Lesotho rebuilt its public procurement system with the Public Procurement Act 2023, which centralised what had been a decentralised process running separately across ministries and agencies. The Act created three institutions: the Lesotho Public Procurement Authority, the Public Procurement Tribunal and the Central Tender Board.
The commercially decisive feature is not the process, though. It is the preference margins. Lesotho is not a signatory to the WTO Government Procurement Agreement, which leaves it free to apply domestic preference, and it does so at levels that are large enough to determine outcomes. A competitor with majority Basotho ownership carries a 15 percent advantage before a single price is compared.
Insika assesses whether a business is genuinely tender ready, structures bids and partnerships around the preference regime rather than against it, and prepares the compliance and capability documentation that procuring entities actually check.
Who runs procurement, and who to complain to
Four bodies matter, and they do different things.
- Lesotho Public Procurement Authority (LPPA). The authority established by the Act for oversight and management of procurement. Registration with the LPPA is part of being able to participate properly.
- Central Tender Board. Oversees high-value procurements, issues requests for bids, and signs contracts on behalf of procuring entities. For large contracts, this is the body you are actually dealing with.
- Public Procurement Tribunal. The appeal route. Knowing it exists changes how you handle an adverse decision, because it means a bad outcome is reviewable rather than final.
- Procurement Policy and Advisory Division (PPAD). In the Ministry of Finance and Development Planning, retaining overarching responsibility for procurement policy and advice, and maintaining the suppliers database used for payment through the government financial system.
Separately, the Directorate of Corruption and Economic Offences investigates corruption, including in procurement. That matters to a legitimate bidder in a practical way: it is the route for raising a process that has gone wrong, and it is a reason to keep your own bid documentation clean and auditable.
The Public Procurement Regulations 2025 were issued under the 2023 Act to give effect to the framework. Because they are recent, confirm the current procedural detail rather than working from older guidance.
The preference margins, and what they mean for your bid
This is the table to build your strategy around. Preference margins are applied to promote domestic participation, and they are substantial.
| Criterion | Margin of preference |
|---|---|
| Businesses 51% or more Basotho-owned | 15% |
| Businesses 30% to 50% Basotho-owned | 10% |
| Suppliers of Lesotho-origin goods | 10% |
| 50% or more of the contract performed locally with Basotho staff | 10% |
| 50% or more subcontracted to Basotho businesses | 10% |
| Highest local input or labour share | 10% |
| Businesses 10% to 30% Basotho-owned | 5% |
What a foreign or foreign-owned business must do
Foreign companies are permitted to participate in Lesotho procurement. They are not permitted to do it informally.
The baseline is that a foreign firm must register as a legal entity in Lesotho, obtain a trading licence, and register for tax with Revenue Services Lesotho. There is no route that skips those. Our page on business registration and licensing covers what each involves and in what order.
Beyond the baseline, the realistic strategies are structural rather than commercial:
- Joint venture with a Basotho-owned firm. At 51 percent or more Basotho ownership the venture attracts the full 15 percent margin. This is the single highest-value structural decision available.
- Subcontract at least 50 percent to Basotho businesses. A 10 percent margin, and it is achievable without changing your ownership.
- Perform at least 50 percent of the contract locally with Basotho staff. Another 10 percent, and it also builds the local delivery capacity that wins the next contract.
- Source Lesotho-origin goods. A further 10 percent where your inputs allow it. Whether goods qualify as Lesotho-origin is an origin question, and the same certificate-of-origin discipline covered on our import and export page applies.
These are not mutually exclusive, and the right combination depends on the contract. The mistake we see most often is treating the preference regime as an obstacle to complain about rather than a structure to design around. It is published policy, it is stable, and a bidder who plans for it eighteen months out is in a completely different position from one who discovers it at bid stage.
Tender readiness: what actually gets checked
Preference margins only help a bid that is compliant in the first place. Suppliers must be properly registered, with tax and trading licences up to date, and must meet bid security, documentation and procedural requirements. A technically excellent proposal that fails a compliance check is not scored.
Run this checklist before you chase a specific tender, not after you find one:
Where the opportunity is
Public procurement accounts for a significant share of public expenditure in Lesotho and is a primary channel for delivering public services and stimulating economic activity. For a business with the right structure, it is one of the most reliable sources of contracted revenue in the economy.
The largest single driver of infrastructure procurement is the Lesotho Highlands Water Project Phase II, whose main works contracts were awarded in November 2022 with construction starting in early 2023. It carries a long pipeline of works and services, and it is described in more detail on our infrastructure page.
Beyond that, the sectors that recur are construction, professional and consulting services, cleaning and facilities, security, ICT, supply of goods, and increasingly energy. The company register shows construction as by far the largest registered sector in Lesotho, which tells you both where the work is and how much competition to expect.
What Insika does on tenders
- Tender readiness assessment. An honest audit of registration, licences, tax standing, financial capacity, technical capability and documentation, with the gaps ranked by what blocks a bid.
- Preference structuring. Designing the ownership, subcontracting and local-content position to attract the margins your business can legitimately claim.
- Partner identification. Finding and vetting Basotho partners for joint ventures and subcontracting, and getting the agreements executed before bid time.
- Capability statements and technical proposals. Documentation that answers what the procuring entity scores, rather than what the company likes to say about itself.
- Bid compilation and compliance checking. Because the most common reason a good bid loses is a missing document.
- Post-award support. Contract compliance, and where necessary the route to the Public Procurement Tribunal.
Official sources
This guide is based on the current rules published by the relevant Lesotho authorities. Always confirm the latest fees and requirements with the office that applies to you.