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Driving growth in textile sector




THE textile industry is central to Lesotho’s economy. With 45 000 workers, it is the largest private sector employer in the country.
It accounts for 92 percent of manufacturing jobs, most of which are held by women. The more than 40 factories generate 43 percent of Lesotho’s exports.

The sector’s contribution to the economy however goes beyond formal jobs and exports.
The survival of many economic activities, both formal and informal, is tied to the sector.

Textile workers are the lifeblood of the taxi industry, retail shops as well as catering and accommodation businesses. There are also other formal and informal businesses that feed off the sector.
Yet despite this apparent significance the economy remains largely dominated by foreign investors.

Only two of the 40-something textile factories are locally owned.
This trend which has been sustained for the past three decades is however slowly changing as more locals enter the sector. Although the new entrants remain relatively small, there are strong indications that local investors are willing to invest in their growth.

One of those locally owned factories is Afri-Expo Textiles which started in 2016.
Located in Ha Tikoe Industrial Park, Afri-Expo is a reflection of what is possible with determination and courage. It started at a time when the prevailing narrative was that Lesotho’s textile sector was dying. The markets were dry and wage disputes were wreaking havoc across the sector.

Galloping production costs were squeezing margins.
At the same time buyers were leaving in droves to cheaper producers in other countries whose governments were offering generous incentives to existing and potential investors in textile.
Yet Teboho Kobeli, Afri-Expo’s managing director, says he was not fazed by the gloom associated with the sector. Kobeli says his decision to go against the grain was based on his knowledge of the sector.

He has vast experience in the clothing business.
“The truth is that most of what we have been told about textiles in Lesotho is not true. I suspect it is meant to scare locals from getting into the sector,” he says.
“The business is sustainable if you do it well. Everyone wears clothes. You wear them from the day you are born to the day you die.”
“The market is there but you just have to tap into it by making the right products and having the right skills.”

That bravery is beginning to pay off in ways Kobeli never imagined.
Today the factory employees about 600 workers with a monthly production capacity of 10 000 units.
Kobeli says the company is struggling to meet the huge demand from buyers.

That is why he has roped in Sekhametsi Investment Consortium to provide the financial muscle and expertise to grow the company. Last year Sekhametsi bought a 30 percent stake in Afri-Expo for M10 million.
Kobeli says the long-term goal is to establish factories in the ten districts and employ 10 000 people.

“AGOA (African Growth and Opportunity Act) is coming to an end soon and it’s likely that most foreign investors will leave the country. The disaster can only be avoided if Basotho participate in the textile sector at ownership level,” Kobeli says.
AGOA is the trade facility for poor countries to export textiles to the United States duty-free.

Agoa expires in 2024 and there is uncertainty over its renewal. Some foreign-owned textiles are said to be already getting ready to jump ship when AGOA expires. Afri-Expo is one of the few companies that is unlikely to be affected by AGOA’s ending.
“Lesotho is sitting on a time bomb that only Basotho can defuse by starting their own factories to create employment. There is no doubt that the foreign investors will leave. What is however certain is that we have the means and skills to fill that void as locals,” Kobeli says.

The company is focusing on the regional market which is less susceptible to the whims of the United States’ lawmakers. Kobeli says the regional market has served the company well.
“With Sekhametsi’s help we can grow the business and increase our production.”
Palo Kotelo, one of the two Sekhametsi representatives on the Afri-Expo board, says the investment fits well with the consortium’s growth strategy.

“We see the potential in this business but we are also looking at ways to create sustainable jobs for Basotho. We are pleased by the direction that the company is taking,” Kotelo says.
“It is time for Basotho to control their destiny by investing in the key areas of their economy. No country has ever developed by relying solely on foreign investment. The real drivers of any economy should be the locals.”

The factory focuses on the Cut, Trim and Make business which is at the very bottom of the textile manufacturing chain.
The plan, Kobeli explains, is to move up the value chain to make its own products.
That would allow the factory to put an additional 30 percent mark-up on its products.

But to do that Afri-Expo has to conquer several hurdles.
For instance, the factory in Ha Tikoe has become too small for the company’s operations. Storage and working space have become a problem.
“We are crammed in this area. We cannot increase production unless we get a larger factory,” he says.
The other problem is a laundry to wash denim garments, the factory’s main products.

Lesotho has small textile laundries that cannot meet the market demand.
Afri-Expo has to send its products to a laundry in Durban.
“It’s costing us money because we have to transport the garments to Durban. We also lose time while waiting for the products to come back.”
At times some of Kobeli’s products are stuck in Durban for months because the laundry is overwhelmed.

Using the laundry in Durban also comes with logistical challenges at the borders.
It also makes Afri-Expo’s products more expensive.
Kobeli says they are now working on establishing a laundry that will serve not only Afri-Expo but the whole industry.

“With our own laundry we can increase our margins by 25 percent. We can hire more people and increase our productions because we are able to accept more orders.”

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Mahao, PS in big fight



PRIME Minister Sam Matekane this week summoned the Basotho Action Party (BAP) executive committee in a bid to defuse simmering tensions within the party.
This comes amid fears that Professor Nqosa Mahao’s fallout with his principal secretary at the Ministry of Energy, Tankiso Phapano, could threaten the unity in the BAP and the government’s stability.

thepost can reveal that Mahao has hinted that he would resign if Matekane doesn’t fire or reassign Phapano.

But there are strong indications that Mahao doesn’t enjoy the backing of his executive committee and MPs in his fight with Phapano.

Inside sources this week told thepost that some members of the BAP’s executive committee and MPs are openly siding with Phapano and have been secretly lobbying Matekane to reshuffle Mahao from the Ministry of Energy to Sports.

A source said Mahao is aware of these manoeuvres, including a clandestine meeting in Maputsoe, and has said he would rather resign than be the subject of a humiliating reshuffle instigated by people he leads.

The source of the bad blood between Mahao and Phapano is not clear but it is understood that they have disagreed over tenders and the ministry’s direction.

The source said Matekane was first briefed of the running battles at the ministry some three weeks ago just as matters were coming to a head.

It is the second briefing which revealed a complete breakdown in the relationship that triggered Matekane’s meeting with the BAP’s executive committee and MPs on Monday.

Three people who were in that meeting said Matekane told the BAP officials to deal with the crisis before it affected the ministry and threatened the coalition government’s stability.

The BAP’s executive committee, including MPs and Mahao, then had a marathon meeting to discuss ways to make peace between Mahao and Phapano.

A source who was in that meeting said “it was clear to Mahao that the majority of the committee and the MPs were on Phapano’s side”.

“Mahao quickly realised that he did not have the backing of the majority and took a conciliatory approach. It was clear that the committee would rather have him resign than get Phapano removed from the ministry,” the source said.

“In the past Mahao had flatly refused to reconcile with Phapano because of seniority. But this time he appeared to be open to a meeting to discuss reconciliation.”

Both Mahao and Phapano told thepost last night that their relationship was still cordial. ‘“We are still in good books with Phapano until further notice,” Mahao said.

“However, we cannot predict the future.”

Mahao denied ever discussing Phapano’s dismissal or transfer with Matekane.

Phapano also insisted that he was working well with Mahao.

“We are still on good terms,” Phapano said, adding that the allegation that they were fighting was “baseless”.

The fallout between Mahao and Phapano has been quick and spectacular.

The two had been almost inseparable months before Mahao agreed to join the coalition government.

Phapano would use his car to drive Mahao around. They would attend party meetings together. Some party insiders saw Phapano as Mahao’s right-hand man and adviser.

Mahao allegedly strongly pushed for Phapano to be appointed as his principal secretary when he became energy minister.

But sources said Mahao started having second thoughts days after recommending Phapano and tried to get his appointment reversed but it was too late.

A source says within weeks Mahao was telling cabinet colleagues that Phapano had captured the ministry and he was unable to function as the minister.

“He started pushing to oust Phapano within days because they were already clashing. It’s been war from the first days,” said the source.

Staff Reporter

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How chicken import ban hit vendors



MALESHOANE Pakela used to work at small backyard chicken farms where she was paid with chicken heads, necks, legs, and offals that she would roast and sell to factory workers at the Thetsane Industrial Area.

Her job was to clean and pack chicken.
The profit wasn’t much but just enough for the 37-year-old widow to feed and keep her four children in school.

“It also covered her monthly rental of M150 for a room in Ha-Tsolo Sekoting.

Her life was however shattered last October when the government imposed a ban on chicken imports from South Africa following an outbreak of bird flu.
Without day-old chicks the farms quickly shut down, cutting Pakela’s supply of heads, necks, legs, and offals.
Within a few days, her family was starving.

Pakela had been struggling even for months before the ban. The closure of the factories and retrenchments of thousands of workers has severely hit her sales. She was behind on her rent and could barely feed her children.

The partial lifting of the chicken ban has not helped Pakela because her former employers still cannot import day-old chicks or live birds.
Pakela and a family were kicked out of their rented room in November when their arrears were about M1 000.
She has found another room nearby.

A ‘Good Samaritan’ has allowed her to use a room for free until she can afford the rent. But Pakela says she still feels obliged to pay something because she understands that things are hard for everyone.

“Here the rent is still M150 but the landlord accepts every amount that I give her,” Pakela says.
There are days when her children go to bed hungry.

“I have told them (children) that if I have nothing they should accept (the status).”

She now survives on handouts from neighbours and other well-wishers. Pakela’s poverty is apparent.

Barefoot and holding her small child in a seshoeshoe dress, Pakela says her two children usually go to school without eating.
The other child has dropped out of school because she doesn’t have shoes.

’Mako Lepolesa, 44, who has been running a chesanyama (meat grill) at the Maseru West Industrial Estate since 2018. The father of three says his clients are mainly taxi drivers and factory workers.

Chicken was her main product until last October when the ban was imposed. It wasn’t long before his business started wobbling.

“I thought it would be just a short-lived problem (chicken import ban) but it passed on this year,” he says, adding that it might take months for his business to recover.
Moshe Ramashamole, 42, who also owns a chesanyama in the Maseru West Industrial Estate, tried to remain in business by sourcing chicken from local farmers.

It was a stopgap measure that however lasted a few weeks because the farmers also ran out of stock. He resorted to bad chicken but they were double the price of a full chicken before the ban.
Yet Ramashamole thought he could make it work by increasing the price of his plate from M35 to M55. The customers however resisted the new price and Ramashamole had to take the losses.

The poultry ban did not affect street vendors like Pakela alone.
Former Minister of Communications, Khotso Letsatsi, is one of those poultry farmers struggling following the chicken ban.

He ventured into poultry in January last year. It was an audacious venture that included a M100 000 investment in a shelter and other equipment.
He started with a batch of 300 chicks and had reached 1 000 by the time the ban was imposed.

“The business was lucrative,” Letsatsi says.

“I had to employ two people permanently to assist me on a full-time basis,” he says.

When it was time to slaughter the chickens, Letsatsi says he had to employ seven casual labourers.
Since the ban was imposed he had released all his workers.

“I do not know where they are now. Maybe they are starving,” he says of the workers he released.

Letsatsi doesn’t know how he will revive his business.
The Director of Marketing in the Ministry of Agriculture and Food Security (MAFS), Lekhooe Makhate, says the ban has been devastating to farmers and businesses.

“Some big businesses are going to declare less tax to the government because there was no business,” Makhate says.

He says Lesotho spends M2.1 billion on the importation of chicken and its products from South Africa every year.
But that amount usually soars to M4 billion depending on the market forces of demand and supply.

Makhate says the M2.1 billion goes to South Africa where the chicken and its products are imported.

At the height of the scarcity of chickens in the country, Makhate says people were supposed to make initiatives to travel to villages to search for chickens.

“There is not enough production of chickens in the country,” he says.
“Economically speaking we rely on South Africa. We have to be self-reliant.”

Majara Molupe

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Letseng fends off threat to sue



LETŠENG Diamond says it is under no obligation to advertise jobs for Basotho to provide certain services “where it has the capacity to undertake the same services”.
Letšeng Diamond boss, Motooane Thinyane, was responding to a threat to sue by a little-known political party called Yearn for Economic Sustainability (YES).

Matekane’s company, the Matekane Mining Investment Company (MMIC), had been providing blasting, haulage and drilling services at Letšeng mine since 2005.
The deal with the MMIC was terminated in December last year with the mining company saying it was improper because Matekane had now become a politician.

Letšeng Diamonds announced that it had reached an agreement with the MMIC to acquire its mining equipment at the mine and offered employment to its current employees in line with operational requirements.

“This will enable Letšeng to continue with its mining activities,” the company said in its statement.

This infuriated opposition parties that argued that the mine should have called interested Basotho companies to bid for the contract, saying it is provided for in the Minerals Act of 2005.

The leader of Yearn for Economic Sustainability (YES), Molefi Ntšonyana, wrote the mine last week threatening to sue for allegedly failing to follow section 11 of the Act.
Ntšonyana argued that the Act “does not grant the Letšeng Diamond 100 percent to mine with its good own equipment” but it should engage Basotho companies like it did with the MMIC.

Ntšonyana said Letšeng Diamond and the MMIC made the agreement to acquire the MMIC equipment so that the mine could continue with its mining activities “without any advertisement to seek qualified Basotho to provide such services”.

Ntšonyana said the agreement unilaterally denied Basotho a chance to tender for such services and ignored the fact that the government of Lesotho on behalf of Basotho own 30 percent in the Letšeng Diamond.

“It is advisable to reconsider your decision,” Ntšonyana said, adding that they would also write to the mining board requesting the resolution they made regarding this matter of insourcing mining activities.

He said the company should adhere to section 11 of the Mines and Minerals Act of 2005 and within 14 working days the matter should be reconsidered, “failing which we will have no choice but to drag the company to the courts of law”.

In his response, Thinyane said Ntšonyana must “revisit the section in question in full for its correct interpretation”.

“Letšeng Diamond is under no obligation to advertise to seek qualified Basotho to provide services where it is willing and has the capacity to undertake the same services,” Thinyane said.

He said the decision relating to the agreement referred to has been through the necessary governance structures and is therefore procedural.
Thinyane said Letšeng is a corporate citizen that is fully compliant with the laws of Lesotho.

Majara Molupe

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