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‘Support local business to boost post Covid-19 economic recovery’

by Sunday Express
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Mpeo Mahase-Moiloa

The objective of this article is to trigger debate and solicit support of the stakeholders for support and guidance on a framework in the formulation of a policy to manage localisation investment opportunities.

FROM time immemorial, migration has always been part of human-nature.

The most popular type for Lesotho being economic migration where Basotho move to the Republic of South Africa (RSA) is a glaring example. Whereas on the other side we have an influx the would be Foreign Direct Investors (FDI) migrating to Lesotho to carry out trade even in sectors clearly reserved for the Basotho nationals as stipulated by the Trade Enterprises Regulations of 1999.

It is also an undeniable fact that prior to the break of the Covid-19 pandemic, the world was experiencing the rise of anti-immigrant populism. The immigrants were now being viewed as both culture and economic threat. The possibility is that such tendencies will continue and/or intensify Post Covid-19 exacerbated by its negative impact on the economies.

When the Covid-19 pandemic hit, governments around the world responded in a more similar nature. They issued policy measures consistent with WHO recommendations on social and hygienic practices, which included among other restriction of human and vehicular movement, travel bans and total or partial lockdown.

There have also been policy responses to help economies manage their way through the crisis. What immediately became clear was that policy responses cannot be a ‘one – size – fits – all’. Countries have different capacities in terms of the resources; it would therefore be unrealistic to contain and control the Covid-19 pandemic in a uniform way.

As far as Lesotho is concerned, this pandemic finds us amid the reforms anchored on the following seven pillars: Constitutional, Parliamentary, Security, Justice Sector, Public Sector, Economic and Media. When the government declared the 21 days lockdown, a sad resounding public outcry of hunger and starvation was echoed country wide. People voicing their fear of dying due to starvation even before the virus itself could catch up with them. This was a confirmation of the Economic Cluster Experts Report (submitted as part of the reforms) which amongst others highlighted high levels of poverty demonstrated by the inability to afford human basic needs such as food, amongst others (Batho ba robala ba itsosa). To many Basotho, the Covid-19 pandemic is more of an economic crisis than a health crisis. This in its own is enough for all of us to tune into the mode we tuned into in the early 2000s when the HIV/AIDS pandemic was rigging havoc in our country. Let us once again grab a bull by its horns by; ‘TURNING A CRISIS INTO AN OPPORTUNITY.’

In recent years, some UN Agencies, The World Bank, IMF, the EU and others have been calling on the nations of the world to devise ways and means of increasing their domestic revenue collection. The SDGs also highlight ‘strengthening domestic resource mobilisation, including through international support to developing countries to improve capacity for tax and other revenue collection’ as one of the targets to be achieved by 2030. The concept was further amplified by the Third International Conference on Financing for Development held at Addis Ababa, Ethiopia in 2015. As a response to this clarion international call and with the aim of strategising to achieve its own commitment of strengthening domestic resource mobilisation and reducing aid dependency as set out in Agenda 2063; the AU Assembly of Heads of State and Government, in 2016 called upon the Economic Commission for Africa to undertake a study on the management of African mineral resources.

It is on this premise therefore, that as a country we should bring our heads together to address the issue of domestic resource mobilisation for funding some underdeveloped sectors such the ‘Food Security, Health and others.’ The fact that most households could hardly sustain themselves for the fewest days during the Lockdown calls for a paradigm shift. It just cannot continue to be business as usual for both public and the private sectors.

As the Lesotho Chamber of Commerce and Industry we wish to call for the localisation of business through an immediate and transparent implementation of the Trade Enterprise Regulations of 1999, which has a clearly stipulated category of businesses that are reserved for Basotho. Acknowledging that technology and innovation move at a high speed and have a direct bearing on trade and business, calls for a revision of such reserved items to accommodate the growth and new knowledge amongst the private sector, especially women and youth entrepreneurs.

The proposed localisation policy, in addition to the businesses reserved for Basotho, should focus on the development of local industries and value chains. This being influenced by a simple logic that value chain development goes hand-in-hand with economic development and acts as a major driving force in both job creation and skills development. There is an urgent need to identify sectors that have local content opportunities and to leverage them in collaboration with the multinationals.

In conclusion, we wish to categorically state that we are not in any manner whatsoever, opposed to FDI. We are very much alive to the underdeveloped nature of our country and the huge contribution the FDI could bring in job creation, skills transfer and economic development in various sectors. All we are driving at is a clear mapping out of areas to which FDI should be directed to. We are also cognisant of the challenge of start-up capitals as far as the local entrepreneurs are concerned, hence our submission as part of the reforms that Lesotho PostBank be capacitated to additionally function as a Development Bank. It is our earnest believe that this will inject some spectre of life to a long-standing endeavor of both the public and the private sector of a private led economic growth.

Mpeo Mahase-Moiloa is a former Minister of Law and Constitutional Affairs and now a member of the Lesotho Chamber of Commerce and Industries (LCCI). She writes here in her own capacity. Views expressed herein are hers and not those of the publication.

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