MASERU-THE Maluti Mountain Brewery (MMB) says it could throw away beer worth M127 million due to the Covid-19 restrictions on alcohol sale.
MMB said the beer is currently stuck at its brewery warehouse and some depots in Lesotho.
The beer, according to the company’s press statement issued yesterday, will have to be thrown away because of the Covid-19 lockdown that has banned beer sales.
“The process of decanting beer is not only an expensive exercise but has adverse environmental effects as well. If the restrictions continue this will completely collapse the industry,” the statement reads.
The MMB said the Lesotho Revenue Authority (LRA) is losing M45 million a month every time the restrictions are in place.
Countless businesses that relied on the MMB for operations, the statement said, already had to close their doors following the government’s decision to ban the sale of alcohol.
Through consultation with the wider industry, an estimated 30 percent of small taverns and bars will not re-open post the alcohol ban, the MMB said.
Meanwhile, 25 000 jobs created by the industry are said to be at risk with wholesalers, off sales, bars and taverns temporarily retrenching most of their workers or not paying them for days not worked.
The alcohol industry is said to support in excess of 25 000 families and accounts for three percent of the country’s GDP.
The MMB also said it is cutting 10 percent of workers’ salaries this month to December next year.
The company said this is a strategy to try and minimise the risk of future retrenchments as a result of inadequate funds due to the countrywide restrictions that have prohibited the sale and consumption of beer.
The company will also cancel its capital investment for 2020 worth M70 million which was targeted at increasing its brewing capacity as well as depot expansion.
Furthermore, all local service providers whose services are viewed as non-critical including third party transporters will be replaced by MMB’s own trucks.
The statement said should MMB’s business outlook deteriorate further the company might be forced to retrench.
LRA’s modernisation project extended to October
MASERU – A four-year project to modernise the Lesotho Revenue Authority (LRA)’s system which was supposed to have ended in June has been extended to October. The Lesotho Tax Modernisation Project is designed to address weaknesses and target areas for improvement that are linked to the main causes of weak tax administration in Lesotho.
It focuses on improving efficiency and service delivery, increasing Value Added Tax (VAT) compliance, and broadening the tax base. It is also meant to support the LRA to consolidate and deepen reform by focusing on redesigning and upgrading business processes.
It is also meant to develop an enabling legal and institutional framework, introduce modern information and communication technology to increase tax compliance and efficiency in tax administration. It also promotes peer learning and experience sharing with similar national revenue authorities in the region.
The purpose is to strengthen the government’s capacity to raise domestic revenue and provide fiscal space for priority public expenditures including counterpart funding for ongoing operations. The LRA said the project is at 90 percent towards completion.
Speaking at a media briefing in Maseru on Tuesday, the Project Manager, Mokhethi Mabeea, said the project began in July 2018 and it was supposed to end in June this year. They have extended the time to October 2022 because implementation it took longer than expected.
The project, he said, was designed to enhance their services and modernise old systems. Mabeea said they were working on a different scope which includes E-taxation. The E-filing was developed for Value Added Tax (VAT) and Pay-As-You-Earn (PAYE) and deployed for piloting.
“We believe in October it will be up and running,” Mabeea said.
He said E-payment was also developed and under testing while E-registration is under testing development. Mabea said there is the Business Intelligence and Data Warehouse. He said the Business Intelligence was strategically developed and they are still in the process with the strategy which will assist in the implementation stage.
He said Operational Reports and Dashboards were developed and in use. He further said the Data Governance Framework was also completed and it is being operationalised. Mabea said an E-invoicing Solution was established late hence it will be completed around March 2023.
He said they also realised that the staff needed to be equipped with training as technology changes. They included amongst others the Block Chain Technology, special sectors in the financial sector and telecommunications sector, as well as business processes management.
Mabeea said in the Tax Administration Bill that was sent to parliament before it was dissolved two weeks ago. The Income Tax Bill was also sent to parliament while the VAT Amendment Bill has already been considered by both Houses.
Mabeea said that in the category of Small Business Tax Enhancement, they are seeking to treat small and medium entrepreneurs differently in terms of registration and filing of tax. The registration, filing and payment processes have been re-engineered. He said the configuration of the Core Tax Management System is in progress.
He said they are still calling upon all Basotho who are employed to file their returns. He said everyone paying tax should update their registration information. The Digital Service Manager, ’Makhothatso Khanare, spoke of an online rating tool which is still in progress.
She said they had introduced a tool management system in some of their offices to improve the quality of services they offer. She said they had so far achieved a 91 percent satisfaction level.
Khanere said however, they realised that since most of their services are conducted online, the level of satisfaction was not traceable. She said they expanded their rating tool digitally and a new product will be launched next month. She said this will allow all their clients who visit their offices and use the digital services raise their concerns and opinions.
We’ll ban import of agric products, says RFP
MASERU – THE Revolution for Prosperity (RFP) says it might consider banning the importation of agricultural products from South Africa to promote the domestic market when it wins power in October.
The party’s spokesman, Mokhethi Shelile, said this in an interview with thepost in reaction to the launch of a new agricultural produce market centre for the northern region last week.
Shelile, who was once the head of the Domestic Investment Promotion Division at the Lesotho National Development Corporation (LNDC), told thepost that such a ban would help boost local farmers.
He said for that to be effective, there would be need to support local production as the first stage.
“This is the major challenge for the market sectors currently,’’ Shelile said.
He said since the farmers’ capacity is still low, only a few products such as potatoes are banned this season. Shelile said the production sector will need special attention to help the market centre.
Once they form government, he said they will immediately implement the idea to boost local farmers.
Shelile said an RFP government is going to establish markets where farmers will be able to sell the products even before they can start with the production so that they secure the financial means of increasing the production.
He said they realised that there are farmers who are still losing on their products because they cannot access markets.
“We want to give farmers a market even before they can start,’’ he said, adding that this will encourage farmers to increase their capacity and improve their standards.
The Lesotho National Farmers Union (LENAFU) programmes manager, Khotso Lepheane, said the setting up of the market centres will boost the farming industry in Lesotho.
“For the longest time this concept has been a good idea,” Lepheane said.
“Many potato farmers, amongst others, have benefited from this (Maseru) centre,” he said.
However, he said this concept introduction lacks a strong system which will encourage the retailers and the final consumers to buy from the market centre.
“This has caused a stagnation of products from reaching the consumers,” he said.
“This has discouraged many farmers from taking their products in the markets centre since it takes time for the products to be sold out and this might lead to damage of products.”
He said most of the farmers still consider the old method much safer. As much as the initiative is good, he said the concept cannot achieve its goal unless the market is channelled to market centres rather than seeing retailers and consumers importing what the country is producing.
“This is one of their biggest diversification mechanisms to commercial agriculture hence there are still some pricing challenges,” he said.
However, he said the cost is still bearable as compared to the role the centre plays. He said farmers still consider it as part of the change not a hiccup. Despite the challenges, he said they are still playing their role to educate farmers on how to improve their capacity and quality.
He said they also teach farmers on how the commercial sector works so that the pricing issues cannot tarnish the good initiative. He said they are also working with different departments to smoothen the supply chain.
Lepheane said they want to see more market centres being established in all the regions.
The Manager of Maluti Fresh Produce, Nthako Supi, said the market centre has the potential to encourage high productivity and boost the economy of the country. He said for the past 10 years, they were able to gather about 240 farmers who were growing crops, vegetables and fruits.
He said this year they were able to gather about 87 potato farmers and over 6 200 bags were sold out. He said they have a transparent system which allows the farmers to know and see how their products were sold and how they work. He said the centre is only entitled to the commission of the money they generated when the product is sold.
“The product belongs to the farmers until it has been sold out,’’ he said.
As much as they tried to improve their system for the sustainability of the centre, he said they still have some challenges which need to be addressed for its sustainability. He said the consistency and low productivity from the farmers’ side as one of the major challenges.
The setback, he said, is that the place where the market side is located is far from the traffic and shops hence the number of customers is still low. Supi said the major challenge is the tight competition they had with the South African producers.
He said most of the retailers and final consumers still consider buying the products in South Africa rather than supporting the market centre.
“We currently have more potatoes in our storage which are not performing so well in the market due to tight competition,’’ he said.
He said this is triggered by inconsistency of local farmers in terms of quality and quantity.
“Consumers buy what attracts their eyes, so if today consumers get a good quality product and tomorrow they get something different they lose hope in us,’’ he said.
“For the market centre to continue functioning, the market has to be regulated.”
The Public Relation Officer in the Ministry of Agriculture, Lereko Masupha, said Lesotho still needs to import basic products from South Africa because local farmers are not able to meet demand.
“However, our consumption is so high hence we still need products from other countries,” he said.
Blow for Akani
MASERU – A company fighting for a contract to manage Lesotho’s biggest pension fund paid bribes to win a similar contract in South Africa. Akani Retirement Fund Administrators, a South African company, has been fighting for the contract to manage Lesotho’s Public Officers’ Defined Contribution Pension Fund (PODPCF) since 2020.
The basis of its bid for the PODCPF contract was that it had a sterling track record in South Africa where it once managed the Chemical Industries National Provident Fund (CINPF) which has 21 000 members and is worth M7 billion.
The PODCPF has 35 000 members who are government employees and, like the CINPF, is worth M7 billion. But in a massive blow to its reputation, South Africa’s High Court last week ruled that Akani bribed the trustees of CINPF to topple a rival company and get the contract.
The victim of its corruption, the court ruled, was NBC Holdings, a major shareholder in NBC Lesotho Insurance Company Limited with which Akani is fighting for the PODCPF contract in Lesotho. NBC had been the CINPF’s administrators for three decades when Akani instigated its termination and took over the contract.
It is those allegations of corruption that were at the centre of the long-drawn battle between the companies. The court ruled that in 2019 Akani paid three CINPF trustees to terminate NBC’s contract. It found that the trustees faked the deaths of three relatives to receive the bribes in the form of insurance claims paid through
Neighbour Funeral Scheme, a company with strong links to Akani. The payments were made to the trustees – Bonginhlanhla Dangazele, Reginald Sema and Ayanda Sithole – four months after NBC’s termination and a week after Akani’s appointment.
Dangazele was the CINPF’s principal while Sema was deputised by Sithole as the chairperson of the board of trustees. Akani and the three had vehemently insisted that the payments which happened on the same day in 2019 were insurance claims for relatives who had died around the same time.
The three took up the insurance policies with the Neighbour Funeral Scheme around the time they were aggressively pushing out the NBC from the CINPF contract. Their relatives too died around the same time and their insurance pay claims were paid on the same day.
The court ruled that it was a “remarkable coincidence” that the three had taken out the policies at the same time, their relatives had died around the same time and Neighbour Funeral Services paid their claims within four minutes of each other.
Dangazele received M40 000 while Sema and Sithole got M25 000 each. Justice Adams said there is no explanation why, out of funeral policy vendors, the three trustees signed up for policies with Neighbour Funeral Scheme on the same day, their relatives died around the same week and their claims were paid minutes apart.
The judge said based on “irrefutable inferential reasoning, the true purpose of the payments to Dangazele, Sema and Sithole was a bribe”.
“The explanation for the receipt of substantial payments all on the same day, all from one funeral scheme vendor, which happens to be a company related to Akani, one week after the appointment of Akani, in which decision they were directly involved, implies a series of truly remarkable and unlikely coincidences,” the judge said.
He ruled that the termination of NBC’s contract should be reversed because it had been tainted by corruption and fraud. The court also ordered the CINPF to remove Dangazele, Sithole and Sema as trustees. The judgement in South Africa has serious implications in Lesotho because Akani and NBC are battling for the contract to manage the PODCPF.
The fight started after the PODCPF renewed the NBC’s contract as an administrator following a two-horse race with Akani. Four of the PODCPF’s trustees, who preferred Akani disputed the decision, wrote to Prime Minister Moeketsi Majoro, who was finance minister at that time, asking him to intervene to reverse NBC’s appointment.
They accused the board, of which they were members, of ignoring complaints against NBC in Lesotho and South Africa. They pointed out that NBC’s contract with CINPF has been terminated for “non-performance issues”.
They were referring to the same termination that the South African court has now ordered be set aside after finding that it was instigated by Akani through bribes to CINPF trustees.
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