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More job cuts loom as firms buckle under global crisis

Staff Reporter


MASERU — If you want to know how troubled Lesotho’s textiles industry is just look at the number of jobs the sector has haemorrhaged over the past four years.

Or better still you can ask Daniel Maraisane — who has been secretary-general of the Lesotho Clothing and Allied Workers Union (Lecawu) — for the past 11 years.

Lecawu is one of Lesotho’s biggest unions.

But first, the figures: 15 000 is the number of people who have lost their jobs since 2005.

And six is the number of textiles factories that have shut down since trouble hit the sector four years ago.

As for Maraisane’s verdict: well, he calls it a “disaster”.

This is the sorry state of affairs Lesotho’s textiles workers found themselves in as they celebrated Workers Day yesterday.

So dire is the situation that May 1 might not have been worth celebrating at all.

The factories keep cutting jobs, orders from major markets have slumped and the future looks bleaker than it was during the same time last year.

Those lucky enough to be still employed know only too well that they might wake up any day to find their jobs gone.

The few remaining textile factories, mostly owned by the Taiwanese, might shut down any time as well.

“The situation is getting worse. In fact it’s already worse,” Maraisane says with a hint of helplessness in his voice.

For the past three years Maraisane has watched thousands being thrown onto the streets after their factories went bust or hastily relocated to other countries.

Five years ago the sector had nearly 50 000 people on its payroll.

About 85 percent of the workers are women.

Today that number has come down tumbling to around 35 000. And the figures have not stopped plunging.

If anything, Maraisane says, more jobs might be lost this year.

His fears are not unfounded.

In 2006 about 4 000 jobs were lost in the textiles sector.

Two years later in 2008, 5 000 were laid off and last year 7 000 were made redundant as the industry crumbled due to the global financial crisis that suppressed demand for clothes from major markets, especially the United States.

Lecawu’s membership has shrunk by nearly half from a high of about 8 000 in 2006.

This year does not look promising either, says Maraisane.

Enticing new investors into the sector has been “almost impossible”, he says.

As the industry tumbles so too has the unions’ bargaining power.

It’s hard to wring concessions from employers already battling to keep their factories afloat.

These days when Maraisane attends salary negotiation meetings with factory owners he already knows “that nothing much will come out”.

“They will tell us that they are already on the verge of bankruptcy and they cannot afford even the least of salary increases,” he says.

Nothing disarms a trade unionist like an employer who pleads poverty and can prove it with facts and figures.

The troubles ailing Lesotho’s textiles industry are well-documented.

“It’s tough because on the one hand you have to ensure that people get decent wages while on the other you have to ensure that your demands don’t endanger those few remaining jobs,” Maraisane says.

So the wages have hardly moved upwards.

Yet factory owners still complain the meagre wages they are paying are bleeding their businesses.

Others find excuses to avoid paying the government-stipulated minimum wage.

An average textiles worker gets M800 a month, a pay cheque that can barely sustain an ordinary family of five.

In the meantime transport, food and fuel costs have not stopped galloping.

“We know that the salaries are way below the living wage but we have to understand that we are dealing with a collapsing industry,” Maraisane says.

He says “a proper living wage should be between M1 300 and M1 700” but admits that under the current harsh economic conditions getting those figures might just be a pipe dream.

Maraisaine has been in the industry long enough to know that all it takes for a textiles factory to shut down is a small increase in costs.

Textiles factories’ margins are thin and costs high.

When the cost of transporting wares to Durban, the port nearest to Lesotho, increased on the back of surging fuel prices last year, two factories folded.

Sometimes factory owners don’t even announce that they are shutting down – they simply pack their bags and slither out of the country.

That is precisely what C-River factory owners did in 2007 when they were faced with mounting debts and demands for salary increments.

One September morning the owners abandoned their factory, leaving 700 workers unpaid and stranded.

“The situation is delicate,” Maraisane laments.

In February this year 2 400 people lost their jobs after a Mafeteng factory, P&T, closed shop citing viability problems.

Maraisane believes P&T’s closure was just a harbinger of worse trouble to come.

“We have strong fears that more factories might close down soon unless something is done to save the industry,” he says.

Although things have never been smooth-sailing in the industry they have never been this bad, Maraisane adds.

Signs are already apparent that trouble lies ahead.

A significant number of the 35 000 that still have their jobs are temporary workers.

They only go to work when they are really needed and that means they earn less than what they used to earn when they were still permanently employed.

The textiles sector might be the poster child of Lesotho’s economic troubles but it’s not the only sector limping, says Moletsane Jonathine, the secretary-general of the Lesotho Trade Union Congress.

“The financial sector has crippled almost every sector,” Jonathine says, adding that most companies have slashed jobs.

“Our unemployment rate is already too high at 45 percent and now the job cuts are pushing those numbers up.

“What makes it particularly scary is that most of the people that are losing jobs are women.”

After losing their jobs, Jonathine says, most people are resorting to prostitution and other criminal activities to feed their families.

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