Lesotho: 45 years of economic bungling

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THE government can play a critical role in developing sound policies that are conducive for business and promote a good investment climate.

If a government fails to play this role there will be adverse effects on the economy.

Lesotho may not have major instruments such as the Johannesburg Stock Exchange or the New York Stock Exchange in the United States (US) which are used to assess the health or ailment of an economy through observation of the share price.

However, even a layman in the streets of Maseru can observe the drastic deterioration in the general standard of living for ordinary Basotho.

The poor performance of Lesotho’s economy has unfortunately been stimulated by aspects such as the massive retrenchments of Basotho mine workers in South Africa, the sub-prime mortgage crisis which emanated in the US and declining Southern African Customs Union revenues.

All these problems have dealt a major dent on Lesotho’s economic well-being.

In the Doing Business Report for 2011 which was published in November last year Lesotho was ranked a lowly 138 out of 183 economies.

This lowly performance should be reason enough for the government to take drastic action to correct the situation.

But the main problem with our government is that it has never taken seriously initiatives regarding the creation of a thriving private sector.

It is only five years ago when Lesotho launched the Smart Partnership Policy, a policy that originated from Malaysia whose purpose was to create collaboration between the business community, the public sector and research and development with the objective of pooling together resources and expertise to improve the business environment.

It sounded quite a brilliant idea.

But five years down the line that policy has been forgotten and is now gathering dust somewhere in the government offices.

The Ministry of Trade, Industry, Co-operatives and Marketing recently launched the “one-stop shop” campaign, an initiative which is supposed to ditch tedious procedures of starting a business in Lesotho.

The idea was to consolidate and simplify the procedures.

But the issue is: How serious is the government in putting this idea into practice?

It is a pity that our government has not learnt from past experiences.

The world has become a “global village” in that what happens in one corner of the earth affects the other corner.

This was proven by the recent economic meltdown from which Lesotho is still struggling to recover.

A major deal, the Wal-Mart-Massmart merger, was approved by the competition tribunal of South Africa last week.

I am still to understand what the Lesotho government’s take on the issue is.

Wal-Mart is one of the world’s biggest retailers and makes use of sophisticated global procurement systems in order to achieve extremely low prices.

With such a huge enterprise in the neighbourhood one should start thinking how a low-cost leader like that in the neighbourhood is going to affect our small, micro and medium enterprises which are already barely surviving.

A major contributor to the economy in most developing countries is the tourism sector, which is mainly concerned with a country’s ability to showcase its national endowments and resorts.

But it would appear that Basotho are actually ashamed of the beautiful endowments in their mountains and flora.

For instance, very few people are aware that Lesotho is home to the highest peak in southern Africa — Thabana-ntlenyane.

This is a pity indeed.

Lesotho is also a country that has been blessed with water — commonly called the “white diamond of Lesotho”.

We have plenty of water here so much that we export most of it to our neighbour South Africa. Yet it still boggles the mind that Lesotho has an underperforming agricultural sector allegedly as a result of drought.

This does not make sense at all. This can only simply point at one thing — mismanagement of our water reserves.

One would also begin to wonder why we do not have courses in water engineering to develop passion in the youth of the country and create awareness of the value of this natural endowment.

We are simply failing to make use of our available opportunities.

Has anyone ever wondered why Lesotho imports still water when in actual fact it should be the other way round?

I rest my case.

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Lesotho’s widely read newspaper, published every Thursday and distributed throughout the country and in some parts of South Africa.

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