Bail out for Stone Shi

MASERU – THE government will fork out M8 million to pay wool and mohair farmers that Stone Shi has failed to pay on time.
The payment is like a bail out to Maseru Dawning, Shi’s company that the government granted the monopoly to sell Lesotho’s fibre and then vehemently defended when it failed to pay farmers.

Finance Minister Moeketsi Majoro said the government will start paying the 1 000 farmers today.
The bail-out could be seen as just dessert to the government for plodding ahead with the wool and mohair regulations despite strong opposition from the farmers and other stakeholders who said they were not well thought out and were hastily implemented.

It also exposes government officials like Small Businesses Minister Chalane Phori who aggressively defended the regulations and brazenly fought in Shi’s corner.
Phori openly dismissed farmers who complained that Shi was either not paying them or pinching their monies. He also cheekily declared that he would rather be castrated than be forced to abandon the regulations. Shi was insisting that all was well even when farmers were saying they were not getting their cheques.

Now the government is admitting that some of the farmers were not paid. It puts the number at 1000 but some farmers say the numbers could be higher because “Shi was running a chaotic operation”.

“He wasn’t keeping proper records so he doesn’t know how much wool he sold and from which farmer,” said one prominent farmer who claims to have been following what he describes “as a fiasco”.
It is not clear where the government got the list of farmers who have not been paid. How the government plans to recover the money from the Shi is not known.

Majoro’s statement was silent on the nitty-gritties of the arrangement.
What is however clear is that taxpayers’ money is being used to pay a private investor’s debt.
Majoro however seems to tacitly admit that the regulations were bungled.
He said the government will “undertake a special study to understand the policy, technical, implementation and financial challenges that beset the localisation policy”.

He said after the study and consultations with all stakeholders the government will modify the policy “to cater for the smooth running of the industry” and ensure that farmers get more for their fibre. Ironically, this is precisely what the farmers and other stakeholders have been saying since 2018 when the government pushed the controversial regulations.

The minister also revealed that last year Lesotho’s wool generated M410 million, which is about half of what the country’s used to produce. Based on the broker’s standard four percent commission this means that Shi made about M16.5 million.

On Tuesday the principal secretary of the Ministry of Small Businesses, Lerata Pekane, told parliament’s economic committee he believes the government was right to introduce the regulations.
Pekane said the regulations, which have since been repealed, were better than the previous ones.

He alleged that the broker was sabotaged by bankers and other government institutions.
Pekane also said Shi failed to send some containers to China because of delays caused by the anthrax outbreak in South Africa.

Allegations that there was a plan to burn containers also prompted some transport companies to withhold their containers which also delayed some shipments, he said.
Pekane said the government has disbursed M10 million, of which M8 million will pay farmers and the remaining M2 million will be for a dipping levy.

Nkheli Liphoto