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.
LAA wins another international award
MASERU – THE Land Administration Authority (LAA) has scooped yet another international award from the European Society for Quality Research (ESQR).
The award was presented to the LAA at a function held in Barcelona, Spain, last month.
The award was for best outstanding business results, best practices, quality awareness and achievement by companies in the regional and global markets.
This is the second time that the LAA has received an international award.
Last year the LAA was honoured with an international award on technology.
The LAA Director General, ’Mataeli Makhele-Sekhantšo, said the LAA was established as an autonomous government body by the Land Administration Authority Act.
She said the objective was to modernise and improve land administration services and to reduce land transaction costs.
“The ESQR awards recognise organisations’ distinctive performance improvement, organisational excellence, customer focus and encourage them to share their best practice, experiences and knowledge with other organisations,” Makhele-Sekhantšo said.
“The recognition is independent assurance for organisations stakeholder and customers and it motivates the organisation employees to strive for sustainable excellence,” she said.
The Board Chairman, Ratšele Ratšele, congratulated the staff of LAA for their hard work.
However, he said as much as the organisation has improved, “there are still some challenges which need to be addressed by the government”.
“The organisation still seeks to extend the issue of licenses in all the places across the country,” Ratšele said.
“The act that regulates estate agents still need to be strengthened,” he said.
He said sectional title deals which distinguish the size of land to be registered still need to be reviewed to allow people who can afford to buy small pieces of land.
Local Government Deputy Minister ’Mathato Phafoli said the government is proud of this organisation since “it fulfills the mandate of the local government for administering the lease holding”.
Phafoli said the administration for the lease is not only crucial for regulating land, but also to boost the economy of the country.
“Land is the crucial treasure which needs to be registered with the LAA so that it can benefit even the coming generations,” Phafoli said.
She said one of the government’s strategic plans is to improve food security.
However, agricultural land is being utilised for industrial purposes, business premises and for household purposes.
“We are worried as to how Basotho will in the coming years acquire food,” she said.
She said immediate action must be taken because Lesotho could fail to grow food for its people.
Phafoli said the government is more concerned about agricultural land which is being utilised for industrial purposes instead of food production.
She said this exposes the country to high risk of food security failure.
ETL flies students to USA
MASERU – TWO Basotho students are off to the United States, thanks to Econet Telecom Lesotho’s HigherLife Foundation.
A farewell ceremony for the two was held in Maseru on Tuesday.
HigherLife Foundation is a social impact organisation that invests in human capital. It was formed by Econet founder Strive Masiyiwa and his wife, Tsitsi, in 1996.
The Public Relations Officer of Econet Telecom Lesotho, Puleng Litabe, said each year they reserve two percent of their budget for the foundation.
She said they have so far sponsored 524 students ever since the foundation was established in Lesotho in 2011.
“These two students will add up to 18 students who studied in America through the assistance of the HigherLife Foundation since its establishment.”
Litabe said of the over 18 students they have sponsored to study in America, five of them are now working in Lesotho while seven of them are working in the US.
She said one student is working in Canada and three students are in their Doctor of Philosophy studies.
The Econet Chief Executive, Dennis Plaatjies, said HigherLife Foundation sponsored the two students since their high school days at Soofia International School in Leribe.
He said after completing their Lesotho General Certificate of Secondary Education (LGCSE), the foundation took them to Waterford University in Eswatini.
He said the foundation has several programmes with education as the major priority.
He said they assist Grade A students who are vulnerable.
One of the students, Nthati Lehloenya, will be studying at the University of Oklahoma. She said he was raised by a single parent.
Lehloenya said life was not a walk in the park due to financial constraints her family had.
She was lucky to be introduced to the HigherLife Foundation which ultimately changed her life.
“The foundation did not only change our livelihood but it has also impacted our communities,” Lehloenya said.
She explained that while at school she won a M16 000 fund for a community project she was working on at work.
The other student is Mahali Mabesa.
The one will be studying engineering while the other will be studying mathematics and physics.
A parent to one of the scholars, ’Mamahali Mabesa, said in 2012 the financial problems forced her to transfer her daughter from the National University of Lesotho International School (NULIS) to Soofia International School.
She said it was still hard to support her daughter’s education. The teachers realised that her daughter was working so hard and deserved financial assistance.
“They said they could not let this talent go to waste because of our struggle hence they would try all means so that she could be assisted,” Mabesa said.
Meanwhile, Econet Telecom Lesotho yesterday in partnership with Gem Institute Lesotho launched a tree planting campaign for 1 408 apples and peach trees at 16 schools in the lowlands and highlands.
The Founder of Gem Institute, Mpho Letima, said one of their mandates is to encourage the youth to venture into entrepreneurship, technology and agriculture.
She said they have partnered with the school ever since 2016.
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.
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