Business Precinct
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Invest in Lesotho’s
Business Precinct Development
A premier Public-Private Partnership (PPP) opportunity to develop a state-of-the-art, mixed-use business precinct in Maseru, strategically designed to service and elevate Lesotho’s core economic sectors.
Introduction
The Government of Lesotho, through the Lesotho National Development Corporation (LNDC), invites strategic investors to co-develop a landmark Business Precinct in Maseru via a Public-Private Partnership (PPP).
This pioneering project will create a centralized hub for enterprises in agriculture, mining, manufacturing, and tourism, fostering economic clustering and innovation. With confirmed interest from key government ministries as anchor tenants, the precinct offers a de-risked entry into a growing market. While a standalone commercial analysis indicates challenges, structuring as a PPP – with potential government capital grants and fiscal incentives – transforms the project into a financially viable venture with a robust NPV and IRR. This initiative is positioned to capitalize on Lesotho’s strategic advantages, including its access to regional markets, improving digital infrastructure, and cost-competitive, English-speaking workforce, aligning directly with both investor returns and national development goals.
Strengths &
Opportunities
The project’s vision is to aggregate and support businesses operating in Lesotho’s high-potential sectors creating a synergistic ecosystem that drives efficiency and growth.
Market Evidence:
Economic Resilience:
Lesotho’s economy is demonstrating resilience, with the World Bank projecting steady GDP growth of around 2.5% for 2024-2025, rebounding from previous global headwinds. Key sectors are poised for expansion:
Manufacturing:
The textiles and apparel sector remains a cornerstone, employing thousands and benefiting from preferential trade agreements, with exports exceeding $350 million annually.
Agriculture & Mining:
There is significant focus on high-value agricultural exports and the untapped potential of diamond and critical mineral mining, attracting new FDI.
Tourism:
With a renewed global focus on adventure and ecotourism, Lesotho’s unique offerings are gaining traction, supporting hospitality and service industries.
Supply Gap:
Lesotho currently lacks a modern, integrated business precinct offering Grade-A commercial space, high-quality amenities, and sector-specific support services. This project is the first of its kind, positioned to meet pent-up demand from multinational corporations and growing local enterprises seeking a consolidated, professional environment.
Strategic Advantages
The Lesotho Advantage:
Strategic Location & Market Access:
Landlocked within South Africa, Lesotho offers seamless accessibility to South Africa’s business centres and ports. There are regular flights (45-50 minutes) between Maseru and Johannesburg and 4-8 hour drives to its major cities, industrial hubs and ports (Johannesburg, Tshwane, Durban, Gqeberha, East London). The precinct’s location in Maseru CBD provides excellent connectivity for the local labour force and logistics. This positions the precinct as an ideal nearshore outsourcing hub for South African and international companies.
Cost-Competitive, Skilled Workforce:
Lesotho boasts a young, trainable, literate and English-speaking workforce – 82% literacy. Labour costs are highly competitive relative to regional benchmarks, offering significant operational savings.
Robust Digital Infrastructure:
Connectivity is a key strength. Lesotho is connected via multiple high-capacity submarine cables. The country’s 4G network coverage is extensive, Maseru has full extensive 5G coverage, and investments in fibre optics are accelerating, ensuring the precinct can support digital-first businesses.
Anchor Tenancy & PPP Security:
The confirmed interest of government ministries to act as anchor tenants provides a stable, long-term revenue stream, significantly de-risking the initial leasing phase for the private partner.
Lesotho has high levels of connectivity via three main submarine cables:
The Eastern Africa Submarine Cable System; Seacom and the West Africa Cable System. Within the country the Lesotho Communications Authority has deployed 46 base stations to remote areas via the Universal Service Fund, the most successful in Africa.
Incentives
Low corporate income tax:
• 25%
Training:
• Cost of Lesotho citizens allowable at 125% for tax purposes
Withholding tax:
• 10% on service contracts with non-residents
• 25% on dividends distributed from income by resident companies to non-resident shareholders
• No withholding tax on dividends distributed to Lesotho residents
VAT:
• 15% on goods and services sold in Lesotho
• 0% on direct exports
Risk guarantees:
• Partial credit guarantee through the LNDC
Support from the LNDC includes:
• Serviced industrial and commercial sites at competitive rentals
• Provision of industrial and commercial buildings at competitive rentals
• Financial assistance on a selective basis
• Investment facilitation services
• Assistance with permits and licenses
• Assistance with company registration
• Assistance with industrial relations issues
• Appraisal of investment projects
• Assistance with preparation of project briefs for the Environment Impact Assessment (EIA) Certification
Central business district, Maseru
List of investment opportunities
The investor/developer’s role will be to finance, design, construct, and potentially operate the precinct. The core infrastructure scope includes:
Construction of commercial and office buildings.
Provision of enabling infrastructure:
Power, water, telecoms fibre, roads, lighting, sewerage, and security systems.
Site management and facilities maintenance.
Beyond the core, there is significant scope for value-add development, creating a truly mixed-use destination:
• Sporting and recreational facilities (e.g., gym, running tracks).
• An education and innovation centre for skills development.
• Apartment blocks or a hotel to accommodate tenants and visitors.
• Retail and hospitality outlets (restaurants, cafes).
The land will remain in Government/LNDC ownership, with the PPP terms (including leasehold, revenue-sharing, and management models) to be negotiated with the successful bidder.
The financial analysis of the business precinct investment opportunity is computed over a ten-year period. Revenue and expenditure projections are in line with industry growth prospects and market potential and have been informed by and benchmarked against industry standards and norms. In addition, assumptions relating to inflation; depreciation and salvage value; and company tax have been worked out based on the existing laws and directives of the country. The figures above represent high level estimates as of January 2021 and are not derived from a full feasibility study. Investors are advised to conduct their own due diligence.
Disclaimer
This web page provides a strategic overview. All financial figures are based on a high-level investment opportunity model and should be used as an indicator of potential only. Investors are strongly encouraged to conduct independent due diligence and a full feasibility study with the support of the LNDC to validate all assumptions under current market conditions.