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The problem with LCD Inc

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AS our lead story reveals, the ruling Lesotho Congress for Democracy (LCD) has formed a private company to venture into the country’s lucrative diamond mining industry.

Formed in 2008, Nonyana Ntsu Investments is involved in a consortium eyeing Lemphane Diamond, a mine in Butha-Buthe.

LCD spokesperson Mothetjoa Metsing said the company was formed to raise money for the party’s operations.

The LCD, or any other political party for that matter, is within its rights to form companies and engage in other income-generating projects to shore up its finances.

The problem, however, arises when a ruling party’s company is involved in government contracts and other businesses that require government approval like mining rights.

When that happens, the government ostensibly becomes both referee and player in the business sector.

Serious issues of conflict of interest arise with dangerous consequences especially in Lesotho, where the lines between a ruling party and the government are blurred.

It is common knowledge that most of the government ministers are senior LCD members.

Many senior executives in government are either functionaries of the ruling party or at least LCD sympathisers.

How will these officials maintain their impartiality if Nonyana were to tender for a government contract?

Take mining rights, for example.

Mining rights are issued by the Ministry of Natural Resources which is headed by Monyane Moleleki, a senior member of the LCD.

How independent will he be when he deals with Nonyana’s application for mining rights?

Will other companies with no political connections stand a chance against Nonyana?

How will Moleleki balance the interests of the government — which represents the people’s interests — and those of his political party?

Clearly, such an arrangement compromises the government’s role as a referee in the business sector.

The dangers of conflict of interest that arise when a ruling party owns a business are even more apparent in Lesotho where the government is already the dominant player in the economy.

Every year the government spends billions of maloti on projects that have to go through the tender process.

What happens to the integrity of the tender process if Nonyana were to bid for a government project?

Will a government minister or other government officials treat Nonyana’s bids like any other?

Let’s not forget that all ministers are deployed in government positions by the ruling LCD.

Will a minister ignore the party’s pleas for lucrative tenders from his or her ministry?

We doubt it.

The situation is made worse by the fact that most of the ministers wear two hats — they are cabinet ministers and LCD office holders at the same time.

Take Minister of Trade Popane Lebesa, for example.

As the LCD treasurer his role is to ensure that the party’s coffers are healthy.

He is therefore in charge of Nonyana’s performance.

But in his role as trade minister, Lebesa also has the responsibility to ensure that there is investment coming into the country and he gets to meet many foreigners who want to do business in the kingdom.

Which companies will he look at if a foreign investor says they are looking for a local partner with which to venture into the mining sector?

Will he pretend to the investor that Nonyana does not exist?

How will he balance the interests of other citizens’ businesses and those of the LCD’s businesses?

In asking these questions we are not in any way insinuating that government ministers are not people of integrity.

No.

All we are saying is that an LCD Inc skews the playing field in the business sector.

Nonyana Ntsu Investments is obviously better placed to benefit in a business sector where the decision-makers are members of the LCD.

South Africa’s ruling African National Congress has found itself in a compromised position after it emerged that its company, Chancellor House Investments, has benefited from lucrative government contracts.

The company also has stakes in other consortia that won lucrative government tenders.

LCD Inc is therefore a risky venture.

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