Export constraints facing Lesotho-based manufacturing enterprises

Abstract

Orientation: Exporting is preferred by many enterprises as the mode of foreign entry as it requires less commitment of organisational resources and offers flexibility of managerial actions. However, enterprises face a number of challenges when attempting to initiate exports or expand their export operations.

Research purpose: This study was undertaken to determine the characteristics and composition of export barriers constraining exporting by Lesotho-based manufacturing enterprises.

Motivation for the study: Lesotho is faced with low destination diversity and low diversity in export products.

Research design, approach and method: Data was collected from 162 Lesotho-based manufacturing enterprises through a self-administered questionnaire.

Main findings: In its findings, the study firstly identified international constraints, distribution constraints and financial constraints as factors constraining exporting. Secondly, it was determined that three exporting constraints, all internal to the enterprise and all related to one factor (namely financial constraint) hampered exporting. Lastly, the ANOVA results revealed that the perceptions of export constraints differed according to the enterprise characteristics, enterprise size, ownership and type of industry.

Contribution/value-add: With the majority of enterprises in this study being identified as micro-enterprises, the government of Lesotho needs to pay particular attention to addressing the export needs of these enterprises in order to enable them to participate in exporting activities − especially considering that they can play a pivotal role in the alleviation of poverty, job creation and economic rejuvenation.