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Lesotho relaxes indigenization laws.

Lesotho relaxes indigenization laws

MASERU, Lesotho – Trade and Industry Minister, Thabiso Molapo, this week tabled in parliament amendments to the Business Licensing and Registration Regulations, 2020.

The controversial regulations published last October preserved 47 businesses for indigenous Basotho. The move was meant to protect and encourage the development of the small business sector.

The regulations were however, met with resistance from parliamentarians and the public forcing the ministry to temporarily suspend their operation.

Among the concerns were that the motor dealers licence fees were exponentially increased from M600 to M300 000 per annum, in an attempt to rid the industry of foreign players who were allegedly crowding out locals.

The regulations also stipulated that all motor vehicles imported into the country by either dealers or individuals must be less than eight years old.

But Molapo this week said they have resolved to amend the law to plug the gaps that made its implementation difficult.

He said they considered some of the public and parliament’s concerns on the regulations for amendment.

“The Business Licensing and Registration (Amendment) Regulations, 2021 seek to close some of the gaps that were identified in the original regulations,” Molapo said.

He said among the proposed amendments was revision of the motor dealers’ licence fees downwards after considering the public outcry.

The new regulations also make it mandatory for motor dealers to get roadworthiness approval for their inventory of used vehicles at the Transport ministry before displaying or selling them. 

Another amendment they have proposed was revising upwards the capital requirements for foreign investors to do business in Lesotho. The original regulations had stipulated R2 million as the capital requirement to start a business in Lesotho but members of parliament said the figure was too low as many foreign investors can easily raise it.

The minister further said they have also refined the meaning of ‘indigenous citizen’ as being “a person whose ancestry can be traced back to at least three generations as citizens of Lesotho”.

“This is to ensure that naturalised citizens do not exploit the opportunity of venturing into business activities that are strictly reserved for indigenous citizens.”

Molapo said they have currently suspended implementation of the original regulations after noting the public outcry.  

“The implementation of the original regulations was suspended when we realised the challenges that made their application challenging. We hope to continue implementation once parliament has approved the amendments before it,” Molapo said.

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