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LESOTHO wants to brand itself as an investor-friendly destination. At the Lesotho Investment Forum in London last week, a ministerial delegation highlighted the country’s effort in diversifying its economy, presenting a host of investment projects, ranging from renewable energy and agriculture to information communication technology and tourism as well as the burgeoning diamond mining industry. “There are certain things that we cannot change,” said Minister of Trade and Industry Joshua Setipa, speaking at the forum and referring to the country being landlocked. “But what we can do is improve efficiency, bringing down the cost of doing business.”Setipa spoke to a journalist from the Global Trade Review on the side-lines of the forum about what else Lesotho wants to achieve and what challenges it faces in trade and investment.

 

You became minister last year. What goals would you like to achieve by the end of your mandate?

We have a number of priorities which fall in different categories of our work. If we talk about the policy reform side, we have a policy agenda that includes reviewing certain pieces of legislation, such as consumer protection, putting in place new legislations, putting in place a new investment policy and a new industrial policy, both of which we’ve done, and working on an overall trade policy, which we will begin working on in the next 2-3 months.

What are the priorities for your trade policy?

The priority is on how to use trade to develop our development strategy, so anything that would help us reposition ourselves and have the right mix of trade policy to facilitate growth, which of course drives development, is good. We also want to use that to drive our capacity to trade. At the end of the day a brand new shiny trade policy in place is useless if we cannot trade, so we need to improve our capacity to trade.

How does that relate to enabling access to finance?

Financing is an integral part of that strategy. Over 80 percent of our economy is made up of small and medium enterprises (SMEs) and those SMEs need access to trade finance. Being a small market, trade finance is very costly. It’s not possible for the average company in Lesotho to walk into a bank and get a letter of credit. Banks find them highly risky so they’ll only work with them if there is an intervention by the state or another institutional bank to mitigate that exposure.

Banks in Lesotho are sitting on so much liquidity of government resources, but they are still not lending. Clearly the solution is not on the banking side anymore, it is on alternative ways to mitigate risk or to provide that type of financing. We’ve got innovative things that can be done, such as warehouse receipts systems that hedge against the actual harvest, which is what you do for clients who do not have balance sheets at the moment. Those are the type of interventions that we need.

One of the most promising sectors in Lesotho is the diamond mining industry. Zimbabwe has recently pushed for nationalisation: what is your strategy to develop the sector?

I don’t think the idea of nationalisation has ever crossed our minds and I don’t think in 2016 we should even be talking about that. Our objective is to drive increased investment into the sector, not just foreign direct investment, also domestic investment mobilisation. Our preoccupation is to continue to improve the value proposition.

South Africa, one of your most important trading partners, is going through a period of economic downturn. How does that affect Lesotho?

Unfortunately for us, all our major economic partners are going through a rough patch. The slowdown in the US saw a very big decline in the demand for our products, particularly in clothing, so we felt it. South Africa is our second-biggest export market for clothing and 35 percent of our exports go to South Africa. We do see a decline in that market so we feel it.

Which other markets are you turning to?

We are looking at non-traditional markets. I was in Poland, I am going to Turkey: we are going to new alternative markets to try mitigate all that. I think the US is saturated.

How does the US negotiation of big trade agreements like the Trans-Pacific Partnership (TPP) affect your trading relationship with the country, with whom you enjoy preferential trade relations under the African Growth and Opportunity Act?

Our preliminary assessment is that TPP is bad news for us. The TPP includes a country like Vietnam, which exports the same line of products that we export to the US and is already much more competitive that we are. What the US gives on one hand it takes with the other hand.

Lesotho is one of the 10 African countries to have ratified the WTO’s Trade Facilitation Agreement. How important is the WTO for a country like Lesotho?

For countries like Lesotho the WTO is the only insurance policy we have that we won’t be trampled and run over. It levels the playing field, it gives us the same weight and the same attention that the US gets. — Global Trade Review

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LEC to switch off households over debts

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MASERU – The Lesotho Electricity Company (LEC) will from Tuesday next week begin switching off clients who owe it money.

The LEC issued a seven-day ultimatum to all customers who owe it on Tuesday last week. The deadline ends on Monday.

It is expected that the LEC will begin switching off households that have defaulted.

The state-owned power company, however, is not going to touch any government department or business entities that owe it on grounds that they are in payment negotiations.

The LEC move comes barely two weeks after it cut electricity supplies to the Water and Sewerage Company (WASCO) thus causing it to fail to pump water to communities countrywide for more than two days.

The LEC says it is owed close to M200 million by government departments, businesses and individuals.

The LEC spokesman, Tšepang Ledia, told thepost that the government and the businesses will not have their electricity cut because they are in negotiations.

“We are in negotiations with the government and businesses and hopefully they will pay,” Ledia said.

“We advise the ordinary people to pay their debts before the 20th of March 2023 or else we cut the services,” he said.

The LEC says it is running short of funds for its daily operations.

In December last year the company increased power tariffs by 7.9 percent on both energy and maximum demand charges across all customer categories for the Financial Year 2022/23.

Last week the LEC boss, Mohato Seleke, said postpaid consumers and sundry debtors owe the company M169.4 million.

He said unless the debtors pay he will be unable to buy electricity from ’Muela Hydropower Project, Eskom in South Africa and Mozambique’s EDM.

This, he said, could cause serious load shedding in the country and could be devastating for businesses.

Seleke said the LEC spends M630 million monthly to buy electricity.

“If postpaid consumers do not settle their debts this could prevent the LEC from being able to buy electricity which can lead the country to encounter load-shedding,” Seleke said.

Seleke said collecting debt from government department ministries was a challenge as there is an understanding that since LEC is a state-owned company, it will continue supplying government agencies with electricity and they will settle their bills when they have funds to do so.

Seleke said the LEC has lost M21 million to vandalism during this financial year.

Relebohile Tšepe

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Bumper payout for former mineworkers

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MASERU – AT least 11 316 current as well as former mine workers are set for a bumper payout after Tshiamiso Trust began disbursing the first billion Maloti to workers who are suffering from silicosis and tuberculosis.

The payment comes two years after Tshiamiso Trust began processing claims for the historical M5 billion settlement agreement between mineworkers and six gold mines in South Africa.

Speaking at the payment announcement in Maseru last week, the Trust’s CEO, Lusanda Jiya, said it has been two years since they officially began accepting claims.

“Our people come to work every day with the mission of impacting lives for the better, and the first billion rand paid out to over 11 000 families is just the beginning,” Jiya said.

“We know that there is no compensation that will ever be enough to undo the suffering endured by mine workers and their families,” he said.

“However, we are committed to deliver our mandate and ensure that every family that is eligible for compensation receives it.”

Jiya said the Trust is limited both in terms of the time in which they can operate, and the extent to which they can assist those seeking compensation.

Broadly speaking, the eligibility criteria include among others that the mineworker must have worked at one of the qualifying gold mines between March 12, 1965 and December 10, 2019.

Secondly, living mineworkers must have permanent lung damage from silicosis or TB and deceased mine workers representatives must have evidence that proves that they (the deceased) died from TB or Silicosis.

Tshiamiso Trust has a lifespan of 12 years, ending in February 2031.

Over 111 000 claims have been received to date, through offices in South Africa, Lesotho, Botswana, eSwatini, and Mozambique.

The Trust is working with stakeholders in these countries and others to mobilise its efforts and expand operations.

The history of silicosis in South Africa goes back to the late 1880’s when the first gold mines began operations.

The gold was stored and locked in quartz, a special rock that contains large amounts of silica.

Crystallised silica particles can cause serious respiratory damage if inhaled.

In the earlier days of gold mining, dust control, health and safety standards and the use of PPE (personal protective equipment) were not as advanced as they are today.

Tshiamiso Trust was established in 2020 to give effect to the settlement agreement reached between six mining companies.

The companies are African Rainbow Minerals, Anglo American South Africa, AngloGold Ashanti, Harmony Gold, Sibanye Stillwater and Gold Fields.

The settlement agreement was reached and made after a ruling by the Johannesburg High Court as a result of a historic class action by former and current mineworkers against the six gold mines.

Justice for Miners is a coalition of interested parties in the mining sector launched at the Nelson Mandela Foundation in Johannesburg in 2020.

The Johannesburg High Court approved the setting up of the Tshiamiso Trust to facilitate payment by the companies to affected miners.

Keith Chapatarongo

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Farmers cry over cost of livestock feed

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MASERU – Lehlohonolo Mokhethi is a farmer who has been running a successful poultry business, thanks to a small loan he got from a local bank.

He now has 300 chickens.

He says his vision is to rear 5 000 chickens by 2025 and employ 30 youths. But he is now grappling with a new challenge: the ever increasing cost of chicken feed.

That is threatening the viability of his business.

“The biggest challenge is that food prices increase every day, feeding is expensive,” Mokhethi said.

“It is quite difficult to make profit in business if each and every day food prices increase. Today I am buying a bag of food with a certain amount then the next day the price has increased,” he says.

“Our customers fail dismally to understand that food has increased and the Chinese are taking our market because they sell at a low price thus I run at a loss.”

Last week, a top attorney in Maseru who is also a prominent farmer, Tiisetso Sello-Mafatle, called a meeting for farmers to discuss these challenges.

She says the government must regulate the prices of livestock feed.

That is critical if the farming business is to succeed, she says.

Attorney Sello-Mafatle says farmers must come up with a structure for livestock feed prices which they would present to the government for gazetting.

“We should state our regulations and give them to the government to make everything easy for both parties because we cannot wait for the government to make regulations for us,” Sello-Mafatle says.

She adds that “farmers should be bullish about what they want and never have fear endorsing new things”.

“I will not be challenged or cry (because of) what life throws at me but I will cry when things are not happening the right way,” she says.

Mafatle says farmers need to know who they are and know the capabilities they have.

“This will help a farmer in becoming the best in any field they are in once they are confident about themselves,” she says.

Karabo Lijo, another participant, said they have to influence the cost of inputs in agriculture, especially livestock feed.

“We have to go back to cost-price analysis where as farmers we are able to derive the selling price and the break-even point in our production,” Lijo said.

“We can also derive the stable or constant mark-ups on our products,” he said.

“We need to do research to increase the ability to produce byproducts which are likely to have the longest shelve life,” he said.

The meeting urged farmers to diversify their products by introducing such things as mushroom farming. They said mushrooms can grow very well in Lesotho due to its favourable climate.

The farmers also demanded that there should be regulations on how land can be sold or borrowed in Lesotho.

Tholoana Lesenya and Alice Samuel

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