Lesotho: Rapid e-trade readiness assessment

Summary

Lesotho has experienced significant economic growth, driven by diamond exports. To sustain growth, the country is diversifying into sectors like mining, quarrying, textiles, and apparel. E-commerce is seen as a potential booster for economic performance and diversification, but success requires fundamental reforms, such as reliable and affordable infrastructure, a sound legal framework, access to finance, and digital economy readiness. Challenges include low internet access, high service costs, limited technology adoption, financing issues, and weak IT skills. The country has high infrastructural connectivity and widespread mobile usage, but internet use remains low due to high costs and limited competition. Digital payments are underutilized, with only one-third of the population making digital payments.. The legal and regulatory environment is weak, with pending bills on electronic transactions and cybercrime. Trust in online systems is low, and many lack internet skills or perceive no need for the internet. Business skills and awareness of business incubators are limited, and high interest rates hinder access to financing for MSMEs.

Despite challenges, some businesses are using online platforms, indicating potential for e-commerce growth if the outlined issues are addressed.