- more than 300 000 youths desperate for jobs, premier says,
- blames “chronic political instability” for low foreign direct investment in the country
PRIME Minister Moeketsi Majoro says the economic situation remains precarious as international investors are reluctant to set up shop in Lesotho due to the chronic political instability in the country.
Dr Majoro said due to the low investment, more than 300 000 youths were desperate for jobs. This translates to about one seventh of the country’s 2, 1 million population. So serious is the unemployment crisis that at least 20 000 graduates have been looking for jobs for the past decade, he said.
The premier said this in a recent interview with the Brenthurst Foundation of South Africa. Established in 2004 by the Oppenheimer family who are renowned business moguls, the foundation regularly brings together presidents, prime ministers, ministers, thinkers and academics “to consider ways to enhance the African continent’s economic growth and development”.
A year and seven months have passed since Dr Majoro replaced Thomas Thabane as prime minister on 20 May 2020. He came to power on the back of promises to implement multi-sector reforms to end endemic instability, stabilise the economy and deliver services to long-suffering Basotho.
But as his interview with the Brenthurst Foundation which was published last week shows, Dr Majoro and his government are nowhere near achieving their goal of economic prosperity.
Instead, the premier believes the country’s challenges are worsening as international investors remain sceptical about the government’s ability to address chronic political instability.
He said investors remained on the fence despite his government’s ongoing efforts to address their concerns through processes that are expected to culminate in the implementation of constitutional, security sector, governance, judicial and media reforms.
“The biggest challenge for Lesotho is the low investment rate which translates into lethargy in creating jobs which Basotho need,” Dr Majoro said, adding, “Lesotho’s young people are very desperate for jobs”.
“We are talking about at least 300 000 youths that must be having jobs. We are talking about at least 20 000 graduates that have been looking for jobs for the last 10 years. They must get jobs but for them to find jobs, there must be enough investment in diverse industries in Lesotho. That’s really where the limitation is.
“We can then work backwards and ask why there is low investment in Lesotho. This is down to the chronic political instability. This has affected the decision-making by international investors. We are trying to work through that through the reforms process but it’s very difficult to get everyone to buy into the story that Lesotho can transform.”
He said Basotho had grown accustomed to the government stepping in to invest in various sectors and providing them with jobs.
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However, this was no longer possible nor sustainable under the current global and regional economic climate wherein government finances had been depleted due to lower returns particularly from the Southern African Customs Union (SACU), he said.
Besides convincing reluctant international investors, those who were already established in the textiles and other sectors had to diversify their products and seek new markets as well, he said.
A mind shift was also needed to get locals to stop relying on the government and start seeing themselves as investors and creators of much needed jobs, Dr Majoro added.
“Most Basotho believe that you can just flick a light switch so that jobs that were not there will suddenly be there. In the past, the government took up the slack for the low private investment. But government balance sheets are dwindling, including the SACU revenues. This leaves Lesotho facing two challenges: low private sector investment as well as low government support and investment.
“So, we are moving in a very dangerous direction. There is very little we can do about public finances. Looking ahead, I see a depressed environment and I don’t see recovery in that. That leaves private investment as the only option for Lesotho. So how do we get Basotho to see themselves as investors and how do we change the psyche of Basotho from looking up to the government to doing things for themselves?
“How do we get the investors that we already have expanding their operations?
“How do we go and ask a business operator in Lesotho to talk to a global operator about locating their operations in Lesotho? Those are the conversations we should be having. We need dialogue and more transparency with the private sector. We need to understand what they (investors) want and need to invest in Lesotho,” Dr Majoro said.
He said there were no shortcuts to attracting foreign investors. Therefore, the country had to urgently address lingering concerns about the perennial instability, he said. In addition, the government has to come up with clear policies on investment issues to make it easy to do business in Lesotho, he said.
“We have to speak to an investor in Tokyo or New York or Dubai who would want to come to Lesotho. We need to send positive messages that while you can go to South Africa and other places in the region, Lesotho is the place to go to when you want to invest in manufacturing and other sectors.
“Does this require us to finish the quarrels in the political space or address the issues of policies and taxation? Yes, we must address all these.
“We have a rich cultural and historical heritage but we have not sold that. A lot of people would be fascinated to come and see what nature has done for us. Lesotho has unbelievable scenery. You can come and walk for hours in the mountains and breathe in the freshest air. You can come with bottled water but you will soon throw it away and drink directly from the streams,” Dr Majoro said.