Business reforms in slow-motion

Business reforms in slow-motion

MASERU

THE Private Sector Foundation of Lesotho (PSFL), a business lobby group, says reforms to make it easy to do business are not moving fast enough.

For this, the PSFL blames the government’s lack of political will and sense of urgency to push the reforms.

Bureaucracy and lack of coordination between government ministries are also part of the problem, the foundation says.

The foundation says potential investors continue to overlook Lesotho because of poor service delivery and an unfriendly investment climate.

By ‘poor service delivery” the PSFL means the late payment of suppliers, slow implementation of programmes as well as difficulty in meeting senior government officials.

It also includes a weak monitoring and evaluation framework.

On the investment climate the foundation observes that Lesotho’s laws and policies are either outdated or not responsive enough. At the core of the problem, the lobby group says, is the slow implementation of the reforms that to make Lesotho a better place to do business in.

The foundation gives an impression of a country that is aware of what needs to be done to improve its standing as an investment destination but simply chooses to move slowly.

In its press statement the PSFL goes to length to show how the government has failed to push the necessary reforms.

It says in 2012 the USAID Southern African Trade Hub (Trade Hub) assisted Lesotho through the Lesotho National Development Corporation (LNDC) to develop an Investor Roadmap (IRM) to improve the investment climate.

The roadmap came up with 51 recommendations to improve Lesotho’s regulatory climate based on the World Bank (WB) Ease of Doing Business indicators.

The PSFL says when the Trade Hub came back to assess progress on the recommendations it found that nothing much had happened.

The Trade Hub found that several ministries and departments were not aware of the roadmap. It found that there was no coordination amongst the ministries, constitutional framework and a champion to drive the reform agenda.

The foundation says another audit in May 2015 showed Lesotho had made some progress, especially on regulatory framework, since 2013.

For instance, the Ministry of Development Planning established a Reforms Unit. In addition the government has also established a Cabinet sub-committee to lead the implementation of the investment reforms.

The PSFL however says the reforms unit and a cabinet sub-committee are not enough to start getting the reforms moving.

“It is critical that the Cabinet Sub Committee becomes operational as soon as possible to give impetus to the whole process,” the foundation says. “Lesotho needs to continue focusing on quick wins (low hanging fruits), building strategic linkages amongst ministries and with the private sector, and communicating reforms to the public.”

 

The PSFL also noted the following:

  • There is a major problem of silo or fragmented approach to reforms. Ministries and implementing agencies are clearly not working together. Some Ministries have not taken reforms into their work program, resulting in slow implementation.
  • There is a need to budget for the implementation of the reforms.
  • There are still a lot of policies at drafting stage that need to be fast-tracked to expedite the reforms.
  • Despite the marked progress with implementation of the ASYCUDA program at borders in Lesotho, there are major problems at the borders where the ACYCUDA program is being piloted. These need to be addressed before the program is rolled to other border posts.
  • There is a need to capacitate, properly resource and empower the reforms staff in the Ministry of Development Planning to enable them to effectively deliver on their mandate.
  • There is a lack of a targeted reforms communication program both within implementing Ministries or agencies and with the public.
  • The pace at which reforms are implemented is very slow and many processes and procedures are still manual, inhibiting faster turnaround times.
  • There is still a need to solicit buy-in from the leadership and political fraternity as regulatory reforms would not succeed without adequate support from the top.
  • There is not much partnership between the public and private sector.
  • There is a lack of a proper monitoring and evaluation framework for the reforms.
  • Lesotho needs to have a specific ranking target and a clear timeframe to achieve the targeted movement on the rankings.
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