Chapter five: Corporate governance 523. The Lesotho business sector is faced with many challenges, both general and specific. The broad challenges can be attributed to a number of factors that include the country’s size, its geographic position, its limited economic endowments and general global competitive dynamics. At a more specific level are the challenges of inadequate information, lack of access to supplies and finance, and a shortage of skills (particularly those that can help broaden the scope for global operations). 524. Supervision of business enterprises in Lesotho rests largely on various ministries. Issues of land management and land development, for example, fall within the domain of the Ministry of Local Government and Chieftainship (MoLG). Registration of businesses and reporting using different business forms are overseen by the Office of the Registrar of Companies answerable to the Ministry of Law and Constitutional Affairs. Licensing is the prerogative of the Ministry of Trade and Industry, Cooperatives and Marketing (MTICM). Regulation of the financial sector is vested in the CBL under the FIA of 1999. ii. Findings of the CRM The business environment 525. Lesotho falls within the category of least developed countries in Southern Africa and is a member of the Southern African Development Community (SADC). Lesotho relies on customs duties from SACU for the greater part of government revenue. Eighty-six per cent of Lesotho’s population lives in rural areas and engages in informal business activity. The main economic activities include agriculture, which contributes 14 per cent of gross domestic product (GDP), and the sale of water from the Lesotho Highlands Water Project (LHWP) to South Africa. A small manufacturing base has developed that depends largely on farm products to support the milling, canning, leather and jute industries. Significantly, the manufacturing of clothing, under the African Growth and Opportunity Act (AGOA), has had the fastest growth over recent years. A great majority of households gain their livelihoods from subsistence farming and migrant labour, with a large portion of the adult male workforce employed in South African mines (although the number of mine workers has declined steadily over the years). Assessing the business environment 526. According to the World Bank’s “Doing Business Survey 2009”, Lesotho ranks 123 out of 181 economies in the overall ‘ease of doing business’ ranking (see table 5.2). Table 5.2: Ease of doing business Ease of... Doing business Doing business 2009 ranking 2008 ranking Change in ranking Doing business 123 119 –4 Starting a business 125 128 +3 Employing workers 63 60 –3 145