The Ministry of Trade, Industry and Small Business Development, in collaboration with the Ministry of Law, Justice and Correctional Services, has announced the implementation of the Insolvency Act of 2022 during a joint press conference attended by Honourable Mokhethi Shelile and Honourable Richard Ramoeletsi. The event marks a critical shift in how insolvency is handled in Lesotho, aiming to promote fairness, efficiency, and transparency in business recovery and liquidation processes.
Speaking at the event, Minister Mokhethi Shelile acknowledged that not all businesses succeed, but even in failure, a structured, fair, and inclusive insolvency process must exist for all parties involved, including creditors, employees, and investors. He explained that under the previous regime, insolvency matters were handled by the Master of the High Court. However, the new Insolvency Act has introduced a division between individual and corporate insolvency. Individual insolvency will remain under the jurisdiction of the Master of the High Court, while corporate insolvency will now be managed by the Ministry of Trade through the Office of the Registrar of Companies.
Honourable Shelile described this as a groundbreaking reform, highlighting that the dual oversight model reflects a unified approach between the two ministries. He announced a series of initiatives aimed at modernising the corporate insolvency framework to make it more business-friendly, predictable, and aligned with international standards. The new system is designed to be simpler and more cost-effective, removing unnecessary legal burdens and opening new avenues for distressed businesses to restructure rather than shut down.
The Minister also called upon all stakeholders—including legal and accounting professionals, financial institutions, business owners, trade unions, regulators, and individuals—to actively support and engage in the successful rollout of the reforms. He emphasised the importance of collective collaboration in ensuring that the new system delivers its intended outcomes.
Echoing these sentiments, the Minister of Law, Justice and Correctional Services, Honourable Richard Ramoeletsi, clarified that the Insolvency Act was officially implemented on 1st April 2022 as Act No. 26 of 2025. He stressed that the Act introduces mechanisms to give struggling businesses an opportunity to recover rather than be pushed directly into liquidation. Instead of being summoned to court immediately, companies will have the chance to negotiate and reorganise if they are facing financial difficulties.
Minister Ramoeletsi also highlighted provisions for individuals, allowing them to engage directly with creditors in a transparent process to determine feasible repayment plans, without immediate court involvement. This shift is designed to make the insolvency process more humane and practical, particularly for small businesses and individuals affected by economic hardship.
The joint implementation of the Insolvency Act of 2022 is seen as a vital step in strengthening Lesotho’s economic resilience, encouraging responsible entrepreneurship, and providing the tools necessary for financial recovery and restructuring.
