Call for business diversity for even sector development

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Bereng Mpaki

OVER 75 percent of local businesses are focused on wholesale and retail, the latest business register study by the Bureau of Statistics has revealed.

The study is published as a sampling frame for periodic business surveys in the country to informing future business developments by the government and its partners.

Its latest survey titled 2015/2016 Census of Establishments Business Register published in February 2018 said the wholesale and retail sector accounted for 76,1 percent of local businesses.

This is only followed by manufacturing with a paltry 8,1 percent.

The study collected disaggregated data on business demographic information, including creation and closures, mergers, takeovers and break ups. It also collected data on structural changes in the economy brought about by operations such as the change in the line of businesses among others.

The surveyed business establishments were also disaggregated in terms of employment size by four different categories namely, micro, small, medium and large.

The Bureau of Statistics undertook the census of establishments in the 2016/2017 calendar year with its criteria targeting all enterprises which were formal and informal.

Statistics indicate that 75,6 percent of establishments were classified as micro, which defined businesses with 1-4 employees. There is however, a small proportion for large establishments observed across all districts with the biggest being 2,5 percent in Maseru, followed by 1.6 percent in Leribe.

The survey showed that there were 9649 entities listed during the census of business establishments and 9625 of those were operational during the 2015/2016 calendar year.

However, according to the information from the One-stop Business Facilitation Centre, the number of companies in Lesotho was 32 671 as of March 2018. The One-stop Business Facilitation Centre’s functions include registering companies under auspices of the Ministry of Trade and Industry.

Of these, 15 949 are active companies to date.

Among the industries with the most companies are construction with 9946, real estate/property management with 1634, mining with 1267, catering with 1191 and 1033 for cleaning services. There are 1010 consultancy enterprises, 516 security services, 344 in printing and 103 in waste water management.

Secretary General of the Lesotho Chamber of Commerce and Industry Fako Hakane attributed the flooding of the wholesale and retail industry to the lack of diversity.

“The wholesale and retail industry has been a default sector for entrepreneurs to fall back on,” Mr Hakane said.

“However, in recent years we have seen a change with some graduates demonstrating creativity by venturing into such businesses as garment production and information and communication technology among others.

“This is the right way to go if we are to address the lack of diversity and concentration on a few types of businesses.”

Mr Hakane further indicated that the new direction being pursued by new entrepreneurs was supported by the Buy Local campaign which is championed by the Ministry of Small Business Development and partners.

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