Wednesday, July 17, 2024
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CAFI project targets creating sustainable entrepreneurs

Business

Lineo Mahlomola

The Ministry of Trade, Industry, Business Development, and Tourism recently launched a new World Bank-supported project targeting promotion of sustainable women and youth entrepreneurs.

Dubbed the Competitiveness and Financial Inclusion (CAFI), the project is funded to the tune of US$53 million (about M900 million), comprising about US$45 million (M810 million) loan and US$7.5 million (M90 million) grant.

The project has further received a US$950 000 grant (about M17 million) from the India Brazil and South Africa Fund for Poverty and Hunger Alleviation (IBSA Fund).

The project’s objective is to increase access to business support and financing services for micro, small to medium enterprises (MSMEs) and entrepreneurship in general.

The project became effective from September 2022, and will end in 2028.

CAFI is building on the foundation laid by its predecessor, the Private Sector Competitiveness and Economic Diversification Project (PSCEDP), which was still funded by the World Bank.

The key mandate of PSCEDP was to facilitate private sector investment in the country by improving the business environment and by diversifying sources of growth for Lesotho’s economy.

It ran from 2007, and in the process played a significant role towards improving the country’s investor climate through legal reforms and automation of government to business systems among a host of other broader business reforms that spanned several public institutions. 

Speaking at the launch, CAFI Project Manager, Chaba Mokuku, explained that the project is targeting unemployed women and youth affected by poverty.

“The project will specifically work with financial institutions to help develop innovative financial products and also supporting the review of already existing schemes to ensure that partial skill response to the needs of MSMEs,” Mokuku said.

He said the project is targeting creating at least 500 sustainable MSMEs start-ups over the next six years.

On his part, the Minister of Trade, Mokhethi Shelile said part of the project is aimed at increasing access to financial products more especially for MSMEs. 

“The government of Lesotho through CAFI project will also be investing in financial resources towards development of Lesotho’s entrepreneurship economic system over the next six years.

“We have seen significant job losses and investors closing shops in Lesotho to relocate to other attractive investment destination, this has made us to partner with the International Labour Organisation (ILO) and International Trade Centre to find ways of maintaining and increasing Lesotho’s participation in textile and apparel value chains,” Shelile said.

Also speaking at the launch, the Principal Secretary of the Ministry of Trade, Industry, Thabo Moleko, said the project is designed to tackle the country’s socio economic challenges.

“Our country is currently facing challenges including, high unemployment, poverty and rampant corruption. The CAFI Project is specifically designed to address the above issues by strengthening our private sector so that it plays meaningful role in the economy,” said Moleko.

Finance Minister Dr Retšelisitsoe Matlanyane, said the project will will create more jobs and reduce high rate of unemployment.

“We will establish an entrepreneurship hub and seek finance facility because the youth, not just in Maseru, are also doing a good work but they are in villages and sometimes they don’t get awareness that they are such opportunities and because we want to get the entrepreneurship assistance programs system for the MSMEs to expand their operations,” Dr Matlanyane said.

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