- Says it has retarded economic growth
- Urges politicians to put country first
UNLESS the government moves swiftly to address the current political instability hampering economic growth, Lesotho faces a serious economic crisis from which it would be difficult to extricate, a top banker has warned.
Nkau Matete, is Nedbank Lesotho’s new managing director. He in June 2019 became the first Mosotho to head the South African headquartered bank in its 22 years of existence in Lesotho. He has also held several other high profile positions including leading the operations of financial services conglomerate, Metropolitan, in Lesotho before his move to Nedbank.
Mr Matete this week became the first high profile business leader to speak candidly against the instability resulting from the ongoing vicious political power struggles in coalition government parties, mainly the All Basotho Convention (ABC), and the resultant negative impact this has created on business and economic growth. He said the current situation cannot simply be allowed to continue as it had created devastating effects on the economy and business.
In fact, Mr Matete pleaded with not only the Thomas Thabane led coalition but “all the politicians” to put the interests of ordinary Basotho first and address the current political instability that he said had caused untold suffering to the nation.
He also said it was time the business sector stepped up and told politicians that the current political instability had scared off investors and “we just can’t continue like this”.
Mr Matete said this yesterday in an exclusive interview with the Lesotho Times. His remarks come against the background of political instability bred by the vicious infighting in the ABC and the other parties in the governing coalition. While all the parties in the coalition have experienced their share of internal upheavals, the power struggle in the ABC between Dr Thabane and his deputy, Professor Nqosa Mahao, has been the most vicious and poses the greatest threat to the stability of the government. The ABC is the lead member in the four party coalition government. The Mahao faction has since filed a no confidence motion in parliament seeking to oust Dr Thabane.
All hell broke loose early this year when Prof Mahao contested and won the deputy leader’s post against the express wishes of Dr Thabane who had dismissed the former as a political novice unsuitable to deputize him.
The refusal by Dr Thabane and his allies to accept Prof Mahao’s victory set the stage for a bruising power struggle that has effectively stalled economic growth and service delivery.
Previous talks and litigation have so far failed to end what has now clearly become a war of attrition between the two ABC factions. The infighting resulted in the 17 June 2019 “expulsion” of Prof Mahao and his strong allies, Lebohang Hlaele (secretary general), Samuel Rapapa (chairperson), Montoeli Masoetsa (spokesperson) and his deputy Matebatso Doti.
Prof Mahao and his allies refused to take the “expulsions” lying down and they reacted by “suspending” Dr Thabane from the party. They were only stopped in their tracks by Acting Chief Justice ’Maseforo Mahase from holding a special conference on 6 July 2019 to formally “expel” Dr Thabane. Justice Mahase has since been ordered by the Court of Appeal not to preside over ABC cases and this week the Mahao camp announced that they will now hold the special conference on 7 September 2019. It remains to be seen whether or not they will go ahead and expel Dr Thabane.
The resultant political instability is giving Mr Matete headaches. And Nedbank’s new managing director feels it is time he and other business leaders engaged the politicians and told them to resolve their differences because “we can’t continue like this”.
“The economic environment has been very bad. It is bad for everybody not just the banks but the business sector in general. Banks keep money and that money comes from businesses and it also comes from individuals. So when there is low economic activity and the economy is not growing like it hasn’t been growing, it is really bad. Last year we only registered 1, 6 percent growth and it is estimated that the growth (in the 2019/2020 financial year) will not be more than 2 percent. This means the economy is stagnant. This is partly because of the global economic situation and we are also affected by global developments.
“But here in Lesotho, we have not covered ourselves in glory. We have this never-ending political instability which has a huge effect on the business climate. Business people are investors. They assess the environment and if they feel that the political risk is too high there will be a cost to that. They will factor that cost into whatever they do because it is a risk that has to be paid for by someone. So who pays for that here in Lesotho? It is you and I, the ordinary people. And the economy is suffering because of the instability. So we really have to put our house in order.
“Quite often, business is shy to talk but there comes a time when somebody just needs to say, ‘hey we can’t continue like this’. I think that’s what we, as the business sector, need to start telling our political leaders. And it’s not just government but also the opposition. Our politicians need to consider the people and not just themselves,” Mr Matete said.
He said there had been previous attempts to engage politicians to clean up their act but those attempts had so far failed to yield the desired results. Mr Matete said even the informal meetings they used to hold regularly as the business sector with Finance Minister Majoro had stopped this year, probably because of the never ending infighting in the ABC.
He said while they had approached government leaders to register their concerns, it was always “a big challenge when you know that people’s minds are focused on succession”.
“It is a challenge when people are preoccupied with who wins and who loses as well. It’s a challenge to talk to the politicians when all they are thinking about is when the next vote of no confidence will be held.
“Such people are just not in the right state of mind to listen because their focus is on politics and not on moving the country forward. So even when you engage them, they will speak to you but without any commitment. It’s like you’re speaking to a person who doesn’t know whether or not they will still have a job tomorrow. The unfortunate part is that there’s lack of focus and continuity in what government thinks or tries to do.
“So the situation is not good at all. It is really dire. As business people we have engaged government. In our case, our political head is the Finance minister (Moeketsi Majoro). We had informal dinner meetings with Dr Majoro that were held regularly last year but we have not had them for the past six months and that is not good. And this (failure to hold the meetings) is precisely because of politics because since February you can’t speak anything to government or the All Basotho Convention because there is this never-ending dispute over which one is the right leadership of the party.
“The political leaders need to grow up and stop looking at their own personal gains and think about the man in the street and how we can move this country forward. We have become an embarrassment to the region and the world. So we (as business) need to play our role by engaging them to take the country forward,” Mr Matete said in the unusually candid remarks from a business leader in Lesotho.
Businesses have been complaining of lack of payment from the government for services rendered. Because government is at the centre of economic activity in Lesotho, and many businesses rely on it in one way or another due to the absence of a developed and expansive private sector, its woes inevitably create negative ripple effects across the economy. Some small businesses have complained they have had to close shop due to the government’s failure to honour its commitments, worsening an already bad employment situation.
Dr Majoro himself has previously spoken against the negative impacts of political instability on economic growth. He has also tried to rein in government expenditure but seems to have lost the battle.