Overview
Lesotho’s non‑textile manufacturing base is smaller than garments but strategically important for diversification. Sub‑sectors include automotive components, light engineering products, construction materials (cement inputs, bricks, steel fabrication), furniture and wood products, plastics and packaging, chemicals and detergents, and small metal works. Manufacturing value added outside textiles has been gradually recovering post‑pandemic, supported by LNDC estates and proximity to South Africa for inputs and markets.
Sector Structure and Key Facts
- Output and trade: Non‑textile factories supply the domestic market and export selectively into SACU.
- Costs: Wage and rental costs are generally below South African industrial metros, while logistics benefit from proximity to Gauteng.
- Employment: Tens of thousands are employed across manufacturing with textiles dominant; non‑textile employment remains modest but growing in food, packaging and materials.
- Key players: LNDC industrial estates (Maseru, Maputsoe, Mafeteng, Botha Bothe) host diversified light industry.
- Linkages: Construction booms and LHWP works drive demand for materials and prefabrication.
Competitive Analysis
Cost competitiveness (labour, factory shells, utilities) relative to South Africa; duty‑free access to SACU; quick access to SA suppliers and the Gauteng/Johannesburg market; ability to integrate into SA value chains while enjoying smaller‑market agility and tailored aftercare from LNDC.
Institutional and Legal Framework
- LNDC– estates, industrial sites and land facilitation, financial support.
- RSL – taxes, customs and duties.
- Ministry of Trade, Industry and Business Development – trade, investment and industrial policy and standards framework.
Incentives and Support Schemes
| Incentive Type | Details |
| Reduced Corporate Income Tax | Preferential rates for manufacturing activities at 10% (RSL guidance). |
| Duty Drawback and Input Rebates | Relief on imported inputs used for export production under customs rules (confirm duty draw back and rebates with RSL and National Tariff Body – OBFC). |
| LNDC Factory Shells and Sites | Ready‑built units and serviced land on industrial estates; aftercare and investor facilitation. |
| Skills and Training Support | Partner programmes to upskill technicians and operators; potential access to training rebates via donor initiatives. |
Key Investment Opportunities
Packaging and plastics for regional FMCG; beverages and bottled water; construction materials (precast, steel fabrication); household products and detergents; repair/refurbishment services supporting mining and construction.
Other Investor Information:
Scale is limited by the small domestic market; success depends on export orientation into SACU, reliable logistics, and quality/standards compliance; power reliability is improving but firms should plan backup systems.
Compliance and Participation Strategies:
Register with RSL and customs for rebates; use LNDC estates for serviced infrastructure; build SA partnerships for inputs and distribution; adopt ISO/quality standards to compete in retail value chains.
Key Takeaways:
- Competitive cost base and market proximity to Gauteng.
- LNDC estates lower setup friction.
- Export orientation and standards are critical to scale.
Checklist for Foreign Investors
- Confirm eligibility for reduced corporate tax
- Apply for factory shells/sites
- Arrange input rebates
- Set up QA/standards
- Build SA distribution links