ABOUT 5000 workers have been temporarily laid off because textile factories have not had orders for the past two months.
This is because the major buyers in the United States where waiting for their government to renew the Africa Growth Opportunities Act (AGOA) provision.
AGOA allows Lesotho and other countries to export their textiles to the United States without paying duty. AGOA was supposed to be renewed in September last year but President Barak Obama delayed had to wait until December for approval from the Congress.
During that four month delay buyers in the United States stopped placing orders with Lesotho textile companies. Nearly to 90 percent of Lesotho’s textiles are sold to the United States because of the AGOA provision.
Orders are usually made nine months in advance. Distressed textile companies are hoping that orders will start trickling in at the end of this month. However, in the meantime the sectors has send more than a tenth of its workforce home.
According to Bahlakoana Lebakae,Secretary General of United Textile Employees (UNITE), about 2000 to 5000 factory workers have been affected. Lebakae said between 80 and 85 percent of factories have been affected.“Some buyers are very sensitive. If there is something that they are not satisfied with and nobody gives any clarification they don’t put their orders,” Lebakae said.“However, this time around due to the uncertainty surrounding AGOA a lot of buyers did not place their orders at the expected time and by the time issues surrounding AGOA were clarified it was too late”. “Another issue is that the US through the Millennium Challenge Corporationwrote a letter to the Finance Minister last year showing that Lesotho should rectify the events of August 30, 2014,” he said.Lebakae said that was “a clear indication” that buyers under AGOA might have a second thoughtson placing orders with Lesotho factories. He said big factories that usually get a lot of orders and then share them with other firms did not foresee that there would not be enough orders. “Some workers have been home for over a month some two weeks, it differs from factory to factory”.Lebakae said employers being send home were not being paid.
“In our Labour Code we do not have a section catering for short times and layoffs. We only cater for when a worker is absent at work for personal reasons. The money for those days can be deducted from their salaries,” Lebakae said.
“Moreover, section 85 subsection 4 of the Labour Code says that the employer should pay the employee their salary if at some point the employer sends the employee home due to lack of work,” he said.
He said the employers should have planned “to ensure that there is work for employees todo, not to say they will not pay because employees were not going to work yet it was not their fault that they were not going to work”.
Lebakae some factories had approached unions to discuss the issue but most employers are not prepared to pay employees who are home.
“We will talk with them again after they go back to work but if they are still not willing to pay we will have to take the matter to the DDPR (Directorate of Dispute Prevention and Resolution) because that would be illegal and we have won a lot of cases of this nature”.
SeabataLikoti of Independent Democratic Unions of Lesotho (IDUL)said in one factory of 4 000 workers 3 800 were sent home.
“Employers were saying there were no orders and when we approached them they indicated that the prevailing investment climate was not appealing to a lot of buyers,” he said.
“Although we understand what employers are saying they should not get away without paying workers at all. They have families and people who are dependent on them.How will they survive if they do not get their salaries because of instances that were beyond their control?”
S’khulumi Ntsoaole, former Minister of Trade, said it is embarrassing that it has come to this “due to the prevailing political climate”.
“It is not the investors’ fault that they do not have orders. Buyers have resorted to some markets like the South East Asia because currently they do not have confidence in Lesotho. They are not sure that the products have been produced under suitable conditions,” Ntsoaole said.
“Buyers look for democracy and it goes deeper than having elections. They look at things like people’s freedom of speech, the use of rule of law, that courts are being respected and many other things”.
“If any of their requirements is not adhered to they start being reluctant to do business with such a country. So unless the political climate changes, unless the SADAC report recommendations are attended to, it will be difficult for buyers to want to do business with Lesotho.”
He said the American government “is still pleading with our government to fix governance issues. However, buyers have already made the decision for themselves to do business with some people while we wait to fix the situation”.
“As a result of this short time a lot of people are affected, employers do not have the money to pay workers and it is an uncomfortable situation for many,” he said.
’Maresetselemang Moloi, a mother of two, said she was devastated last week when told to go home because there was no work at the factory.
“In January we earned little because we did nothave a lot of working days. Now we are not going to earn again. Winter is approaching, schools just re-opened and we have to start paying fees for this quarter. How will we do that if we are not working?” Moloi said.
The textile industry in Lesotho employs over 40 000 people most of them being women.
The garments industry produces approximately 90 million garments a year most of which are bought outside the country by the American, European and SACU markets.
It is the biggest private sector employer.
Why invest for the future
AN investment plan forms a critical pillar of a financial plan, says Tokiso Nthebe, a local author and financial services adviser.
Nthebe, the founder of TKO Financial Wellness and Advisory, says when people invest, they can use their money to buy assets that will increase in value over the long term.
He says these assets can help them build wealth.
“When you invest, your money starts to work for you by providing returns that will beat inflation,’’ Nthebe says.
Nthebe says there is a huge difference between saving and investing.
He says investing requires that you take some level of risk in exchange for an expected return or growth.
Nthebe says Basotho should consider many factors before they decide to start investing.
“It is important to have a clear strategy that guides your investment decisions and to work with qualified professionals,” he says.
Nthebe says one should consider their growth mind-set, investment goals, and their risk tolerance.
In addition, one should consider what kind of growth or return they expect.
He says one should find out whether the institution they invest in is licensed or regulated and how long one should invest.
Nthebe says one should further consider what risks are associated with the investment option and whether there are any associated costs.
He says it is also important to remember that investments take time.
“There are no short cuts to building wealth. Do not fall prey to get-rich-quick schemes,” he says.
Moreover, Nthebe says the investment landscape comprises commercial banks, asset management companies, and insurance companies.
He says each provides different financial products and services.
Nthebe says the Central Bank of Lesotho (CBL) also offers investment solutions such as treasury bills and treasury bonds that Basotho can consider.
Depending on your investment goals, he says financial service providers have a wide range of investment solutions to choose from that cater for short, medium, and long-term goals.
“I encourage Basotho to do thorough research and seek professional advice before making financial decisions,” he says.
Vince Shorb, the United States National Financial Educators Council CEO, writes that “many of the financial problems people face today started when they were young and making their first financial decisions”.
Shorb further says taking on too much debt, not investing early, and failing to plan can take one decades to recover from such.
However, it takes financial literacy to make good decisions, he says.
Financial literacy has been perceived as a tool that gives you the opportunity to be confident and empowered to live the quality of life you have worked hard for.
Shorb says one of the wisest decisions one can make to prepare for the future is to invest.
Investment has been defined as the commitment of funds with a view to minimising risk and safeguarding capital while earning a return.
When Covid-19 hit and the government shut down all gatherings in April 2020, there seemed no way out for ICONICS (Pty) Ltd, a budding events management company based in Leribe district.
They had two options: shut down or innovate to keep the business going.
They chose the latter.
Three years down the line, ICONICS (Pty) Ltd has completely transformed itself from an events management and public relations company into a manufacturing company that is now the envy of Lesotho.
“The closing of events translated into the closing of our business,” Rapitso Mosebetsi, one of the co-founders of ICONICS (Pty) Ltd told thepost this week.
Mosebetsi established ICONICS in partnership with Tumo Mahapa.
Faced with collapse, Mosebetsi say they began buying Personal Protection Equipment (PPE) such as surgical gowns, disposal coveralls and safety apparel for resale.
Eventually they decided to manufacture the PPEs and safety clothing. That was the turning point.
But since the company was already down, Mosebetsi says diversification was a hard nut to crack.
“It became quite a long journey (for us),” he says. “We had to come up with something new for the industry.”
He says they had to overcome stiff competition from giant companies and come up with something unique that would set them apart.
“That was how thermal heating apparel was born,” he says.
“We are the first company to produce thermal heating apparel,” he says.
The company manufactures thermal clothing, which is electric clothing, using power banks of five voltages.
“The voltage is so low to electrocute a person,” he says.
The clothing also has a power button to turn it on and off.
Mosebetsi says the thermal heating apparel is on corporate clothing as well as high-visibility clothing.
Mosebetsi says they started the journey with the support of several organisations, such as the Lesotho National Development Corporation (LNDC) and the Basotho Enterprises Development Corporation (BEDCO), to build their capacity.
Mosebetsi says they also got mentorship support from organisations such as the Global Entrepreneurship Network.
The results of years of hard work are now all out for everyone to see.
In 2022, ICONICS won the M100 000 Business Plan Competition hosted by BEDCO.
This grant enabled them to acquire land and buy five more industrial machines.
This did not only enable the company to increase their production to 100 worksuits a week, but it further created permanent jobs for five people as well as three temporary workers.
Last year, the company took part in the Exporter of the Year event hosted by the LNDC in partnership with the Lesotho Post Bank and the United States Agency for International Development (USAID).
Mosebetsi says they won the award for Lesotho’s most innovative and versatile exporter.
He says this did not only put them in the spotlight, but it further encouraged them to do more.
ICONICS was announced as the best exporter of the year at an event hosted by the LNDC earlier this month.
Mosebetsi says this made them proud, as the award is aligned with their vision.
The award further gives the company an opportunity to participate in the regional competition.
He says this opportunity will further give the company a competitive edge in terms of production locally and globally.
“It will be an honour if we can win the regional competition,” he says.
In terms of markets, Mosebetsi says the company has had the opportunity to list their products in the African Trade Market since 2020 with the support of USAID.
This is an e-commerce platform that opens up the market for African countries to list their products.
Mosebetsi says the company did not only get publicity, but the client database also increased.
He says they moved from supplying individuals only to big companies, different organisations, and different government departments such as those involved in mining and health.
Considering the decline of the Lesotho textile industry, Mosebetsi says their secret to success has been their being innovative.
“Our sustainability is matched with innovation,” he says.
Mosebetsi says it also requires patience coupled with lots of investment in terms of time.
“Rome was not built in one day,” he says.
He says working as a team also plays a critical role.
Despite their achievements, Mosebetsi says the market for innovative industries is one of the hardest nuts to crack.
He says the company is in the process of not only making their products known but also educating people about their safety.
Mosebetsi says the other challenge is the decline of the South African Rand as compared to the US Dollar.
He says some of their materials are sourced from China.
Therefore, it is more expensive to buy such materials.
ICONICS is not only seeking to make their brand well known globally, but Mosebetsi says they are also seeking to create more jobs for our youths.
LetsGo and Win!
LETSHEGO Financial Service has launched the LetsGo and Win loan consolidation campaign where customers win weekly and monthly cash prizes of up to M150 000.
The campaign, which was launched yesterday, will end on November 8.
The LetsGo and Win campaign rewards customers for consolidating their loans.
It is aligned with Letshego Lesotho’s version to offer competitive products that cater for the evolving needs of its customers.
The financial services company operates in Lesotho, Botswana, ESwatini, and Zambia.
The Marketing Manager and Business Partner, Tšotetsi Seema, said Letshego Lesotho is committed to delivering increasing value and options to customers.
Seema said this programme is a testament to that commitment.
“The campaign invites customers to consolidate their loans into one low and easy repayment with reduced rates and they stand to win weekly and monthly prizes,” Seema said.
“The weekly cash prizes will be won by lucky customers randomly selected and notified through Letshego Radio shows,” he said.
Additionally, he said two lucky customers will be randomly selected each month and given a chance to spin the wheel of fortune with a chance to receive a maximum of M20 000 each.
“The loans consolidation campaign makes it easier for customers to choose Letshego Lesotho as their preferred financial services partner.”
He said this innovative campaign aims to help individuals streamline their debt payment while benefiting from reduced interest rates.
“Debt consolidation can help customers get a lower monthly payment, pay off their debt sooner, increase their credit score and simplify their life.”
Letshego Lesotho’s Head of Sales, Distribution and Marketing, Motebang Moeketsi, said managing multiple loans can often be overwhelming with varying interest loans due dates and terms.
“The campaign addresses this challenge by combining multiple loans into a single, easy to manage repayment plan,” Moeketsi said.
He added that this simplification not only eases the financial burden on borrowers but also potentially leads to significant savings over time.
Moreover the new consolidation campaign invites customers to take advantage of their best-in-class financial services provided through Letshego Lesotho branch network and digital platforms.
“Letshego Lesotho is committed to increasing financial inclusion through its efforts to serve underbanked communities, promoting financial literacy and delivering positive social impacts for its customers and communities.”
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