Business

Casting away chains of poverty

Published

7 years ago

October 20, 2017

MASERU – FOR decades, Basotho farmers were dependent on a South African wool and mohair brokers’ cooperative society, Boeremakelaars Koöperatief Beperk (BKB), to sell their wool and mohair. The BKB would make use of shearing houses built by the government of Lesotho throughout the country to collect wool and mohair for sale in London and other international markets.

BKB would in return pay the farmers after deducting its commission. In most cases, the Lesotho farmers would be left unhappy after accusing BKB of charging exorbitant commissions. But that is set to come to an end, thanks to a new Australian investor, Stone Shi, who has pumped in M37 million in the construction of a 10 000 square metre shearing centre in Thaba-Bosiu for the Lesotho National Wool and Mohair Growers Association.
The association raised M4 million for the project.

Shi has 25 percent shares in the shearing centre while the association holds the remaining 75 percent shares.
Shi is the CEO of the shearing centre. With the centre fully operational, brokers such as BKB will no longer be required. Lesotho’s farmers will, for a change, have direct access to the markets through their own company.

The shearing centre was officially opened last week. Before the association and Shi joined hands to establish the shearing centre, BKB used a network of shearing houses erected by the government throughout the country. The agents would then collect the wool and sell to international markets.
BKB would in return pay the farmers after deducting its commission.

Now the Lesotho Wool Centre, owned by the farmers themselves, will be the one directly selling to the international markets without the services of brokers. The association has always enjoyed the use of 114 shearing sheds provided and staffed by the government and the wool would be collected by BKB to auctions.

Lesotho’s wool and mohair is primarily handled by BKB which presents it to the auction floors in Port Elizabeth and Durban.
BKB works on commission and wool and mohair is exported in the raw, un-scoured state (as is most of South Africa’s wool and mohair).
Due to quality considerations, Lesotho’s wool and mohair needs to be blended with other wool types in order to produce a specific “top” of a particular type demanded by spinners.

This blending process can only be done at the time of scouring – tops cannot be blended after scouring.
Pure lots of Lesotho wool and mohair, on their own, are generally not suitable for making tops.
BKB, in some instances, also re-grades and repackages Lesotho wool and mohair before it is presented for auction.
BKB provides the association with a comprehensive analysis of wool quality, quantities, shearing shed of origin, number of producers, numbers of sheep and goats shorn, auctions held and prices received.

A recent study by the Wool and Mohair Production Project says individual producers are paid directly by the broker.
They receive the international price for their product “and there is complete transparency in the transaction”.
“This wool passes through the association but wool lots retain the original grower’s identity to the auction floor and brokerage margins and transport and handling charges are minimal and completely transparent,” the study says.

Shi was roped in following a September 2014 project proposal supported by the IFAD, titled Wool and Mohair Promotion Project.
The project included a value chain study which identified the following issues that needed to be addressed in order increase overall productivity, increase financial returns from wool and mohair and maximize the project’s impact on reducing poverty and increasing employment:
l) The increasing degradation and low productivity of the rangeland in the face of increasing climate variability;
l) The low productivity and poor quality of the sheep and goat flocks;

l) The poor standard of wool and mohair handling – shearing, classing and presentation for sale;
l) The need to further develop cottage industries to produce higher value items for the high end of the market; and
l) The need to address the overgrazing through improved rangeland management.

In its quest to come up with a solution, the association raised M4 million to set up the Lesotho Wool Centre.
Small Businesses Development Minister Chalane Phori told thepost on Tuesday that this is meant to increase marketing value for farmers by exporting wool directly to international markets while cutting off middlemen.
This will see Basotho retaining better profits.

They can also take part in influencing the market price of farmers’ commodities, Phori said.
He said Lesotho was losing 20 percent before the new arrangement, which translated to about M50 million per year.
He said the conception of LWC was created by the association and Maseru Dawning in August 2014.

The agreement of LWC was signed in January 2016, the Joint Venture was set up in April and in July 2016 they got the trade licence with the registration number JY 2016 / 0014. In December 2016 they got the site lease and they started building LWC in April 2017.
“The wool store has 10 000 square metres which is the biggest woollen project in Africa,” Phori said.
“They have completed the construction of wool store and office,” he said.

Shi told thepost that he has been dealing with wool and mohair for the past 17 years in Australia “where Lesotho’s wool and mohair is highly valued due to its quality”. “Lesotho’s wool and mohair is combined with the long Australian’s mohair to make the best quality which is (popular) worldwide,” Shi said.

“Lesotho is a small country but has potential of producing more and high-quality wool and mohair hence i found it important to invest in Lesotho,” he said. “The agreement signed is going to be a long-term agreement as I am not willing to withdraw my agreement like other investors who did due to (Lesotho’s political) instability,” he said.

LWC will seek to minimise direct marketing costs such as transport handling costs and other selling costs.
“As a way of minimizing costs the company aims to eliminate the middleman and several handling points of the products,” Phori said.
“LWC guarantees the actual payment to farmers will be much more than before,” he said.
“In this way clients of LWC will realise high proceeds each season.”
Phori said he is proud that the LWC will guarantee employment to more than 100 locals when it is fully functional.
“Shi’s investment amount is huge, meaning he means nothing other than business but what is most pleasing is he has just 25 percent while Basotho have 75 percent in this agreement,” he said.

“The action says Lesotho’s economy is shifting upward a little bit,” he said. The Lesotho National Farmers Union (LENAFU)’s spokesman, Taoana Lephoto, said the venture is of great significance as oil that will be secreted while cleaning the wool will be collected and sold by Basotho.

“If Basotho would leave aside corruption, this deal is going to take Lesotho’s economy to another level,” Lephoto said.
“It is embarrassing for Basotho to call themselves ‘Ma-apara-kobo’ (those who wear the blanket) without even a single lesson of how to make that blanket yet they produce the wool and mohair that are used as materials for weaving blankets,” he said.

“It’s high time Basotho make the blanket with their wool and mohair produced in this country,” he said.
Masupha Nkopane, a farmer rearing 200 merino sheep from Matsieng, said he makes M50 000 per annum after shearing the sheep.
Nkopane said he is expecting the money to double after the establishment of the shearing centre in Thaba-Bosiu.

“The money we used to receive for our wool and mohair did not match the quality of our products,” Nkopane said.
“Because of Lesotho’s altitude, our wool is of high quality and clean, making us the most well recognised country worldwide in terms of wool and mohair production,” he said.

Prior to the establishment of the association the Basotho wool and mohair producers were confronted by low market returns and lack of market information, according to Nkopane. BKB was the only recognised trader who had the monopoly of buying their produce and marketing it to Europe.
Currently the main buyers of Lesotho wool are China, India, Czech Republic and other European countries.

There are about 37 500 sheep and goat farmers who rear a combined estimated four million sheep and goats.
The farmers employ about 75 000 herd boys.

Senate Sekotlo

Business

The road to recovery

Published

1 day ago

April 30, 2024

The Post

THE Principal Secretary of the Ministry of Trade, Industry and Business Development, Thabo Moleko, says cohesion among key stakeholders is critical to the revival of the textile sector.
Moleko was speaking at two consultative meetings held this week as part of the Expanding Enterprises Participation in Textile and Clothing Global Value Chain project.

The International Labour Organization (ILO) and the International Trade Centre (ITC), the technical partners in the project, coordinated meetings.

The consultations are a critical step towards addressing the concerns and priorities of employers and workers in Lesotho’s textile industry.

Held on Tuesday, the first meeting brought together employers in the sector.

Trade unions met on Wednesday. A joint meeting of businesses and unions will be held today. The textile project is a subcomponent of the Competitiveness and Financial Inclusion (CAFI), a government and World Bank-funded project that seeks to build a vibrant and sustainable private sector that delivers shared economic growth.

Moleko told both meetings that the consultations are critical to the successful implementation of the Enterprises Participation in Textile and Clothing Global Value Chain project which seeks to revive the textile industry.

He said Lesotho’s textile sector is currently in the doldrums as it struggles to recover from the effects of the Covid-19 pandemic, wars across the globe, supply chain problems, economic challenges, declining consumer confidence and rising inflation.

In addition, Lesotho faces stiff competition from countries like Kenya, Ethiopia, Mauritius and Madagascar which have vibrant textile sectors.

Moleko said the growing power of global apparel-producing giants like China, Bangladesh, Cambodia and Vietnam has made the prospects of Lesotho’s textile industry bleaker.

He said the project is meant to reposition the sector so it can compete in the global market. The dialogue, he said, creates the platform for Lesotho to “take advantage of new opportunities emerging from the reorganization of GVCs (Global Value Chains).”

The ultimate goal, he noted, is to expand business opportunities to “reach out to new markets, improve enterprise-level productivity and employment conditions”.

His sentiments were echoed by the Principal Secretary of the Ministry of Labour and Employment, Palesa Matobako, who spoke at the same meetings.

Matobako said the meetings were meant to ensure that the project achieves its objectives of enhancing productivity, improving employment conditions and enhancing the sector’s overall competitiveness.

“The ultimate goal of this initiative (the project) is to expand enterprise participation in the global textile and clothing value chains,” Matobako.

The project will focus on workplace collaboration, total quality management, resource efficiency and cleaner production, occupational safety and health and better workforce management.

Staff Reporter

Business

Jobs galore for Lesotho

Published

3 weeks ago

April 9, 2024

The Post

94 000 jobs.

That is what the Millennium Challenge Account (MCA-Lesotho) will create in the next 10 years, according to Prime Minister Sam Matekane.

The MCA-Lesotho was created by the Lesotho parliament last year after the United States’ Millennium Challenge Corporation (MCC) found Lesotho eligible to receive development funds.

The MCC gives development grants to poor countries that respects democratic principles and human rights.

The MCC has unlocked a staggering US$322 million (over M5 billion) to the government of Lesotho after the country enacted three laws the protect people’s basic rights this week.

Matekane advised youths to visit MCA-Lesotho offices to understand how best they can benefit from the fund and the projects that will be financed.

The MCC’s investments are aimed at increasing the availability of water for household and industrial use, enhance watershed management and conservation methods, rehabilitate health infrastructure and strengthen health systems, and remove barriers to private investment.

The MCA-Lesotho’s Health and Horticulture Compact seeks to assist the country in unlocking equitable and sustainable economic growth in partnership with the private sector by addressing key constraints to growth.

Matekane said the job creation potential of the horticulture project alone is estimated at 4 000 jobs.

This excludes indirect jobs that will be created through packaging supplies, logistics, cold chain activities as well as the processing of the output.

“Let us all be ready and ensure we spend all the funding that is available,” Matekane said.

He said the money is going to be invested in agriculture, trade and industry, value chains, infrastructure development, tourism and creative sectors.

“The Compact has come at a critical time when the country is in dire need of financial injections to revive the economy,” he said.

“This second Compact forms the core of Lesotho’s private sector-led economic growth, recovery and job creation agenda.”

He said the MCA staff should work diligently, to implement this Compact.

“There are several Basotho businesses out there that are eager to seize the opportunities that the Compact brings,” Matekane said.

“Serve them with integrity, accountability and dedication.”

Matekane said the government has established the Cabinet Sub-Committee on the Compact which is under the leadership of Deputy Prime Minister Nthomeng Majara.

The sub-committee is mandated to ensure that the government provides overall oversight, strategic direction and support for successful implementation of the Compact.

He said he expects the MCA-Lesotho to ensure the full implementation of the project within the next five years.

“Our economy needs this capital injection to boost productivity and job creation,” Matekane said.

Matekane said the government had to enact three pieces of legislation which were necessary to support the investments that the MCC is making.

The enacted laws are the Labour Code Amendment Bill, the Administration of Estates and Inheritance Bill and the Occupational Safety and Health Bill.

Majara Molupe

Business

Bank spearheads career expo

Published

4 weeks ago

April 2, 2024

The Post

Standard Lesotho Bank will tomorrow host a career expo at the ’Manthabiseng Convention Centre for high school students who will sit for their final exams this year.
The 14th Annual Standard Lesotho Bank Career Expo was launched in Mokhotlong on Monday where the Lesotho Highlands Development Authority (LHDA) welcomed students in areas around the Polihali Dam construction site.

On Tuesday the expo was at the Butha-Buthe Community High School, yesterday it was at Assumption High School in Teya-Teyaneng while today it is in Quthing at Holy Trinity High School.

The five-day nationwide event is dedicated to connecting ambitious Basotho youths with exciting career opportunities.

Standard Lesotho Bank says it’s career expo “is a cornerstone of the bank’s commitment to empowering Basotho youth and shaping the future of Lesotho’s workforce”.

The 2024 edition of the event is the 14th where the bank is now the headline sponsor of this important expo that reaches about over 10 000 students countrywide.

The expo promises to be an even better offering where over 35 institutions of higher learning from Lesotho and South Africa as well as professional bodies will explain different career options to Basotho students.

Standard Lesotho Bank communications manager, Manyathela Kheleli, said students in Mokhotlong did not only learn about different engineering disciplines but got to appreciate engineering in action at Polihali.

He said it was a lifetime experience for students from Mokhotlong, “thanks to the collaboration with LHDA, who are fully responsible for the Polihali leg of the event”.

There were also motivational speakers from different professions in the bank and other selected institutions.

Key influencers in the football fraternity, former Likuena captain and now Corporate Responsibility Manager at Letšeng Diamonds, Tšepo Hlojeng, and former Orlando Pirates dribbling wizard, Steve Lekoelea, are among the influencers that have been invited to address the students.

The event is a sponsorship initiative under Personal and Private Banking that is open to all youths, communities, and individuals, where the bank intends to use this event to drive the new Youth or student Customer Value Proposition and attract high school students to open accounts ahead of their enrolment into tertiary institutions.

The objective of this sponsorship is to first create an environment where future leaders of Lesotho will be nurtured and informed of top career choices that demonstrate various skills requirements for the growth of Lesotho’s economy.

Secondly, the career expo is a clear demonstration of the bank’s intention to put youths at the centre of its initiatives.

This position is shown by the bank’s initiative to not only develop special products for youths, such as the Youth Account but also through several initiatives that promote youth empowerment. These include the bursary scheme and the Bacha Entrepreneurship Project.

“We are more than a bank for our youths, but a good corporate citizen and a partner for the education for Basotho,” Kheleli said.

“We believe that as we grow our youths, they will become assets to this country and by extension, develop into a feeder market for our banking products when they enter the job market,” he said.

The bank has invested M150 000 towards sponsorship of the annual Career Expo.

Staff Reporter