Selling to the Government

Foreign firms may fully participate in government procurement; however, they have to first register as legal entities, apply for trading licenses, and register with the Revenue Service Lesotho for tax purposes. Lesotho is not a signatory to the WTO Agreement on Government Procurement, which means that it is not bound by conditions prohibiting specification of locally made products in tenders. In March, the government enacted the Public Procurement Act, 2023.  The law centralized public procurement under the Lesotho Public Procurement Authority.  The law requires the authority to establish a Central Tender Board that will approve or reject a recommendation of bid evaluations to award a tender. The Public Procurement Regulations 2007 and Public Procurement Amended Regulation, 2018 have decentralized public procurement to line ministries, with each contracting authority operating its own tender panel, which is responsible for the decision on the award of contract. The Procurement Policy and Advisory Division (PPAD), under the Ministry of Finance, is the regulatory body with overall responsibility on Lesotho’s public procurement regime. In evaluating proposals, the procurement unit grants a margin of preference for nationals as follows:  15 percent to a local business with a majority shareholding of at least 51 percent; 10 percent to (a) a business owned between 30 percent and 50 percent by Lesotho nationals, (b) a tenderer bidding to supply goods of Lesotho origin, (c) a tenderer performing at least 50 percent of the contract in Lesotho and using and developing the capacity of Basotho staff, (d) a tenderer subcontracting at least 50 percent of the contract to one or more Basotho businesses, (e) a tenderer that has the largest use of locally produced goods, materials, and services, or (f) a tenderer employing the largest share of local labor; and, five percent to a business owned between 10 percent and 30 percent by Lesotho nationals.

Key areas of opportunities for tenders include:

• Infrastructure Development
• Energy sector
• Water sector
• Education
• Health

U.S. companies bidding on Government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.

Financing of Projects

Commercial banks offer project financing to investors.  Lesotho is a recipient of development assistance from the African Development Bank (AfDB. The priorities for 2020-2024 AfDB’s Country Strategy Paper (CSP) for Lesotho, are infrastructure development an institutional capacity building.  For more information please visit: https://www.afdb.org/en/countries/southern-africa/lesotho.

Lesotho has also been receiving funds from the World Bank through International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA).  Lesotho has also received funding from the European Union and the U.S government through the Millenium Challenge Corporation (MCC).

               The People’s Republic of China has also been providing funding to the government through the Export-Import Bank of China. The Bank of America is exploring investment opportunities in energy generation.

For additional information, visit the U.S. Department of State Investment Climate Statements.  

Multilateral Development Banks and Financing Government Sales. Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks (PDF). The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank.

Learn more by contacting the Commercial Liaison Office to the African Development Bank.