MASERU — Lesotho’s textiles industry has sent out an SOS asking the government to subsidise wages for the sector’s 35 000-strong workforce.
This, the textiles industry says, will help factories recover from last year’s financial crisis that left most firms on the brink of collapse and forced some to shut down.
The textiles sector is Lesotho’s biggest employer after the government which has about 37 000 people on its payroll.
The sector says since orders slumped last year factories have been unable to remain viable and about 7 000 jobs had to be cut.
In the last four years the sector has shed nearly 15 000 jobs.
Two factories have closed shop since January last year and more are feared to be on the verge of collapse because of reduced orders from the main markets as well as competition from stronger economies like China and India.
To avoid more closures and job losses, the textiles sector is now asking the government to help the industry pay its workers for the next six to 12 months.
The proposal is contained in a document written to Finance Minister Timothy Thahane by the Inter-Ministerial Textile & Apparel Industry Task Team.
The task force is made up of representatives of workers’ unions, factory owners and the ministries of trade, health and home affairs.
The Lesotho Revenue Authority and the Lesotho National Development Corporation are also part of the task force established by Prime Minister Pakalitha Mosisili soon after the near-collapse of the textiles sector in 2004.
The sector is proposing that the government pays half of the industry’s wage bill with the industry settling the other half for the next six to 12 months.
The industry wants to use the “savings” from the proposed arrangement to resuscitate operations and increase capacity.
But the industry will not repay the government if the proposal is approved.
Daniel Maraisane, secretary-general of the Lesotho Clothing and Allied Workers Union (Lecawu) and a member of the task force, confirmed such a proposal had been submitted to the government.
Lecawu is one of the biggest labour unions in Lesotho with nearly 5 000 members.
“It’s an emergency package that has been requested from the government,” Maraisane told the Sunday Express in an interview.
“It’s a subsidy meant to give a reprieve to the textiles industry that is slowly dying.
“We hope that in six to 12 months the sector would have stabilised and in a position to sustain itself.”
Part of the proposal, Maraisane said, is that the government would also give soft loans to troubled factories.
“We have been told that the proposal has been handed to Minister of Finance Timothy Thahane and that he is looking at it,” he said.
“Obviously there is need for consultations before anything concrete can happen.”
After consultations the proposal will be submitted to cabinet for approval.
The sector employs about 35 000 workers who earn an average of M887 a month.
Under the proposal, the government would have to pay at least M443 to every worker.
That means the state will be forking out over M15 million every month in wage subsidies to the factories.
If the government agrees to subsidise the sector for six months it will have to fork out M93 million.
That figure will double if the state agrees to help out for a year.
As of December 2007 only 11 percent of the textiles industry was owned by Basotho.
Taiwanese owned the biggest chunk with 65 percent.
In 2007 Lesotho exported 85 percent of its textile products to the United States and earned M387 million.
At its peak in 2004 the sector exported M456 million worth of garments to the same market.
Women constitute 85 percent of the industry’s workforce.
A collapse of the sector could have a ripple effect in other industries.
For instance, the public transport industry which heavily relies on textile factories for business could suffer.
The retail sector could suffer as well.
So too will the other small companies that provide support services to the sector.
Last year the government bailed out CMG Textiles after the company was hit by cashflow problems due to a slump in orders.
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