LESOTHO’s economy could be on the mend with sustained growth expected in the next two years, according to projections from the Central Bank of Lesotho (CBL).
The CBL’s Economic Outlook report released last month says the economy will see a growth of 3.1 percent this year, 3.5 percent in 2017 before leaping to 4.6 in 2018.
Last year growth tumbled to 2.9 percent from 3.6 percent in 2014, mainly due to a slump in global demand, the devastating drought and depressed activity in some sectors of the economy.
The central bank says the steady recovery will be anchored by strong growth anticipated in the mining sector and moderate growth in the service sector. The mining sector is expected to grow by 9.6 percent this year before recording a massive jump to 25.7 percent next year.
Although it will slow down to seven percent in 2018 the central bank expects that will not make a significant dent in the overall economic growth because the drop will be covered by a recovery in the building and construction subsector.
The mining industry will benefit from increased capacity at Letseng Diamond, Lesotho’s biggest mine, and Kao Diamond mine.
Liqhobong Mine which is expected to start full production late this year after completion of its M2.5 billion processing plant is expected to contribute significantly to the growth in the sector.
Liqhobong Mine expects to produce 1.1 carats once in full production.
The report notes that the secondary sector which includes manufacturing, textiles and construction will remain subdued this year and the next before a strong rebound in 2018.
The sector is expected to shrink by 4.4 percent next year but grow by 4.6 percent in 2018. The building and construction industry is expected to cause both the dip and recovery, as the 16.4 percent drop is expected to be followed by a 11.2 percent growth the year after.
The CBL is basing those growth estimates on the assumption that construction of the advance infrastructure for the Polihali Dam would have started. The advance infrastructure includes access roads, accommodation facilities as well power supply and telecommunication.
Prospects for the textile and clothing industry look bleak with negative growth expected to continue for the next two years.
“While textiles and clothing exports in non-AGOA destinations are expected to grow, exports to US markets are set to remain under pressure due to continuous erosion of the country’s competitiveness in the US markets,” says the report.
The report adds that the recently concluded Trans-Pacific Partnership (TPP) agreement between the US and several pacific countries “poses a threat to Lesotho’s manufacturing exports”.
The US is the biggest market for Lesotho’s textiles. The TPP deal however opens the US textile markets to other countries whose textiles are cheaper because of government subsidies and low labour productions costs.
That means even though it is insulated by AGOA Lesotho will have to battle with other countries in the US’s textile market.
The tertiary sector, which is the biggest contributor to the economy, is expected to remain strong with an average growth of 4.3 percent until 2018.
Its subsectors of wholesale and retail, transport and communications as well as financial and insurance services are expected to drive this steady growth.
“A rebound in the general economic growth, is set to provide impetus to consumer spending, boosting wholesale and retail trade services.”
The transport industry, the report says, will benefit from low oil prices and expected growth in the mining and construction industries.
It also says new technology, mobile money services and increased internet coverage will continue to drive growth in the telecommunications industry.
“On-going reforms including the establishment of the national identification card system, credit bureau and implementation of the Land Act of 2010 are expected to give impetus to financial and insurance services.”
The report notes the law could be a boon for the financial sector as it will improve security of tenure and allow people to use their land as collateral for credit.
The central bank however points out the expected growth remains shaky because of the risk posed “by adverse weather conditions, possible delays in the implementation of major capital projects and the recently signed TPP agreement”.
“Unfavourable weather conditions constitute a major risk to agricultural growth prospects, with possibility of a delay in recovery if sufficient rainfalls are not received well in time at the beginning of the agriculture year.”
MP defies party, backs opposition
MOHLOMINYANE Tota, the only MP for the United for Change (UFC), has defied the party’s order to stop voting with the opposition in parliament.
Tota, the UFC’s deputy leader, told thepost this week that he will vote, guided by his own conscience, and not the party’s instructions.
His defiance comes after the party publicly chastised him for voting with the opposition in parliament.
A fightnight ago, Tota angered his party when he sided with the opposition to vote against the government’s motion to continue discussing the reforms’ Omnibus Bill despite that it was being challenged in the Constitutional Court.
The government however won with 57 votes against the opposition’s 50.
The UFC issued a statement reprimanding Tota for defying its decision to always vote with the government.
But Tota told thepost this week that he was unfazed by the party’s warning.
“I will continue to vote with the opposition where need be, and I will also vote with the government where need be,” Tota said.
He said he respects the party’s position but “I also have a right to follow my conscience”.
This, he added, is because “it is not mandatory for an MP to toe the party line even when his conscience does not allow it”.
He said whether he will vote with the government or the opposition will depend “on the issue on the table”.
He said his conscience would not allow him to vote with the government on the Omnibus Bill motion.
“It was wrong,” Tota said.
“I will do the same again given another chance.”
Tota’s response comes three days after the UFC issued a statement distancing itself from his stance in parliament.
The party said its national executive committee had an urgent meeting over the weekend to discuss Tota’s behaviour.
It said its position is to always support Prime Minister Sam Matekane’s coalition government.
“‘The issue has caused a lot of confusion in the party and among Basotho at large,” the statement reads.
The party also said Tota did not bother to inform the national executive committee about his decision so that he could get a new mandate.
“He did not even inform the committee before voting,” the statement reads.
“The national executive committee held an intensive meeting with Tota about the matter because the purpose of the party is to support the government,” it reads.
The UFC said where the government goes wrong “the party will continue to confront it with peace and not with a fight” (sic).
“We have confidence in the current government because it was voted in by Basotho.”
The UFC’s statement makes it clear that the party “will not support anything against the government”.
Inside plot to oust Matekane
THE plot to topple Prime Minister Sam Matekane thickened this week amid allegations of brazen vote-buying ahead of the opposition’s planned vote of no-confidence.
The opposition is said to be ready to push out Matekane when parliament reopens sometime in September. They accuse Matekane’s government of incompetence, nepotism, corruption and using the security forces to harass opposition MPs.
But as the lobbying and touting of MPs reaches fever pitch, there are now allegations of each side using bribes to secure votes crucial in the vote to remove the government.
Democratic Congress leader, Mathibeli Mokhothu, this week accused the government of bribing its MPs to defeat the motion against Matekane.
Mokhothu, who made the allegations at the opposition’s press conference yesterdday, did not give further details or names of those bribed and those bribing.
But on Monday, the Revolution for Prosperity (RFP) MP, Puseletso Lejone, told thepost that Mokhothu offered him a M2.2 million bribe to support the opposition’s motion to upend the government.
Lejone said Mokhothu made the offer at a secret meeting, attended by almost all opposition leaders on August 14, at Monyane Moleleki’s house in Qoatsaneng.
The Thaba Moea MP said the leaders claimed that 60 MPs were supporting the motion against Matekane and wanted his vote to make it 61.
“The money was to come directly from Mokhothu,” Lejone said.
“They asked me to provide them with my bank account so that they could transfer the money.”
Mokhuthu denied the allegations, saying he wondered if Lejone “was smoking socks”.
Lejone repeated the same allegations on the sidelines of yesterday’s press conference where Matekane assured Basotho that his government has enough numbers to fend off the opposition’s attempt to push him out.
He said apart from Moleleki and Mokhothu, other political leaders who attended the meeting were Lekhetho Rakuoane, Machesetsa Mofomobe, Nkaku Kabi, Professor Nqosa Mahao, Teboho Mojapela, Tefo Mapesela and Tšepo Lipholo.
He said the leaders gave him a document showing that six RFP MPs had pledged to support the vote of no confidence. Lejone however refused to name the RFP MPs, saying he still wants them to remain in the ruling party.
He said four MPs from parties in the RFP-led coalition had signed.
They are Mohlominyane Tota (UFC), Reverend Paul Masiu (BAENA), Mokoto Hloaele (AD) and Motlalepula Khahloe (MEC).
The deal, Lejone said, was that Mokhutho would become prime minister and be deputised by Dr Mahali Phamotse.
He said the RFP’s faction was going to be rewarded with 10 ministerial seats for their role in toppling Matekane.
Nearly all the political leaders mentioned by Lejone denied attending the meeting at Moleleki’s house.
“By the living God, I have never been in a meeting with that man (Lejone),” Mokhothu said, adding that Lejone’s allegations are “defamatory”.
Mahao said he last visited Moleleki’s house, which is up the road from his, 22 years ago. Mofomobe said Lejone is lying about the meeting because he wants to curry favour with Matekane, whom he had been criticising for months.
Mofomobe said all his meetings with Lejone were at the BNP Centre and their agenda was toppling Matekane.
“We were discussing his (Matekane) incapability to rule this country,” Mofomobe said.
Rakuoane and Mapesela said they have never been to Moleleki’s house.
So did Kabi who implied that Lejone could have smoked something intoxicating “to talk about a meeting that never happened”.
Lipholo, Rev Masiu, and Tota said they were not at that meeting while Moleleki said he had “no comment”.
Matekane abusing state agencies, says opposition
THE opposition has accused the government of weaponising security agencies to harass and intimidate their MPs.
The accusations come as the opposition plots to push a vote of no confidence against Prime Minister Sam Matekane when parliament re-opens in September.
Opposition leaders told a press conference yesterday that the government has resorted to using the army and the police against its MPs because it is afraid of the motion.
Democratic Congress (DC) leader, Mathibeli Mokhothu, said the security bosses have been willing tools for the government because their bosses are desperate for Matekane to renew their employment contracts.
He was talking about Police Commissioner Holomo Molibeli, army boss Lieutenant General Mojalefa Letsoela and National Security Service (NSS) boss Pheello Ralenkoane.
“Employment contracts for the security agencies’ bosses are the ones causing these problems because the commanders end up working towards pleasing the government for their contract extension,” Mokhothu said.
He said the army has also started setting up roadblocks closer to parliament to search MPs. Mokhothu said the army searched Nkaku Kabi and Advocate Lebohang Maema KC at the parliament premises last week.
“The government is now bringing back the security agencies into party politics,” Mokhothu said.
“This was the first time the army entered the parliament premises to search members and other people there. It is an embarrassment.”
“The responsibility of our soldiers is to guard the borders and ensure security, not to enter politics or set up roadblocks on the parliament roads.”
“They are now running the country like a shop or a company.”
Basotho National Party leader, Machesetsa Mofomobe, alleged that Matekane had a meeting with the security bosses in Teya-teyaneng to discuss how they could use their institutions to clip the opposition’s wings.
“The LDF, LMPS and NSS boss’s contracts have expired, and now they are using the institution to get extensions,” Mofomobe said.
“The LDF and LMPS are doing this deliberately to protect the government.”
thepost could not independently verify this allegation.
Tefo Mapesela, the Basotho Progressive Party leader, said Matekane’s government is taking Lesotho back to 2014 when the army was wooed into politics.
He warned that officers who allow themselves to be used as pawns in political fights might find themselves in jail while their political handlers enjoy freedom.
He referred to Lieutenant General Tlali Kamoli who has been in remand prison for seven years as he faces charges of murder, attempted murder and treason.
Mapesela however said the opposition will not be intimidated because it is their democratic right to bring a motion of no confidence against the government.
“When there is time to enter a motion of no confidence it is time, it is written in the law, there is nothing wrong there,” Mapesela said.
“I once launched a motion of no confidence in the previous parliament, but I was never arrested or threatened.”
“We do not owe Matekane anything. When the time has come he has to go. We will lobby others as it is not a crime.”
The Basotho Action Party’s Nqosa Mahao criticised the police for issuing a press statement with political undertones.
In a controversial statement last week, Commissioner Molibeli said the police were aware that some MPs were coercing their colleagues to support their plot to topple the government.
Molibeli also said they were aware that such MPs were surrounding themselves with armed groups.
“Police warn those perpetrating these acts to stop immediately to avoid action that could be taken to protect the country,” Molibeli said.
Matekane made the same allegations at his press conference yesterday.
Professor Mahao said the statement shows that the police have now been entangled in politics.
“Every time parties experience internal problems the leaders conspire with the security agencies,” he said.
“The opposition leaders are now being harassed because the government wants to stop them from exercising their rights.”
The opposition’s charge sheet against Matekane
- Filling of statutory positions despite the reforms aiming to change the system.
- Using security agencies to deter MPs from ousting Matekane.
- Job losses.
- Lack of job creation.
- Failure to fulfil campaign promises.
- Protecting mining companies’ interests at the expense of Basotho.
- Incompetence and lack of communication skills.
- Arrest of MPs by the police.
- Cherry-picking reforms that insulate his government.
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