POLITICAL party, Majalefa Development Movement (MDM), has called on the government to revamp state agencies mandated with promoting business development to spur economic growth.
Commenting on Finance Minister Moeketsi Majoro’s maiden budget speech for the 2017/2018 financial year earlier this month, MDM Chairperson Ramahoana Matlosa said the two agencies namely Lesotho National Development Corporation (LNDC) Basotho Enterprises Development Corporation (BEDCO) were now mostly focused on just providing space for rental instead of fulfilling their mandates.
The LNDC is a government parastatal charged with the implementation of the country’s industrial development policies.
Its stated mandate is to initiate, promote and facilitate the development of manufacturing and processing industries, mining and commerce in a manner calculated to raise the level of income and employment in Lesotho.
For its part, BEDCO’s primary responsibility is the establishment and development of Basotho-owned enterprises.
Mr Matlosa told the Business Journal in a recent interview that he expected the government to outline plans to ensure the two agencies fulfilled their mandates of creating jobs.
“Politically, it is a good budget, but if we are to transform the country’s economy, we need to take bold steps,” he said.
“One would have expected the Finance minister to talk about how they are going to turn those agencies around because they have failed to deliver on their mandate.”
Mr Matlosa added: “You will observe that their major business is space renting, which is not their primary mandate. Their primary mandate is to help with the development of Basotho businesses at different levels.”
“For instance, bar one, all our commercial banks are foreign-owned and therefore really have no genuine interest in the development of the business sector in the country.
“They are sitting on a lot of cash that is eventually sent to South Africa leaving very little in the country. A bold step therefore would be to compel them to fund SMMEs (small, medium and micro enterprise businesses) because they are the backbone of every economy.
“We are not saying banks should throw money into the business community, but our banks do not have a good reputation for supporting local businesses to flourish and they have their own interests.”
He also said the government did not do enough to reduce its high wage bill.
“Like in all the other previous budgets, the government expressed concerned with the high wage bill, but they don’t put the money where their mouths are.
“I feel more investment needs to be directed towards the private sector. Let us allocate in such a way that will allow us to reform our ailing economy.”
Mr Matlosa also called for initiatives to ensure that Lesotho stops exporting most of its natural resources in a raw state. Currently, wool and mohair, diamonds and water are exported in their raw state.
“There is a lot of job creation potential in the processing of wool and mohair. There is no country that can develop with the kind of thinking we have.
“Yet we are blessed with raw materials that include diamonds and water, but we still export them in their raw state. For instance, the chain of processing wool and mohair from cleaning it, weaving it, and turning it into clothes would create so many jobs.”
“We should not just stop at cleaning the wool and mohair, but we should continue to process it further to create more jobs.”