COVID-19 has governments at all levels operating in a context of radical uncertainty and the regional and local impact of the pandemic is highly diverse, with significant implications for crisis management and policy responses. Public Eye news editor TEBOHO KHATEBE MOLEFI (PE) engaged former development planning minister, TLOHELANG AUMANE (TA) for an in-depth look at the territorial impact of the COVID-19 crisis in its different dimensions: health, economic, social and fiscal impact as a former policy director at the heart of government developmental plans and initiatives. He offers a forward looking perspective as well as points for policy-makers to consider as they build more resilient responses.
PE: The Coronavirus pandemic continues to take its toll on the African continent and the world as countries scramble to contain the virus, and the economic impacts grow. Is our government doing enough to buttress the economy against these impacts?
TA: No, they have not yet developed a national economic recovery strategy. Government leadership has become more important than ever during the COVID-19 pandemic. People not only in Lesotho are looking to government to lead and help them weather the storm. They are refusing to take the lead, even though people expect them to do so. They have not involved other stakeholders in the fight against COVID-19, opposition, chiefs, councilors, churches, NGO etc.
PE: What policy responses would you propose when it comes to protection of economic growth, income as well as sectors at risk?
TA: Ensure close coordination of policies, programs and budget expenditure across government ministries as well as collaboration across sectors at all levels of implementation.
- Consider drastic cost cutting measures including downsizing government, increasing efficiency and effectiveness at all levels of government. This could include increasing digitation of government functions and services and put more services online.
- Come up with the national economic recovery plan that reflects the narrowed fiscal space. Some policies do not require investing in significant new resources, rather optimizing existing systems such as optimizing procurement systems across sectors, identifying efficiencies in supply chain management attending to the wage bill.
- Ensure that the country does not backslide on health and education indicators by improving and maintaining essential support infrastructure.
PE: Are economic policy options targeting households, businesses, and the financial sector viable, and sustainable?
TA: The government needs to prioritize job creation, by establishing initiatives to bolster job creation, as well as incentives to minimize job losses and unemployment, increase technical and vocational training (TVET) as well as enabling technology and digital connectivity by ensuring that government digitizes and puts services online.
PE: Should Covid containment in Africa and globally fail, where do you see small economies like ours heading?
TA: Recession and backsliding on the gains made in health, education and the economy.
PE: And in what ways do you see COVID-19 likely affecting the food supply?
TA: We need to ensue food security by expanding social assistance programmes for the jobless and neediest, provide emergency support to small scale food producers, and invest in a more secure food supply.
PE: In that light what should be the country’s policy paths for the short, medium, and long run?
TA: Invest in health worker supplies, reallocate health care workers and ensure that fewer sit in offices at the headquarters, optimize procurement and supply chain management, reopen schools safely, prioritize the needs of teachers and parents, incentivize education and include education in the economic recovery plan.
Ease pandemic related restrictions that inhibit economic activity, boost the informal sector and consider public works program that is more transparent and without ruling parties’ interference. Expand community health care programs, invest in public infrastructure projects, enable entrepreneurship and job creation, ease access to finance and prioritize employable skills training.
PE: The Coronavirus containment measures are expected to bring additional economic hardship in a country like Lesotho where informal labourers account for a large percentage of the total workforce, has government done enough to protect this sector?
TA: No, it has hurt the sector without compensation for incomes lost.
PE: There is also the danger of government’s history of cracking down on these informal traders, what can you say on how government has handled the sector since announcement of the various lockdown we have had?
TA: Initially, they were treated well but lately, government has neglected them and resorted to food parcels.
PE: It remains a fact that many of our citizens defy calls to stay indoors and have had several reports of them clashing with security forces as they seek to continue to do business and make a life. How do you think this should be handled, finding a balance between survival and containing the spread of infection?
TA: There was a problem with the kind of lockdown enforced by the current government. A curfew and home confinement, geographic containment and prohibition of gatherings, these where there is no e-commerce, no data on hotspots was too tough.
PE: Let’s look at the implementation of social safety net policies such as offering emergency income grants to workers who lost jobs, food assistance or even going as far as abolishing basic bank transaction fees, can the country afford and sustain these?
TA: We are not sure how far they can go because government does not communicate nor does it account.
PE: How can we arrive at an economic policy, in the face of COVID-19, guaranteeing the proper functioning of essential sectors, providing resources for people hit by the crisis, and preventing excessive economic disruption?
TA: Come up with economic recovery plan that reflects decreased budget and reprioritized activities or milestones.
PE: There has been talk of proposed tax relief, what can you say of adding senior government officials, legislators and all other statutory bodies’ high earners pay cuts to ease tension on the economy?
TA: That would be madness, government officials tax relief is not necessary when you can’t finance basic services.
PE: And we think a series of more economic steps should be taken, in the short term; the country needs greater fiscal space to boost health expenditure, contain the spread of COVID-19, help the hardest-hit sectors, and stimulate domestic consumption, while the Central Bank should cut interest rates and channel liquidity to firms and households – how far can these go towards economic recovery and sustenance?
TA: Government intervention is required to support startups and introduce policies that are pro-private sector.
PE: Would you agree that the country will need debt relief, budget supplements, and a commitment to get back to business as usual as soon as possible to come out of the Covid era economically unscathed?
PE: Sadly, it seems like the situation of the poorest people is summed up as a condemnation to die as even as government issues directives for people to stay at home, no actual financial bailout or tax relief is guaranteed. People who live from hand to mouth, barely earning enough to feed their families each day, know that hunger may kill them before Coronavirus does – were you still developmental planning minister, how would you address these people’s plight?
TA: I hate lockdown that is not based on facts or data and not targeted at hot spots, I would advise against it.
PE: Some countries like Rwanda and South Africa have taken bold steps to protect businesses, how bold can we be to save our economy and people’s lives?
TA: We definitely need more government intervention to support private sector as earlier indicated, incentivize job creation and reform the business environment.
PE: Generally, we have seen local businesses close shop as revenue dwindles as a result of the pandemic, we have seen people lose their jobs, and many more others will soon also be unemployed. Advise us, where to from here as a country – what can you tell government?
TA: Prioritize food security, essential health services, school enrolment and job creation.
The former planning minister’s views are mainly based on brief developed by the Havard Ministerial Leadership Programme contained in the document ‘Human development for economic recover’ – considerations for decision makers. Below are some of his main points for consideration in the country’s COVID-19 economic response:
- Lesotho’s economy, like most countries, is integrated into the global economy and is equally vulnerable to the repercussions of the global COVID economic collapse.
- Lesotho’s reliance on remittances from Basotho nationals working in South Africa has been adversely affected by South African economic situation.
- The consequences of these factors are impacting small businesses and the self-employed in Lesotho. Garment manufacturing and tourism has also been severely impacted.
- Lesotho government has very limited fiscal capacity to provide social support to adversely affected groups. Additional international borrowing is problematic and traditional sources for donor support cannot substitute the funds needed.
- Bottom line: it will take a long time for the Lesotho economy to recover regardless of how soon Lesotho is able to access COVID-vaccines.
- As a low income country Lesotho will likely get priority access to COVID vaccines though COVAX, as well as the AU vaccine procurement facility.
- The next challenge will be the capacity of the health system to deliver a national vaccine programme.