The 3rd of June marked a very important day in South Africa: a day the ratings agency affirmed SA’s ratings but kept its negative outlook.
But it is not yet time to celebrate. The euphoria might be short-lived. What only happened is, SA was given a chance to tighten its belt to avoid a downgrade later.
The finance minister has already told the Bloomberg TV that the acid test will be in December “particularly in terms of implementing what we’ve decided”.
No one is cynical but you can bet your bottom dollar that, if the government fails to effect the promised reforms, South Africa will be downgraded in December.
Time is not on SA’s side and it means a significant progress must be quickly made in cutting the red tape that is hampering entrepreneurs and in overhauling the poorly managed parastatals that are bleeding the fiscus dry.
Kimi Makwetu’s latest local government audit results demonstrate, fruitless and wasteful spending by municipalities has almost doubled over past five years.
And right now, the country can simply no longer afford the billions of rands that are being frittered away by councils while services continue to be patchy at best.
“To avoid a downgrade later in the year, the government will have to demonstrate a commitment to decrease spending. The government desperately need their income to increase. In order to do this the government will have to focus on measures which will grow the country, reduce the unemployment rate and increase the tax base,” Kimi said.
But government’s endeavour to create employment will be greatly challenged by the recent shocks to growth and inflation which have created uncertainty. Recall, unemployment increased by 2.2 percentage points to 26.7 percent in the first quarter of 2016, according to fin24, compared to the fourth quarter of 2015. This is the highest rate since 2008.
The biggest job losses were observed in trade (119 000) and manufacturing (100 000) and construction (77 000). Reasons cited for such pervasive job-shedding is that profits in SA’s primary and secondary sectors have been under acute pressure for some time.
The economy has also been hit by a ravaging drought and the prospects are not promising, the Govenor Lesetja Kganyago said.
Data from the South African Human Rights Commission (SAHRC) shows that, of 19 million credit active consumers in South Africa, over half have impaired credit records, three months plus in arrears. That is bad news as this is dragging down the economy.
All these may be signs of worse to come. Maybe, we are yet to see an instant of pure, blinding, utterly intense bluish-white light cut across the sky, followed by searing heat, a thousand-fold crash of thunder, and finally an earth-shaking blast that will send a mushroom of dust and debris boiling up to 50 000 feet. That is the impact the junk status will have on the poor.
Reality is forcing us to not hope for the best. Especially when the SA governance seems to be at its worst. And governance is a very important component when analyzing the credit matrix of a country.
Poor governance is South Africa’s main challenge right now. Allan Greenblo editorial director of Today’s Trust has said it is funny in a manner of speaking, how little is learnt from history. Paradoxically, given their long struggle of one against the other, the present ANC is exhibiting some discomforting similarities with the previous National Party government.
It was 31 years ago that the then President PW Botha delivered his so-called Rubicon address, which he failed to deliver the reform policies that the world had been led to expect. Similarly today, President Jacob Zuma faces a Rubicon which he addresses by contradictions.
The waiting has begun, but nobody knows what to expect. But we can bet on it,business and investor confidence might be shattered.
Allan said the test would be whether Zuma white-ants the efforts of Gordhan (if not Gordhan himself) to assert fiscal discipline, insist sound governance in the state and state-owned enterprises, and stimulate economic growth.
According to him, these are three prerequisites to avoid a relegation of SA sovereign credit to sub-investment grade. And, should relegation not be avoided, junk status will herald disinvestment on a scale akin to the late 1980s.
From what media is telling us, it is easy to conclude that there is a split in the ANC: the rent-seekers and the contributors. And name President Jacob Zuma a rent-seeker par excellence; the poster boy of rent-seekers.
Someone who abuses his position as head of state and leader of the governing party to serve his own interests and those of his clan, sycophants, strategic allies and business benefactors.
In times like this we wonder what will be chosen: self-enrichment at the cost of undermining South Africa’s economic prospects or for the first time, people will come first as they should be?Nobody knows, we just have to wait and see!
But you can be warned as a Mosotho (that is everyone one who lives in Lesotho): The economic situation remains dire with major price increases working their way through the economy caused by prolonged drought and the declining rand.
So deeply indebted consumers should not view South Africa’s unchanged credit rating by S&P as a reprieve to go on a spending spree.Remember, if you cannot afford it, and you don’t need it. Don’t buy it. In this time, you do not need non-essential luxury items that include extravagant buys on smart TVs, gaming consoles, and even taking out pay day cash loans.
All of us should use good judgment and stay within our borrowing limits. That is the key to keep our individual situation in check and help the economy at the same time.
Reforms: time to change hearts and minds
A very important milestone is gradually being reached in Lesotho politics. On April 6, 2022, I attended a National Reforms Authority (NRA)’s High-level Forum on the State of the Implementation of the Lesotho National Reforms at ’Manthabiseng Convention Centre.
For the first time, I heard at that meeting politicians acknowledging that Lesotho’s political problems have a lot to do with politicians themselves, and not with written clauses of the Constitution.
This is a point that this country’s intellectuals and academics have made for years. Lesotho politicians have refused to listen both because of their dislike for the country’s academics and because of absence of any communication between the two groups as a result of that dislike.
If politicians could use their newly-acquired wisdom as a basis from which to proceed in attempts to solve Lesotho’s political problems, there is potential for great strides to be made, finally.
Political instability bedevils Lesotho because the hearts and minds of politicians continue to be inclined to break the law, or to look for ‘loopholes’, in pursuit of narrow interests; and continue to change clauses of the Constitution when such clauses do not allow the pursuit and achievement of narrow interests.
We need a change of heart and mind-set among our politicians in order to make headway in building a politically stable society. Politicians’ narrow interests should not be a basis for what needs to happen in Lesotho. The need for constitutional changes and the search for loopholes will persist but they should not be inspired by the pursuit of narrow interests, as has hitherto happened.
Instead, to us the public, it should become necessary to reform the constitution on two conditions only. First, when it is found that the constitution does not adequately address concerns with the socio-economic welfare of Basotho. Second, when it becomes necessary to ensure that Basotho exercise real power on who rules them and on how they are ruled. These conditions are cardinal.
And they should inform all thought and action in Lesotho’s politics.
As has happened many times already, even these costly ongoing reforms of clauses of the Constitution will be all for naught if concern for politicians’ own welfare continues to be a primary motive behind their pursuit for parliamentary seats, and what they do once in parliament.
It may well be that the current and next generation of politicians will be short of men and women with hearts and mind-set fit for service to Basotho’s welfare. But serious attempts need to be made to ensure the generation after the next has a critical mass of such politicians.
This cannot only be wished for. It has to be worked for. One thought is to introduce a curriculum that teaches people the capacity to think of others, and care for others. These are some of the attributes mostly missing among our politicians. Their incapacity to think of others leads to their lack of a sense of public duty that we see and experience every day.
We have neglected the task of socialising and educating empathetic hearts and mind-sets claiming that Africans and Basotho naturally and culturally subscribe to, and live in accordance with, ubuntu (humanity). It is quite obvious that this is not true. People who make this claim loudest are the middle classes who, while claiming to subscribe to ubuntu, live in houses surrounded by six feet high perimeter walls.
There may be other thoughts than socialisation on this. What we have to hope for is that from here onwards, in our search for solutions to Lesotho political problems, we will proceed from the recognition that, primarily, these problems emanate not from inappropriate written texts of the Constitution but from hearts and minds of men and women.
We have lost our moral indignation
I remember when the allegations that Tšeliso Nthane had shot and killed one of his employees first came to the surface. It was in 2019, back when the air was not so poisonous and Basotho still had much of their hope. Well not much because this is generally a hopeless, desolate wasteland but some small pretence of hope still remained. The nation was angry, and rightfully so. The consensus was that men like Nthane, no matter how deep their pockets, should not be allowed to act with impunity. A man was dead and we were baying for justice.
A lot has happened since then. The Covid-19 pandemic, mass retrenchments and job losses, the ever dwindling power of the loti. This and that but all has been more negative than positive in this place so when the time came for Nthane to be handed judgment we had mostly stopped caring as we had to deal with the business of living .
Anyway the man was found not guilty. I will confess I did not read the judgement for fear it will sink me lower into the abyss that is life in Lesotho. However, news of that sort cannot escape one even if they try, more especially if they are on social media. No sooner had judgment been handed down that social media debates began raging.
Suddenly everyone was an expert in punitive versus remedial justices and the pros and cons therein. Many argued that once more the rich had been proven to be above the law. A statement clouded in naivety really because had they been paying attention they would have realised that there is nothing to prove as the rich have always been above the law.
Those who fancy themselves the harbingers of remedial justice argued that Nthane had made certain payments to the family and thus paid his debt. I have no personal knowledge of these payments but I was of course curious to know how much the price of a life is amongst these parts.
They further argued that since Nthane owned many companies that employed many Basotho it would not be in the national interests to send him to prison as jobs would be lost. I am not sure how Basotho think companies work and if they have ever heard that they are a separate legal entity from their owners but no matter. This is certainly an elucidation on the finer points of company law.
I have in the past been guilty of judging my countrymen, perhaps a little too harshly as it is sometimes hard to make sense of their motivations but to hear young people speak so vehemently for letting a man walk free after another has died simply because he is in a position to provide them with a livelihood reminded me once more of the stark hopelessness when it comes to finding a job in this country.
Basotho youths are not uneducated, they are not immoral or unfeeling and they certainly are not pro-murder. At least I hope so. What they are however is hungry and desperate and desperation can reduce even the most pious man to his knees. What good is moral outrage if one is outraged on an empty stomach?
What good will it do for them to be out in the street being activists for social and moral issues when they barely can afford the nine maloti to hop into a taxi and arrive at such a demonstration? To argue that anyone who can offer them jobs should be treated differently as far as the law is concerned is a statement borne out of the worst kind of desperation and instead of making me angry, it made me sad.
Now, I have not enough knowledge of the case against Nthane to say whether I feel the judgment was fair and just. All I know is I certainly want it not to be in favour of him simply because he has jobs and livelihoods to give. It is however easy for me to judge from my privileged position where I have a meal guaranteed every night. It is easy to be morally indignant when one does not have to worry about the indignities of joblessness.
I spoke last week of how easy it is for us to condemn young people who lay their bodies on the human resource table. We laugh at older people who walk for kilometres to attend political rallies and sing for “baetapele” (leaders) and fail to take into account that in a moment of desperation a man who offers you promises of a job you badly need is someone you would follow to a rally.
To see young women in the arms of 70-year-olds who are not even good company. To see young men vehemently justify that murder should be forgiven if the alleged murderer can offer them a livelihood will quickly disabuse one of the notion that there is any progress happening in Lesotho.
So here we are in a country where people are willing to sell their bodies and souls for a chance at a decent life.
Here we are about to enter another election season and the only people who stand to truly benefit are the owners of guest houses. Whether Nthane got a fair verdict or not is immaterial to me, what remains shocking is how we have lost our moral indignation as a country. It appears Tom Thabane, that erstwhile leader was right when he said “sera sa motho ke tlala”. To quote the younger generations of Ma2000: “Because wow”.
Thakane Rethabile Shale
No peace plan, no economic recovery
The world’s struggle to reboot economies viciously disrupted by the Covid-19 pandemic remains real. However, the impact could be more severe to countries that already had dwindling economies and lack a way out, chief amongst them Lesotho. The focus on recovery gets disrupted from time to time by new variants seemingly more infectious than the previous ones; we had the Delta variant and now Omicron.
Several countries seem to be putting their own nationals ahead of everyone else. The squabble between the European Union and the United Kingdom over vaccines was but an example of leaders who put the interests of their own people first. The leaders surely knew that the world would not win the fight over Covid unless the rest of the world is vaccinated as stated by the World Health Organisation.
They however made plans to keep their people safe first, protect their boundaries and then set stringent entry conditions into their countries to further protect their own people. Though this may seem selfish, who in their right mind would not do the same?
As countries draw and implement plans to get their economies back on track, Lesotho has very little to show if anything at all. Businesses shut doors and the few people who had jobs lost their only incomes. Prior to the Covid-19 pandemic, Lesotho was already struggling to engage in much needed capital projects because it simply did not have the money.
Sadly, there is no watertight plan let alone a draft to increase dwindling revenue following the reviewed Southern Africa Custom Union’s approach. There is basically no plan to support entrepreneurs to scale up thereby increasing the tax base. Instead, the Lesotho Revenue Authority (LRA) is expected to milk dry the remaining few dying cows.
With this hopeless state of affairs in Lesotho, one would be misled to think that Lesotho is not capable of making solid plans and sticking to them. The reality is, Lesotho, a country of around 2 million people only is indeed capable of doing more for her few people. She has abundant resources; minerals and human capital.
Sadly, the skills and resources are always misdirected to produce negative energy among Basotho. The only fully funded strategy that Lesotho is committed to at the moment and can be articulated clearly by all parties involved without having to consult is Mothetjoa Metsing’s arrest. Metsing is accused of treason based on a hard-to-understand incident where he was a coalition partner and a Deputy Prime Minister, yet he is said to have been involved in an attempt to unseat the then Prime Minister Thabane.
Thabane of course did leave the country but Metsing never dreamt of taking over the premier’s office. The police, Public Prosecutor and the executive are all on the same page about progress and what the next move against Metsing should be.
There are officers ready to do whatever it takes to bring him down. There is no shortage of resources when it comes to arresting him. Intelligence is on top of its game when it comes to him. The propaganda machinery is fully empowered. When will the government get its priorities right?
The army commander Lt Gen Motšomotšo and senior army officials Col Sechele and Col Hashatsi were shot dead in broad daylight, within the army barracks and there is absolutely nothing and no one who has been held accountable for their killing. This against the background that former army commander Lt Gen Tlali Kamoli and others remain in prison for years pending the case surrounding among others the killing of yet another army commander Maaparankoe Mahao.
Where is the logic here? No investigations, no arrests, absolutely nothing on the killing of the three high profile army officials. Yet the government is persecuting Metsing for allegedly plotting to oust a government which never happened.
Around 80 people died in cold blood in police custody under the All Basotho Convention-led operation – “Tokho”. The then Prime Minister Tom Thabane allowed the police to torture people and the Lesotho Congress for Democracy tried to force the premier to withdraw his instructions to the police. That however drew a blank.
The police chief has not yet been called to account for these deaths. The police are doing what Basotho were complaining about during the reign of the previous regime that the army was acting with impunity. Suddenly, it is ok for the police to brutally torture and kill Basotho.
Suddenly, it is ok for army bosses to be killed with impunity. That’s the only reasonable conclusion that one arrives at based on the hesitation of the government to do anything about the killers on the government’s payroll.
The government of Lesotho needs to focus on revamping this country’s economy, creating jobs, improving health services, building infrastructure, promoting peace and unity and managing the escalating crime rate. Lesotho fails to acknowledge that the country’s peace is a group effort and Basotho must all be in it to work.
Investors are unlikely to risk their money in a country that is not at peace with itself. Until the government get its priorities right, Lesotho will continue to struggle to have peace and a stable economy. This will translate to high unemployment worse compared to where it is currently.
Metsing had a peace plan that was unfortunately not supported by some parties. Those who opposed it could only assume that it would let him go free. They never weighed options nor tabled alternative peace-making efforts. To them the country would rather suffer, rather be divided than accept the fact that the government was never toppled. There are far more pressing issues in Lesotho. Instead of paying loads of money to a foreign prosecutor, and taking much valuable time from our courts of law, we should be focusing our priorities on something positive. We need to heal and move on as a nation, not as individuals.
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