All is not lost for Lesotho’s economy if peace prevails

It’s easy to cry about the bleak prospects of Lesotho’s economy.

For such a worldview, all the ingredients for a template of hopelessness are there.

Besides the much larger economic stress after the global recession in recent years, the rand on which the loti is pegged has been under intense pressure over the past year. After months of continuously depreciating, the effects are clear for all consumers to feel as living costs in all forms have been pushed beyond what incomes can contain.

Add to this, Lesotho had already been sitting on its edge because its exportoriented large textile factory model seems to be headed for a wind down.

The African Growth and Opportunity Act (AGOA) trade agreement on which the textile firms’ business model is hinged is unlikely to be extended beyond 2015.

The duty-free and quota-free advantage that the textile sector currently enjoys would come to an end, a factor which could deter current and potential investors.

The sector is a significant employer, accounting for tens of thousands of jobs, never mind the measly wages the workers take home. Any serious change in the sector will wreak a tsunami on the already dire unemployment situation, conservatively estimated above 30 percent.

But it’s not all doom and gloom.

Besides the much talked about AGOA, there is a similar, less familiar vehicle in place which countries like Lesotho can ride on to reverse the negative impact that can weigh down the economy after AGOA ceases to help.

The European Union (EU), under the Generalised Scheme of preferences and the Everything But Arms (EBA) arrangement, offers least developing and lower income countries like Lesotho trade preference of duty-free and quota-free exports into the EU of any nature with the exception of arms, sugar, bananas and rice.

The uniqueness of local textile products such as the Seshoshoe cloth can be explored and marketed more vigorously beyond the country’s borders. Only this time such initiatives have to be undertaken at small-to-medium scale range, a departure from the massive industrial structures under the export model under AGOA.

The same can be done with the production and processing of fruits which can be canned for export.
The Lesotho National Development Corporation (LNDC) has already collaborated with the army to pursue this route.

The country has a cool temperate climate that can be harnessed towards this direction.

An all-out drive to bring foreign visitors to the country’s shores regularly could see tourism changing the mountain kingdom’s economic fortunes.

Beyond that, Lesotho can vary its course in attracting investment. Here the policy could move towards attracting investors from the country’s Diaspora.

Targeted investment opportunities specially tailored to encourage indigenes to come back home and invest in their country could reap significant rewards and reduce unemployment.

This does not mean the drive to attract foreign direct investment will be suspended.
Instead, a multi-pronged approach would, in the long run, rescue the economy from a deadly path towards a precipice.

In any case, most of the highly skilled Basotho in the Diaspora are direct beneficiaries from the National Manpower Development Secretariat fund.

These skilled Basotho do not need much prodding to encourage them to plough back their money and skills back home.

They went out there for years and acquired money and knowledge which they can gladly invest in their home country.

They are not looking for incentives which are out of this world.

But perhaps the most sought-after and non-negotiable factor for this lot is peace and the rule of law.
For this reason, we find it regrettable that on Monday morning two private homes were attacked by yet-to-be-known criminal elements.

What is discouraging is that the assailants even had the audacity to attack the newly appointed police commissioner’s private residence.

The dastardly twin attacks, committed during the wee hours of Monday, threaten to reverse the positive drive towards peace made by the coalition government whose principals have been preaching peace with a no-nonsense attitude towards all manner of crime.

Surely, the armed attacks on two homes in Maseru must be heartbreaking for Prime Minister Thomas Thabane who, together with figures like Minister in the Prime Minister’s Office Molobeli Soulo, has been traversing the country preaching peace and warning war-mongers such as some Famo groups and cattle rustlers that the days of impunity are numbered.

It is such incidents which scare away not just foreign investors, but also Basotho in the Diaspora who have the money and the skills to invest for the country’sbetter future. All these people would want peace and the rule of law as a prerequisite before they put their money on the table.

There are just too many cases of such attacks in recent years some of which were even fatal but which to this day remain unresolved.

While we await police investigations to determine what exactly happened, we urge all patriots to look at this scourge as a common enemy which not only deprives the present generation of peace but also robs unborn Basotho of promise and a future.

Comments are closed.