No simple solution to economic woes – Majoro
FINANCE minister Moeketsi Majoro says Lesotho’s economic future requires political stability and a lowered risk of another election.
The minister said this recently in response to media questions and posted the answers on his Facebook page.
Dr Majoro said there was no simple solution to the country’s economic difficulties as the sources are due in part to the global and regional economic downturn which, the country’s leadership had no control over.
He said these are compounded by deterioration in government financial balances as governments lack the necessary resources to stimulate the economy.
Dr Majoro said the country’s economy remains bright, although it requires political stability.
“Lesotho’s economic future is bright but requires political stability and lowered risk of another election,” Dr Majoro said.
“The noise about bringing down this government is unfortunate and cannot be in the interest of Basotho, although it may serve the need for power for the promoters of these sorry ideas.
“The conflict in the ABC is equally unfortunate and has put at risk the lives of Basotho. But to argue that there are formations outside the government that can coin a better future for Basotho is sheer folly. It is easy for those who have never had to deal with these difficult questions nor have any experience in governing to imagine that they can do better now. This is not the time for experimentation.”
Dr Majoro however, said that the best solution in this situation is for the government and the private sector to collaborate to raise their capital injections to stimulate the economy.
“On the struggling economy I have been clear on the sources of the economic downturn and actions needed for reversal,” Dr Majoro said.
“I have also pointed out that there will never be a simple solution because the source of the economic difficulties are due in part to a regional downturn emanating from the slowdown in the South African economy and that a solution depends significantly on how quickly the economy of South Africa recovers. Also, the US economy, including US garment imports, must remain strong amid global trade and conflict tensions for Lesotho to merely maintain textile growth momentum.
“A contagious regional slowdown that is also accompanied by deterioration in government financial balances is difficult to combat as governments lack the necessary resources to stimulate to the economy.
“This was the case for many countries (Greece, Portugal, etc) during the 2008 global financial recession and it remains so for our partners in Southern African Customs Union (SACU).
“The best solution is normally (for the) government and the private sector working together to raise their respective capital injections. In the absence of generous government investment, the private sector has to take up the burden, and this is what we have been promoting; of course this requires political stability.”
Dr Majoro said the government would hold its first job summit on 21 August as a follow-up to the economic labs initiative held in March this year. The economic labs initiative is expected to create at least 30 000 jobs.
“The government has established a formal investment mobilisation process known as the investment laboratory, with the help of the Malaysian outfit Performance Management and Delivery Unit (Pemandu). At this moment, financial commitments amounting to M20 billion have been made by private investors. These commitments are likely to create 30 000 jobs in the next five years. On 21 August, the government will hold its first job summit and open day for the investors,” he said.
Dr Majoro said government has raised more than M3, 5 billion in funding for the water sector from the World Bank, the European Union, and the European Investment Bank. The funds are expected to bankroll water projects to benefit communities in Hlotse, Tsikoane, Maputsoe, Mafeteng and Mohale’s Hoek.
He said government has also signed financing agreements with Saudi Fund and Opec Fund for the distribution of water to all communities through which the Metolong Dam pipe lines pass.
Dr Majoro also said he has undertaken comprehensive discussions with the Lesotho National Development Corporation (LNDC) on how it can leverage its balance sheet to promote more investment.
For the financing and equity injections government will provide, the LNDC has developed a healthy pipeline of investments amounting to M10 billion and at least 10 000 to 15 000 jobs in addition to those from the investment laboratory initiative. Investment deals concluded cover manufacturing, horticulture, grains, meat production, agro-processing, poultry, dairy and cannabis, amongst others. For these to happen, he said, he would lead a campaign to raise M1 billion for the LNDC to capitalise its commitment to these investments.