Litmus test  for Lesotho

Litmus test for Lesotho

THE launch of Mon Foods Farm and Abattoir last week could be a game-changer for Lesotho.
The launch comes at a time when the government of Lesotho is aggressively pushing to economically empower Basotho.

For the record, we wish to state that in principle, we are not opposed to the new regulations that seek to empower locals in business.
We would like to believe that the new chicken venture will be a litmus test for Lesotho as to whether we have the intellectual gravitas and aptitude to run massive projects of this nature.

The whole idea in setting up such a project is to empower Basotho and achieve the dream of economic independence.
As we have argued on this page in previous editorials, we find it extremely unacceptable that 50 years after independence we still rely on our more prosperous neighbour, South Africa, for our basic foodstuffs.

It is an embarrassment that, 50 years after independence, we still import everything from eggs to cabbages for our basic needs.
To put that into perspective, take for instance what happened in 2007. That year, Lesotho imported 5 400 000kgs of chicken from South Africa.
That figure ballooned to 20 000 000 kgs in 2014.
That is staggering.

That is why we think new business ventures like the one launched last week must be supported to cut our over-reliance on South African imports.
However, these new players on the market will need massive support from the government or they will collapse.
These new businesses will need access to ready markets. They will need access to cheap loans from the banks to grow their businesses.

We believe with such support, new ventures such as Mon Foods will quickly assert themselves on the market and give established South African companies a run for their money.
Yet in seeking to empower Basotho economically, the government must exercise caution.

The new controversial regulations announced last month to block foreigners from certain businesses are a case in point. After further perusal of the regulations, we think they are too draconian and need to be watered down.
Lesotho is fortunate that it is trying to implement these regulations at a time when such programmes have been tried elsewhere before. The results have been dismal. We know that history is a great teacher and we must learn from it, lest we plod on, with disastrous consequences.

Uganda, under Idi Amin, drove away the Asians in the 1970s. Zimbabwe under Robert Mugabe drove away the whites from the farms ostensibly to empower the black majority.
The results in both instances were calamitous.
We must learn from history about these failed indigenisation programmes. In most instances, such empowerment programmes have collapsed spectacularly.

Instead of generating jobs for the locals, empowerment programmes if applied wrongly, can trigger massive capital flight.
We also have a problem with the M2 million capital threshold that the government is pushing. That figure looks frighteningly too high. Most SMMEs were started with far less money than M2 million.

The point is that starting a business has nothing to do with the amount of cash one has; what matters is whether one has a sellable idea that can translate into a successful enterprise.
We would like to believe that the government needs every hand on the deck to grow Lesotho’s economy. That will not happen as long as we seek to close space for business.

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