:
- Create a single market for goods, and services, facilitated by the movement of persons to deepen the economic integration of the African continent and in accordance with the Pan African Vision of “An integrated, prosperous and peaceful Africa” enshrined in Agenda 2063;
- Create a liberalised market for goods and services through successive rounds of negotiations;
- Contribute to the movement of capital and natural persons and facilitate investments building on the initiatives and developments in the State Parties and RECs;
- Lay the foundation for the establishment of a Continental Customs Union at a later stage;
- Promote and attain sustainable and inclusive socio-economic development, gender equality, and structural transformation of the State Parties;
- Enhance the competitiveness of the economies of State Parties within the continent and the global market;
- Promote industrial development through diversification and regional value chain development, agricultural development, and food security; and
- Resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.