Breaking Lesotho’s chains of economic colonisation

Breaking Lesotho’s chains of economic colonisation

IN October last year, Lesotho celebrated 50 years of independence from British colonisation. A large feast was had, pleasantries were exchanged and all in all, the event was a success.
But when one stops to think about it, just how independent are we? How far has the country come in terms of economic growth and self-sufficiency over the last fifty years?
Lesotho has for a long time now been a net importer with close to 90 percent of all products in the country being imports from other countries mainly South Africa.

What this means is that the country cannot to any degree sustain its own population and has to depend heavily on others to sustain its own people, which begs the question once again: Just how independent are we?  It is not hard to see the vulnerable position this puts our country in. If for instance our biggest importer, South Africa, has a food shortage for any reason, the effects on our own country would be devastating.

We find ourselves in this predicament not because of a lack of resources but rather a culture of consumption over production that has taken root in our society.
Unfortunately our dependence on others is not limited only to production, it stretches even further into other sectors.

Since its inception, the Loti has been pegged on a one-to-one fixed exchange rate regime with the South African Rand. What this means is that whatever happens to the rand in the international market is sure to have a significant effect on the Loti.

Very recently, the value of the Rand experienced a downward trend the likes of which had never been seen and as a result inflation went through the roof, the effects of which could be felt in Lesotho as prices of food rose rapidly and presented a lot of problems for the cash trapped population.

When situations such as these occur, the very entity that is mandated with protecting us from such inconceivable hikes in inflation which is the Central Bank is helpless to do anything about it and has to look to South Africa to bring the inflation under control since our inflation varies hand in hand with theirs, one could even say we import inflation from our neighbours.

As it stands right now, the business sector is saturated with foreign owned corporations and franchises with Basotho owned businesses claiming a very small portion of the market share.
Several initiatives such as the M50 million partial grant scheme have been made by the government in an attempt to spur entrepreneurship but have so far been met with very little success, leaving the situation largely unchanged.   Unfortunately it is important now more than ever for Basotho to venture into entrepreneurship not only to reclaim the private sector but also to curb the high unemployment rate that prevails in the economy.

A similar situation of foreign domination can be seen in the manufacturing and mining sectors; both of which are crucial in terms of their contributions to GDP.
In terms of the manufacturing sector, the textile factories are owned entirely by the Chinese and account for a very sizeable portion of the sector.
If the owners of the factories were ever to close them down in pursuit of more lucrative ventures elsewhere, tens of thousands of Basotho would be unemployed, approximately 38 000 to be more precise.

The very same can be said about the mining sector, of which Lesotho owns barely 25 percent of its mining ventures, meaning that we are the ones who benefit the least from our own mineral resources while the bulk of the benefits are reaped by the UK and South African based entities such as GEM, Firestone and Kimberlite that own the majority of the country’s mining operations.
This foreign domination means a large chunk of profits is expatriated to other countries instead of being re-invested into the country.
The way forward from here is not a clear path but the 50 year mark is as good a point as any from which to start.

Much like those whose struggles for our independence are documented in the history books, we too must stand up to fight for the freedom of our economy.
The fact that Lesotho remains standing even after all these years of its resources being siphoned out serves as a testament to what a powerful economy it can become. It is time to see the potential of our economy like the world sees it and take it back into our hands.

No single stakeholder can achieve this alone but together it is possible so this means government and the people of Lesotho should work hand in hand to push our economy forward.
This means that institutional reforms should take place to do away with old systems that are no longer useful now as well as those that were never intended to benefit the country as much as they were meant to meet the needs of selected individuals.

Entrepreneurship must be instilled into the minds of Basotho from as early as possible so as to eventually balance out the ratio of local to foreign business ownership and hopefully tip it to our side as time progresses.
Mistakes will be made along the way and risks will be taken but the day will come when Lesotho will rise from its economic colonisation and become a self-sufficient country.

l    Katiso Thatho is a third year Economics student at the National University of Lesotho

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