LESOTHO has the capacity to transform its economy by concentrating on developing mini factories and market places for small businesses. As Lesotho’s youth are becoming ever innovative, take the case of the National University of Lesotho (NUL) for example, we believe that time is ripe for the country to transform its economy by creating highly affordable, even subsidised, mini-factory shells for small businesses. The country should also develop good market places.
The government of India defines mini factories as those hiring 40 people or less. Definitions vary from place to place but the bottom line is that they are small factories compared to mega-factories which hire up to 2000 workers at once. Many of the textile factories in Lesotho fit in the definition of large factories.
Why are small factories important?
Lesotho National Development Cooperation (LNDC) has done amazing work by building factory shells for large scale manufacturers from all over the world. However, think about this, what would have happened to Lesotho’s economy if just half of the money spent on those factories were used to build small factories, whose rent is affordable to an ordinary Mosotho?
This is not to say LNDC should have focused on small factories since that appears to be the role of Basotho Enterprises Development Corporation (BEDCO), which, to be fair, has tried its best in that area. However, if the government was to focus attention creating small, low-cost factory shells for small businesses countrywide, we could speak a different yet positive story in a few years’ time. Here are the reasons:
Small factory shells fit the economic condition of Basotho
Have you ever wondered why the mega factory shells of the LNDC are often owned by foreigners? The answer is obvious. Basotho cannot afford the exorbitant rental costs. The result is a foreign based textile industry that is often attracted by low labour costs in Lesotho. Of course its contribution to the country’s economy cannot be underestimated and it should be supported.
Small business could contribute to equitable distribution of wealth
Many small factories are better suited to empowering more Basotho entrepreneurs than the few mega factories which generally produce a few, often foreign millionaires.
Small factories can even be rural based
The beauty of small factories is that due to fewer logistics needed in their establishment; the government can establish them all over the country, even in rural areas. This could go a long way in rural to urban migration, a phenomenon that often breaks the social fabric.
Kick-starting a generation of entrepreneurs
Humans, by their nature, are entrepreneurs. Creating an enabling environment is often all that is required to bring out the entrepreneurs in them. For instance, a teacher who gets paid M 7,000-00 a month can afford to pay M 700-00 rent in a small factory that makes and sells soap if such a place is available.
However, if there such a place is not available, he would not realise opportunities available.
Market places for small businesses
Have you ever thought about what could happen if Lesotho were to have large market places all over the country where small business, even individuals, could sell all kinds of goods in mini-stalls with low rental costs? Although we have such places, they are just too few and leave a lot to be desired. Giving people a platform to sell their products will assist to a great extent in bringing out the entrepreneurs in them.
In conclusion, we have often heard how small businesses in Lesotho are “empowered” by teaching them “business skills”. While that is necessary, we however believe that more can be achieved by creating an enabling PHYSICAL ENVIRONMENT in which those “business skills” can be put into practice.
- By Lesotho Industrial Consultants