MASERU — It is one of the ministries with a long name and Moahloli Mphaka, the principal secretary for Trade and Industry, Cooperatives and Marketing, says that alone goes to show it can never be business as usual at the Trade Building in the central business district of Maseru.
In an interview on Monday this week, Mphaka who was appointed to his current position in November last year, emphasised the need to re-engineer the ministry’s activities and put more energy on developing sectors which have immense potential to develop the economy.
He said the government through his ministry promotes creation of local industries and small to medium businesses run by locals in addition to efforts to attract foreign direct investment.
However, he said what was more important for Lesotho was to continue improving the business environment and become a skills-based nation capable of diversifying into potentially lucrative sectors.
The Ministry in collaboration with the World Bank-funded Private Sector Competitiveness Project (PSCP) over a year ago established a one stop business facility and made it easy for investors to register companies under one roof and within a week.
Mphaka said with continued realignment of efforts, more achievements can be made in his ministry.
“What we need is to be realistic when it comes to the development of our approaches. We need to identify in which sectors we can do better, from manufacturing, tourism to agriculture and others. There is need to properly coordinate efforts by ministries and sectors that mutually support each other to ensure we meet our targets. This is why we now have a turnaround strategy of the Basotho Enterprises Development Corporation (Bedco) to meet the demand in the current economic trends, which is more and more innovation in order to grow businesses. Our ultimate goal is to improve the quality of life through significant reduction of poverty.”
He said through efforts by BEDCO and the Lesotho National Development Corporation (LNDC), stimulation of opportunities should continue in order for businesses to move from informal to formal.
“There are benefits to having businesses that are formal. It means an increase in the country’s revenue, which would be used in various developments. It also tells us there is quality production, consistency in supplies, attracting new partnerships, an increase in profits and creation of jobs.”
Mphaka said local businesses should take advantage of the benefits that come with sharing borders with South Africa.
“South Africa is a big economy and unless we find ways to position ourselves as a skills-based, competent and capable nation, we will continue to blame our neighbour for our inability to penetrate our own formal markets. We need to “up the competitiveness game” and readjust it when the situation calls for such measures.”
He added also important was to remodel home grown efforts in line with the economic environment.
“We have a history of working together, as communities and families. The concept of cooperatives can help deal with our challenges of business financing. It can also be effective among young skilled people who after graduating from universities can come together and start small businesses.”
He said there are many areas to explore.
“We can start at looking at doing businesses that can feed into the South African economy such as its vehicle assembling plants. Let’s be realistic, we do not have resources and enough human capacity to immediately establish our own high-powered equipment to assemble cars here, or manufacture major vehicle parts. But we can start from manufacturing car seats for example. We can also identify other areas we can penetrate and that way, we can establish linkages that could lead to more positive developments,” Mphaka said.
He stressed that through well managed cooperatives, companies stood a better chance to survive the current economic meltdown.
“We are therefore passionate about strengthening this concept. We want to facilitate the making of “real businesses” in the form of cooperatives.”
He explained operations by cooperatives should be team-based and growth-oriented.
“The current trend is no longer on what moneymaking ideas you are keeping away from everybody but sharing what you know for more business opportunities,” Mphaka said.
He said Lesotho has the human resources but unless people shared business ideas to promote diversity, the majority would remain poor.
Mphaka said it is difficult for real businesses to thrive in a country where the majority of people are poor.
“We realised there is high unemployment and more people are likely to become poorer if there are no immediate interventions. We decided to tap into the agriculture sector and registered more than 30 agro-based cooperatives.”
The cooperative members, he explained would be trained on organic vegetables and fruit production and also use of technologies such as greenhouses while at the same time, learn the importance of maintaining high standards of operation and consistency in production.
“With adequate support, many of the unemployed people can help themselves and contribute to growing the economy.”
He further explained that while some people believed in selling their products to foreign markets, real markets also exist locally.
“What we need is to facilitate the creation of a well-capacitated and vibrant agro-business sector that understands the needs of the markets and understand that food production and processing is the future of our economy.”
Mphaka further explained the need to also continue developing other areas of business such as the garments sector.
“The textile sector will remain a priority area as seen by the establishment of small factories in Ha Tikoe as a way to encourage local investment and also the establishment of two skills development centres in Maseru and Maputsoe to build managerial capacity.”
He said despite having access to the American markets through the African Growth and Opportunity Act (Agoa), which offers tangible incentives for some African countries to continue their efforts to open their economies and build free markets, his ministry was also looking at breaking into new markets through various initiatives that include the Southern Africa Development Community Economic Partnership Agreement, Southern African Customs Union (SACU) and the European Union.
“This would demand we become serious on our operations, timely supply of orders and high standards and quality, which is what we have been grappling with for years.”
Mphaka said his Ministry would also want Lesotho to be known as producer of other goods, not just makers of textile garments.
“Together with the Lesotho National Development Corporation (LNDC), we are taking a fresh look at developing the wool and mohair sector because we produce significant quantities.”
He explained the establishment of the wool and mohair scouring plant in Butha Buthe, which is underway, is going to help add value of the produce while farmers are also going to realise more profits.
“The company is going to trigger other spinoff businesses that include production of essential oil used in the manufacturing of cosmetics.
“We need to utilise these spinoffs and “make happen” our plan for major initiatives to trigger the formation of other companies.”
He said there were also efforts to establish companies that would manufacture clinical syringes and also work at producing energy-related products.
“The whole idea is to stimulate the industry and demonstrate the capacity we have while at the same time, work at attracting a wide range of investors from Asia and America to Europe and many others.”
Mphaka further explained the need to work hard at developing the country’s infrastructure, particularly in transport and logistics to make the business environment more attractive to a wide range of investors.
Commenting on the rampant selling of expired goods by some retail outlets, a practice that is common in all parts of the country, Mphaka said his ministry was deeply concerned. He said the cabinet recently passed the Consumer Policy that would help enhance understanding of consumer rights and furtherance of continuous efforts to protect consumers.
“We know that producers, buyers and sellers, all have rights but what is wrong is when one takes away the other’s right. To a larger extent, we would like to protect the rights of consumers and empower them to demand their rights.”
He said the finalisation process of the Food Control Bill would also further help strengthen protection of consumers.
“When food can mean possible poisoning and even death, we should all be concerned about the quality of food on the market.”
He said in this light, his ministry has prioritised the development of standards and testing facilities to protect consumers and is currently working at developing partnership with some tertiary institutions.