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The gloves are off

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MASERU – THE government’s decision to push the factory workers’ minimum wage to M2 000 a month was against advice and warnings that it will trigger a catastrophe in the sector.
thepost can reveal that the government flatly rejected concerns from the Lesotho National Development Corporation (LNDC) and textile companies to stagger the increases over years to avoid saddling companies with unsustainable costs.

In the end, the controversial decision seems to have been motivated by a desperate need to placate factory workers who are a key constituency of the coalition government.
The violent demonstrations that left a trail of damage at the factories in Maseru and Maputsoe could have triggered a kneejerk reaction from a government keen to be seen to be living up to its electoral promises.

Now as the unions and workers celebrate what they see as a major victory, factory companies are squirming at the eye-watering costs, with some already warning that they might be on the way out of Lesotho.
Nein Hshing Group, the biggest textile company in Lesotho by jobs, is reported to have put its expansion plans on ice.
Sources in the industry say the company will no longer open its new factory in September as scheduled unless there is a significant change on the minimum wage.
Nein Hsing’s factory was going to create 1 600 jobs.

In the meantime the other factories are desperately trying to block the new wages that the government says should be backdated to April 1.
This week the Lesotho Textile Exporters Association (LTEA) pushed back with an interim court order to block the government from issuing the gazette to announce the new minimum wage.
That means that the government will not gazette the new wages until the case is finalised.
The association is challenging the cabinet’s authority to set the minimum wage, arguing that it is the Minister of Labour who is supposed to make the decision based on recommendations from the Wages Advisory Board.

The unions say they have been proposing the M2 000 figure since 2010 but the employers have always pressured the Wages Advisory Board and the Ministry of Labour to reject it.
Although it is the International Labour Organisation (ILO) that suggested the M2020 as the living wage, it would seem that it is the campaign promise by Prime Minister Thomas Thabane that could have emboldened the unions to aggressively push for it this time.

The wage negotiations started earlier this year with the unions demanding a M2000 minimum wage plus a 15 percent increase across the board.
The Wages Advisory Board rejected both proposals after employers argued that they will be too steep.
Following protracted negotiations, the board recommended a seven percent increase that the labour minister accepted and gazetted.
The unions however rejected the increase and pressured the minister to reconsider. After another round of negotiations the employers acceded to a 9 percent increase which the board approved and the minister gazetted again.

The unions however still insisted on M2 000 as the starting point before any review. And last month the workers handed Thabane a petition, saying they will not take anything below the M2000.
Thabane then set up a committee of ministers to advise the cabinet on the issue.
The committee was made up of the Minister of Trade Tefo Mapesela, Minister of Small Businesses Chalane Phori and Minister of Gender Mahali Phamotse.

It is that sub-committee that made the M2 000 recommendation to the cabinet despite grave concerns from the LNDC and the textile companies.
thepost has documents showing that the LNDC strongly advised against the proposed minimum wage.

The LNDC is responsible for courting investors to Lesotho. Its major success thus far has been in the textile industry to which it has brought investors from Taiwan.
It has pitched Lesotho as an investor-friendly destination with low wages, benign laws as well as cheap rentals, water and electricity.
In the submission to the subcommittee the LNDC warned that Lesotho is already losing its competitive edge to countries like Ethiopia and Kenya that have incentives for textile companies.
The gradual loss of competiveness over the years, the LNDC said, “reinforces the need to re-look into our basket of incentives and structural transformation of the economy.”
The corporation said increasing the minimum wage at once would hurt the sector that is already struggling to stay afloat.
It proposed that the wages be increased by 9.3 percent over the three years.

That meant that a general worker’s salary would increase from M1 372 to M1 500 this year before moving to M1 639 in 2019. The idea was that the general workers would earn M1 790 by 2020.
The LNDC noted that Lesotho’s textile companies do not have much room to wiggle in negotiations with the buyers because they are in the ‘Cut, Make and Trim’ business where prices determine who gets the order.
It said because of stiff competition from other countries Lesotho’s exports to the United States under Agoa have been dropping.
Part of the reason, the corporation reasoned, is that the local sector is not diversified enough to produce value-added textile products that would fetch better prices on the international market.
Despite its limitations and overreliance on the United States market the textile industry remains the mainstay of the economy, providing 92 percent of jobs in Lesotho’s manufacturing sector.
The crux of the LNDC’s submission was for the sub-committee to be cautious when deciding the minimum wage.
While the corporation was advising restraint the textile companies were pleading with the sub-committee to consider other less painful ways to reach the M2 000 mark.
In several meetings, the LTEA told the ministers that a minimum wage of M2 000 will force the companies to either retrench or close shop altogether and empty a significant chunk of the 40 000 factory workers onto the streets.

LTEA officials say they told the ministers that companies were not hostile to the proposed minimum wage but were concerned that implementing it at once would affect their viability which is already subdued because of low orders and shrinking margins.
“It didn’t look like they were prepared to listen. They just said you have to find a way to make it happen,” said an LTEA official who said he did not want to be named because “the ministers might come after me”.

“The numbers were very clear that M2 000 would not work but the ministers said we should find a way.
We even proposed that they should give us until 2020 to get to M2000 but they said we should do it now.”
He said during the negotiations the LTEA asked the ministers for some incentives to cushion them against the “shock wage increase”.
“The ministers said we could get subsidies on water, electricity and rentals. But in the next meeting the bosses of Wasco, LEC and LNDC said they were not able to give us any subsidy.”
“Instead water and electricity tariffs have increased. Lesotho is the only country that doesn’t have incentives for textile companies. Kenya, South Africa and Ethiopia have incentives that make the textile business better.”

He however said despite the impending gazette and the court case the LTEA remains in negotiations with the subcommittee because the “consequences are dire”.
“Putting the minimum wage at M2 000 means that we increasing the wage bill by about M30 million. There is no way we are going to get that amount especially under the current economic conditions. Companies will leave this country and thousands will lose their jobs.”

“We are saying give us time to increase the wages because we cannot do it at one go. It’s too heavy for us,” he said.
Minister Phori said the government is not hostile to negotiations but demands that the companies disclose their profits before they start pleading poverty.
Phori said there is evidence that some textile factories are not complying with local financial and tax regulations. (See the Phori story on Page 6).
Former finance minister Dr Timothy Thahane said the government should remember that Lesotho is not an island.

“We cannot run away from the fact that the textile industry is a low-wage sector. What determines who gets the orders is the price. The prices are a function of the costs of doing business and the incentives that might be provided by government,” Thahane said.
“If our garments are more expensive than other countries buyers will move. The question is whether we are in a position to lose some companies to those countries. I doubt that we can afford any job losses especially in this economy.”

He said while he understands that people have to earn decent wages he doesn’t believe it should be at the expense of the survival of the very companies that create jobs.
“The danger here is that the next sector might want the same rate of increase. We could open an open season for more wage demands that might hurt companies and the whole economy.”

Staff reporter

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Government is broke

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… Borrows M500m to pay salaries
MASERU – THE government is so broke that it had to borrow a staggering M500 million to pay civil servants’ salaries.
thepost can reveal that the money was borrowed through Treasury Bills from the local market this week.
The borrowing spree comes as the government is battling to pay salaries and suppliers due to a massive drop in tax revenues.
It comes as Prime Minister Moeketsi Majoro’s government is left with two weeks in office.
But those few days left on its tenure have not stopped the government from making plans to borrow more money from the local market.
Highly placed sources told this paper of plans to issue more Treasury Bills in the next two weeks to raise money to pay suppliers.
A source however said there is some reluctance from some technocrats in the Ministry of Finance who believe the government’s books and financial control systems are so shambolic that it doesn’t know exactly how much it owes the private sector.
The arrears fluctuate every day but this paper understands that the government owes between M800 million and M1 billion to the suppliers.
Although the government has been grappling with the financial crisis for the past few years the crunch began to bite this year.
Sources say this month has been particularly terrible for the government.
By last week, a source said, the government had only M150 million for salaries. The total public wage bill is around M600 million.
This explains why the government had to borrow half a billion this week through treasury bills issued by the Central Bank of Lesotho.
The money arrived in the government’s account yesterday afternoon according to sources privy to the transaction.
The government has options to pay the debt in three, six, nine or 12 months. But given its precarious financial position, the government is likely to opt for the 12 months.
This means the debt will be paid on September 21 next year at about 7.8 percent interest. That translates to an interest of M39 million which brings the amount to M539 million.
The latest borrowing pushes the government’s domestic debt to M4.3 billion.
The foreign debt is around M15.6 billion. Although the debt is moderate, the government might be forced to borrow more if revenues continue to drop.
That could spell disaster for the country.
As things stand the government has to cut expenditure or look for ways to generate more revenue.
But with the economy still smarting from the effects of the Covid-19 pandemic and companies shutting down, there doesn’t seem to be much wiggle room.
Donor fatigue and the drop in the Southern African Customs Union, once the anchor of Lesotho’s budget, have made things worse.
Cutting expenditure seems to be the only option but the government appears reluctant to bite the bullet.
Lesotho has consistently failed to implement the International Monetary Fund (IMF)’s recommendation to cut the wage bill.
Successive ministers have hinted at plans to retrench some government employees but have never implemented them because that has political implications.
There are signs that the chickens are eventually coming home to roost.
A few days ago Government Secretary Lerotholi Pheko issued a circular announcing a raft of measures to “contain expenditure and overdue payments for ministries, departments and agencies”.
Pheko said due to increasing expenditure pressures and a drop in revenue the government is implementing measures that will contain expenditure to levels that are aligned with available resources.
“The Ministry of Finance will continue to issue monthly warrants only for wages and salaries as well as essential and critical expenditures in line with the approved procurement and cash plans plus availability of funds,” Pheko said.
He ordered chief accounting officers to stop international travel, buying furniture, large maintenance, subsistence allowances, and hiring new staff.
Also, all vehicles other than VVIPS will not fuel more than once a week unless they are for essential services as authorised by the government.
All government vehicles other than for VVIPs and selected offices must be parked at their designated places by 5pm and shall be used only for authorised purposes, Pheko said.
Nkheli Liphoto

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We’ll gang up against RFP, says Rapapa

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MASERU – Lesotho’s biggest political parties have hatched a grand plan to throttle the Revolution for Prosperity (RFP) led by Sam Matekane.
The plot was revealed by the All Basotho Convention (ABC) chairman Sam Rapapa at an election rally held in Mashai constituency last Friday.
He said even if the RFP makes it into parliament, they will make sure that it would not be part of the next government.
The plan, Rapapa said, is to “keep the RFP leader Sam Matekane at least as the leader of opposition, with no party to cobble up a coalition government”.
He said Matekane’s “dream of becoming a government alone is practically impossible because” the ABC, the Movement for Economic Change (MEC), the Democratic Congress (DC), and the Basotho Action Party (BAP) “will gang up to sabotage him”.
Rapapa spoke as he appealed to ABC members not to join the RFP which he said will not form a government or be in the next coalition government.
“These big parties will gang up against him (Matekane) and he will not be part of the government,” he said.
Rapapa wondered out loud why anyone would therefore want to leave the ABC to join the RFP.
“We will do everything to stop Matekane from getting into the government,” Rapapa said.
He urged Basotho to analyse critically which parties are likely to form the next government so they vote wisely on October 7.
“Both ABC and DC are likely to form a coalition government,” Rapapa said.
He said although he would in the past viciously attack the DC, he had since toned down after the two parties formed a coalition government in 2020.
In a lighthearted moment, Rapapa compared the political landscape in Lesotho to that of a child who runs away from his home to a neighbour’s house because the head of that house has arrived home with stolen wors.
Rapapa said people who are claiming they are leaving the ABC because it is engulfed in conflicts are lying.
Instead, he said the conflicts are in the RFP which has been battling numerous court battles as party members fight to represent the party in the general election.
“There is no peace in Moruo,” Rapapa said. “There is a fight that is going on in the RFP.”
Moruo, which means wealth, is the RFP’s slogan.
Rapapa urged the members to either vote for the DC or the ABC as there is peace and direction in those parties.
After the election, Rapapa said they will tell Maketane to stand in the corner with his people and a few constituencies.
He said Matekane is going to lead the opposition because they had discussed amongst themselves that he is a businessman and he should go back to business.
“We gave you a job to build roads, (but) you leave them with potholes and join politics,” Rapapa said.
He said Matekane is likely to only qualify as an MP and not a Prime Minister.
The ABC secretary general, Lebohang Hlaele, however distanced himself from Rapapa’s statement this week.
He said the party is busy campaigning to win next month’s election to form the next government and has not yet pronounced itself on any coalition deals.
“We have not planned to do anything about Matekane as the ABC National Executive Committee,” Hlaele said.
The ABC leader Nkaku Kabi told another rally in Thaba-Bosiu that “it is still premature as to which parties we would align ourselves with after the election”.
He said there are some parties that had been approaching the ABC to discuss coalition possibilities but they have not sat down to decide to cobble up any coalition agreements with any of them.
“Our committee has never met any party to discuss the formation of a coalition government after the election,” Kabi said.
Kabi said the matter should not trigger any ruckus in the party.
Nkheli Liphoto

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Stunning details of how Matela died

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 MASERU – A witness has revealed shocking details of how ’Mahlompho Matela died.
Lekhooa Monaleli told the court that ’Mahlompho told her that she had been strangled.
Monaleli was testifying this week in the trial of Qamo Matela who is accused of the murder of his wife ’Mahlompho.
Monaleli was friends with the couple.
He was testifying before High Court judge, Justice Tšeliso Mokoko, last Thursday.
Monaleli said he went to the couple’s home after Qamo Matela had told him that his wife was not feeling well and he needed help to take her to hospital.
Monaleli said he found ’Mahlompho and Qamo on the bathroom floor. He said ’Mahlompho was sitting between Qamo’s thighs while their children were in the lounge.
Monaleli said Mahlompho looked “tired and helpless”.
“I helped the accused to lift (his wife) and carried her to the car,” Monaleli said.
He said Qamo had thrust a spoon into ‘Mahlompho’s mouth to stop her from biting her tongue.
“I noticed that something might have happened to the deceased (‘Mahlompho) apart from her being ill,” he said.
“What I picked from the deceased was that her eyes showed that she had been assaulted.”
“I kept quiet because this hit me hard,” Monaleli said.
They drove to Willies Hospital in Khubetsoana.
At the hospital, Qamo left them in the car as he went to fetch a wheelchair for ‘Mahlompho.
Monaleli said this gave him a chance to ask ’Mahlompho what happened.
Monaleli said ’Mahlompho told him that Qamo had assaulted and strangled her.
“I asked the deceased why she did not call for help when what happened. The response was that the accused was strangling her.”
Monaleli said ’Mahlompho told him that Qamo had strangled him for a long time.
The court heard that later on the same day, after helping the couple to the hospital and back, Monaleli sent Qamo a voice note on WhatsApp telling him that he had ruined his day.
Monaleli said he later went to the couple’s house with his wife but they could not see ’Mahlompho because they were told that she was still asleep after taking her medication.
Monaleli said seeing that his friend’s family needed help, he arranged for them to see a psychologist.
The crown’s second witness Rorisang Mofolo, ’Mahlompho’s sister, said she received a call on September 4 last year from Qamo telling her that ’Mahlompho had fainted four times.
Mofolo said Qamo told her that he suspect ’Mahlompho might have a heart problem but she was now feeling better after giving her some sugar.
“He also told me that they were waiting for a car to take them to Willies Hospital,” Mofolo said.
“After our conversation with the accused (Qamo) I called my nurse friend to ask about the temperature change issue, she said it might be Covid-19 so the deceased should get tested,” she said.
She said every time she tried to call ’Mahlompho the phone would be picked by Qamo who would speak on her behalf.
Mofolo said during a video call with ’Mahlompho, in Qamo’s absence, she noticed that she had bruises on her face.
She said ’Mahlompho told her she had fainted three times.
Mofolo said she was relieved after Qamo gave him the impression that ’Mahlompho was recovering but was shocked when Monaleli called and insisted that she goes to see her sister.
She said in their telephone conversation ’Mahlompho said she was “trapped in a hell of a marriage…this man is a psycho”.
Mofolo said ’Mahlompho told her that at one point Qamo had helped her pack her belongings and that of the children so they could leave but suddenly changed his mind and said she would not leave with the children.
She testified that ’Mahlompho said Qamo started assaulting and choking her, saying she refused to give his mother M20 yet she had M30 000 in her bank account.
Mofolo said ’Mahlompho was later taken to  Maseru hospital which quickly referred her to Bloemfontein where she died a few days later.
She said when a nurse at the Bloemfontein hospital called her to break the news of ’Mahlompho’s death she advised her to go to the police to open a murder case.
She reported the case at the Mabote police station.
She said when she arrived at the couple’s house she found Qamo crying in the bedroom.
Mofolo said Qamo said: “I am very sorry, please promise me that you will be there for me and the kids and that we will plan the funeral together”.
Mofolo said she did not reply but she went out.
Tholoana Lesenya

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