THE private sector should stop relying on government tenders but instead diversify its customer base, Central Bank of Lesotho (CBL) governor Retšelisitsoe Matlanyane has said.
Speaking at the midterm economic outlook review on Monday, Matlanyane said business people should start seeking other means of making profits because in the near future the government will not be able to support their businesses.
“You are already complaining about late payments to the suppliers. Be aware that there is a time that the payments will be even more late or at some point the government might not even seek your services,” Matlanyane said.
“You should come up with plans that will ensure that you are able to stay in business even in that situation.”
Matlanyane said the current economic climate does not allow the government to be the biggest spender anymore whether it is through being the biggest employer or through being the biggest customer for businesses.
“It is time for every one of us to play their respective roles for the improvement of our country and our economy,” she said.
She added that those in the private sector should “explore other business avenues as there are a lot of sectors with potential to generate revenue that have not been tapped into or explored fully”.
“There is absolutely no need for me to use foreign reserves to buy vegetables while we have land and soil or buy water or even import wool and mohair scarves while we can do these things for ourselves,” she said.
“There is a time when I will not use the reserves for these things,” she said, adding: “We need to use our reserves for things that we know that we cannot produce for ourselves like fuel and medicine.”
She further said retail stores should get produce from local suppliers and sell it in their stores instead of importing.
“Retail stores, if you call yourselves citizens of Lesotho then get your produce from local suppliers and not from South Africa and the Ministry of Trade should get its act together to ensure that producers here get the support they need,” Matlanyane said.
The forum was meant to evaluate and engage concerned stakeholders in order to come up with solutions to some challenges.
Speaking at the same forum, the Private Sector Foundation of Lesotho (PSFL) CEO, Thabo Qhesi, said concerned stakeholders should ensure that they level the ground for the private sector to do its job.
“There are many structural challenges that need to be addressed in order for the private sector to be able to do its job well,” Qhesi said.
“Starting a business is a challenge in this country and access to finance is just one of the many challenges that are facing the private sector,” he said.
“There is the issue of lack of quality infrastructure and late payments made to suppliers by government amongst other things.”
He added that some efforts have been made to improve the situation, especially access to finance including the establishment of the credit bureau.
“However our rankings in the ease of doing business are not improving instead they are getting bad, meaning conditions are becoming more difficult towards access to finance,” Qhesi said.
He said in terms of other means to get access to finance “we seem to explore or look at the partial credit guarantee scheme more than anything else and we package it in the same manner for all types of businesses without considering that some are start-ups, while some are big companies”.
Fako Hakane, the executive secretary of the Lesotho Chamber of Commerce and Industry (LCCI), said there is need for a change of mindset from the public sector and see the private sector as a partner.
“As long as we export our produce there isn’t much that can be achieved. We have to look at the issue of value chain for our products before exporting them, as there is a lot of money that is lost on the way when we export raw wool and mohair and diamonds,” Hakane said.
LEC to switch off households over debts
MASERU – The Lesotho Electricity Company (LEC) will from Tuesday next week begin switching off clients who owe it money.
The LEC issued a seven-day ultimatum to all customers who owe it on Tuesday last week. The deadline ends on Monday.
It is expected that the LEC will begin switching off households that have defaulted.
The state-owned power company, however, is not going to touch any government department or business entities that owe it on grounds that they are in payment negotiations.
The LEC move comes barely two weeks after it cut electricity supplies to the Water and Sewerage Company (WASCO) thus causing it to fail to pump water to communities countrywide for more than two days.
The LEC says it is owed close to M200 million by government departments, businesses and individuals.
The LEC spokesman, Tšepang Ledia, told thepost that the government and the businesses will not have their electricity cut because they are in negotiations.
“We are in negotiations with the government and businesses and hopefully they will pay,” Ledia said.
“We advise the ordinary people to pay their debts before the 20th of March 2023 or else we cut the services,” he said.
The LEC says it is running short of funds for its daily operations.
In December last year the company increased power tariffs by 7.9 percent on both energy and maximum demand charges across all customer categories for the Financial Year 2022/23.
Last week the LEC boss, Mohato Seleke, said postpaid consumers and sundry debtors owe the company M169.4 million.
He said unless the debtors pay he will be unable to buy electricity from ’Muela Hydropower Project, Eskom in South Africa and Mozambique’s EDM.
This, he said, could cause serious load shedding in the country and could be devastating for businesses.
Seleke said the LEC spends M630 million monthly to buy electricity.
“If postpaid consumers do not settle their debts this could prevent the LEC from being able to buy electricity which can lead the country to encounter load-shedding,” Seleke said.
Seleke said collecting debt from government department ministries was a challenge as there is an understanding that since LEC is a state-owned company, it will continue supplying government agencies with electricity and they will settle their bills when they have funds to do so.
Seleke said the LEC has lost M21 million to vandalism during this financial year.
Bumper payout for former mineworkers
MASERU – AT least 11 316 current as well as former mine workers are set for a bumper payout after Tshiamiso Trust began disbursing the first billion Maloti to workers who are suffering from silicosis and tuberculosis.
The payment comes two years after Tshiamiso Trust began processing claims for the historical M5 billion settlement agreement between mineworkers and six gold mines in South Africa.
Speaking at the payment announcement in Maseru last week, the Trust’s CEO, Lusanda Jiya, said it has been two years since they officially began accepting claims.
“Our people come to work every day with the mission of impacting lives for the better, and the first billion rand paid out to over 11 000 families is just the beginning,” Jiya said.
“We know that there is no compensation that will ever be enough to undo the suffering endured by mine workers and their families,” he said.
“However, we are committed to deliver our mandate and ensure that every family that is eligible for compensation receives it.”
Jiya said the Trust is limited both in terms of the time in which they can operate, and the extent to which they can assist those seeking compensation.
Broadly speaking, the eligibility criteria include among others that the mineworker must have worked at one of the qualifying gold mines between March 12, 1965 and December 10, 2019.
Secondly, living mineworkers must have permanent lung damage from silicosis or TB and deceased mine workers representatives must have evidence that proves that they (the deceased) died from TB or Silicosis.
Tshiamiso Trust has a lifespan of 12 years, ending in February 2031.
Over 111 000 claims have been received to date, through offices in South Africa, Lesotho, Botswana, eSwatini, and Mozambique.
The Trust is working with stakeholders in these countries and others to mobilise its efforts and expand operations.
The history of silicosis in South Africa goes back to the late 1880’s when the first gold mines began operations.
The gold was stored and locked in quartz, a special rock that contains large amounts of silica.
Crystallised silica particles can cause serious respiratory damage if inhaled.
In the earlier days of gold mining, dust control, health and safety standards and the use of PPE (personal protective equipment) were not as advanced as they are today.
Tshiamiso Trust was established in 2020 to give effect to the settlement agreement reached between six mining companies.
The companies are African Rainbow Minerals, Anglo American South Africa, AngloGold Ashanti, Harmony Gold, Sibanye Stillwater and Gold Fields.
The settlement agreement was reached and made after a ruling by the Johannesburg High Court as a result of a historic class action by former and current mineworkers against the six gold mines.
Justice for Miners is a coalition of interested parties in the mining sector launched at the Nelson Mandela Foundation in Johannesburg in 2020.
The Johannesburg High Court approved the setting up of the Tshiamiso Trust to facilitate payment by the companies to affected miners.
Farmers cry over cost of livestock feed
MASERU – Lehlohonolo Mokhethi is a farmer who has been running a successful poultry business, thanks to a small loan he got from a local bank.
He now has 300 chickens.
He says his vision is to rear 5 000 chickens by 2025 and employ 30 youths. But he is now grappling with a new challenge: the ever increasing cost of chicken feed.
That is threatening the viability of his business.
“The biggest challenge is that food prices increase every day, feeding is expensive,” Mokhethi said.
“It is quite difficult to make profit in business if each and every day food prices increase. Today I am buying a bag of food with a certain amount then the next day the price has increased,” he says.
“Our customers fail dismally to understand that food has increased and the Chinese are taking our market because they sell at a low price thus I run at a loss.”
Last week, a top attorney in Maseru who is also a prominent farmer, Tiisetso Sello-Mafatle, called a meeting for farmers to discuss these challenges.
She says the government must regulate the prices of livestock feed.
That is critical if the farming business is to succeed, she says.
Attorney Sello-Mafatle says farmers must come up with a structure for livestock feed prices which they would present to the government for gazetting.
“We should state our regulations and give them to the government to make everything easy for both parties because we cannot wait for the government to make regulations for us,” Sello-Mafatle says.
She adds that “farmers should be bullish about what they want and never have fear endorsing new things”.
“I will not be challenged or cry (because of) what life throws at me but I will cry when things are not happening the right way,” she says.
Mafatle says farmers need to know who they are and know the capabilities they have.
“This will help a farmer in becoming the best in any field they are in once they are confident about themselves,” she says.
Karabo Lijo, another participant, said they have to influence the cost of inputs in agriculture, especially livestock feed.
“We have to go back to cost-price analysis where as farmers we are able to derive the selling price and the break-even point in our production,” Lijo said.
“We can also derive the stable or constant mark-ups on our products,” he said.
“We need to do research to increase the ability to produce byproducts which are likely to have the longest shelve life,” he said.
The meeting urged farmers to diversify their products by introducing such things as mushroom farming. They said mushrooms can grow very well in Lesotho due to its favourable climate.
The farmers also demanded that there should be regulations on how land can be sold or borrowed in Lesotho.
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