At face value the closure of Philips Lighting factory in Tikoe, the suspension of operations at Saxenburg in Mohale’s Hoek and the closure of Ternsportswear in Maputsoe give one the impression that Lesotho is headed for “de-industrialisation”, if one could use that term in a country with barely any industry to talk about.
Yet, on the other hand, the Lesotho National Development Corporation (LNDC) is also working hard to court and secure new investors.
LNDC’s Caretaker Chief Executive Officer, Tseko Alfonse Bohloa, reassured journalists at a press conference this week that, not only are there alternative players waiting to occupy the factory shells left by enterprises that closed shop, but there are also new players waiting to invest in Lesotho.
As Philips closes shop, LNDC told the nation that an automotive firm, Johnson Controls, had been waiting for space to become available at the Tikoe Industrial Area and was likely to start operating in the next three months.
It is reassuring to hear that Johnson Controls had already trained staff in car seats manufacturing.
The same applies to the space vacated by Ternsportswear set to be occupied by a Canada-based company which will produce leather seat covers for BMW vehicles at Ha Nyenye.
To LNDC’s credit, there are new players and fresh enquiries from potential investors. These include a plastic hanger manufacturing company called GTA from Dubai which is said to have commenced operating two weeks ago with an initial staff complement of 25 which is likely to increase to more than 100.
We understand the 11 factory shells under construction at Tikoe Industrial Estate have already been booked for occupation.
On the whole, LNDC gives the impression that all is well in the sector and even goes on to mention that the corporation anticipates that the national average of 40 000 jobs in the sector will be maintained and sustained, more or less.
We have no reason to question the integrity of LNDC’s reading of the situation, yet we believe we need to look deeper at these signs of foreign investment.
First of all, it’s not enough for LNDC to pat themselves on the back because they can project sustenance of the 40 000 jobs around the entire country in this sector.
Their brief, last time we checked, was to facilitate the creation of more and more jobs by encouraging investors, both foreign and local.
Beyond that, it should not be just about the number of jobs, but it should also be about the quality of remuneration such jobs would guarantee to the workers.
We can have hundreds of thousands of people getting “employed” only to take home miserly wages which cannot sustain families, let alone significantly boost workers’ buying power to guarantee the trickle down of benefits to the economy’s retail or consumer sector.
Besides, what the LNDC should be worrying about is the extent which they are trying to retain any investors. The question should be: Are there any policies in place towards the realisation of such a goal?
The fact that a departing employer is not going to leave without paying out terminal benefits is good news.
But, in itself, it is nothing to write home about because hardly have we seen terminal benefits sustaining families in the long run, unless LNDC were saying such benefits would be administered in some trust fund where they would be used as capital to start projects to sustain livelihoods in the long-term.
The interventions Lesotho needs more are those that would explore fresh areas of investment.
We get the impression that for LNDC, just getting its factory shells fully occupied by tenants seems to be an end. This should not be the case for a public institution that is charged with the mandate of building industry and creating jobs.
Significant strides have already been touted in agriculture by the coalition government. We would encourage more effort to be directed towards agriculture and related industries beyond the talk about the Basotho Fruits and Vegetable Cannery which we have already heard ad nauseum.
Someone should roll up their sleeves and get their hands dirty in order to pull Lesotho from the brink of a precipice overlooking a pool of insolvent unemployment and all the attendant social ills such as crime.
Indeed, LNDC has done a lot of work towards fulfilling its mandate, we do not doubt it.
However, we are simply saying the challenges facing the Kingdom are new and there is no template of solutions to address them. This means entities like LNDC have to think outside the box and come up with innovative ways of creating jobs.
Foreign investment is what every country would hope for, but regional investors are preferable while local investors are the most desirable.
As the LNDC rightly observed in the case of the struggling Mohale’s Hoek-based Saxenburg clothing manufacturer, hosting a regional investor as opposed to an Asian or Western one has got a distinct advantage in that producing for the regional market “makes it less sensitive to the prospect of the loss of overseas orders and the likelihood of AGOA termination”.
For this reason, a lot of work needs to be done to court especially Basotho in the diaspora who have the wherewithal to create jobs back home.
It all begins at policy level; some affirmative action of sorts would go a long way towards reassuring local investors that there would be something in it for them should they choose to invest their money in the motherland.
