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Chamber of commerce speaks on budget  

 

Bereng Mpaki

THE Lesotho Chamber of Commerce and Industry (LCCI) has commended the government’s decision to increase the budgetary allocations to two ministries with a mandate for business development.

In his maiden budget speech for the 2017/2018 financial year worth M18.7 billion earlier this month, Finance Minister Moeketsi Majoro allocated M194.8 million to the Trade and Industry ministry compared to M139.9 million of the previous year.

He also allocated M211.90 million to the Small Business Development, Cooperatives and Marketing ministry which is also an improvement from last year’s M136.40 million.

In a recent interview with the Business Journal, LCCI President Ntaote Seboka described the increments as the government’s statement of intent to address the challenges bedevilling private sector development.

“There are two critical ministries in terms of private sector development, and for the first time, their budgetary allocations improved,” he said.

“One can surmise from the allocations that the government is aware of the fact that the private sector is virtually dead due to many years of neglect.

“So, we have reason to believe that the increased allocations will have a significant impact on the private sector.”

Mr Seboka also stated that they were also looking forward to closely collaborating with the government in the policy formulation process for issues related to the private sector.

Chiming in, LCCI Secretary-General Fako Hakane also lauded the budget speech’s review of the public procurement system.

The public procurement system, he said, should be transparent and free from corruption to foster economic development.

“Another issue that spoke directly to us is the drafting of procurement regulations that would, among others, inhibit public servants from tendering for government contracts,” said Mr Hakane.

“As the chamber, our hope is that the government will also work towards using the public procurement process to promote private sector growth and development, especially in relation to SMEs.”

Illustrating his point, Mr Hakane said it did not make sense for the government import bottled water when Lesotho is blessed with pristine spring water which is bottled by various local players using high manufacturing standards.

The chamber was also impressed by the government’s intention to set up a committee to develop lending proposals to business start-ups and small enterprises and also to review the two government partial credit guarantee schemes.

“We hope the government will work hand in glove with the central bank to create an environment that encourages innovative but prudent financial services for the private sector,” Mr Hakane said.

Another issue the LCCI welcomed is the government’s undertaking to efficiently pay its suppliers with the responsibility vested with the principal secretaries.

Mr Hakane said if followed through, the intervention would bring much-needed relief for suppliers who currently have to wait for many months or even years to get paid for providing goods and services.

The LCCI also called on the government to foster the participation of local players in the mining sector. Currently, the shareholders in the mining sector are foreign investors and the government of Lesotho.

It also wants the government to dispose of its shares in various private companies to local investors. These institutions include Basotho Canners, Cash Build Store, Shoprite store, AVANI Maseru and Lesotho hotels, Lesotho National Development Corporation properties, Maluti Mountain Brewery, Loti Brick, Lesotho Flour Mills and Lesotho Milling Company among others.

The chamber urged the government to have a project management approach to its operations.

“There has been a tendency in previous years to delay the use of ministerial budgets until late in the year,” Mr Hakane said.

“We would like the government to adopt a very strict project management approach to utilising ministerial budgets, especially when it comes to capital expenditure which has, at times, been reallocated or forfeited due to not being used on time.

“Prioritisation of capital expenditure allocation in each line ministry would help to build the national infrastructure that is in dire need of attention, and thereby act as a lubricant for private sector investment.”

Mr Seboka also called on the government to capacitate local tertiary institutions to cut back on the costs spent to train Basotho students abroad.

“Education is essential for any country to develop, and we commend the government for a significant budgetary allocation.

However, the country can be benefit from this allocation if the focus is more on local tertiary institutions development rather than through provision of scholarships for foreign study at a tertiary level.”

He pointed out that countries in the region advanced in that regard ahead of Lesotho.

“We can educate a whole lot more at a significantly reduced cost if the education provision is done locally.  The spill over effects from such developmental expenditure will also help grow the currently struggling private sector, especially the small and medium-sized enterprises,” Mr Seboka said.

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