Trade ministry reserves business for locals



MASERU – The Ministry of Trade and Industry is in the process of implementing Business Licensing and Registration Regulations of 2020 – that will in phases reserve some business activities solely for indigenous Basotho.

Foreign nationals that are operating businesses reserved for Basotho, as per the considered Regulations, will be put a transition period and expectation is that when the transition period expires no foreigner will be operating such businesses.

The ministry’s Director of One Stop Business Facilitation Centre, Monahang Monaheng, speaking to this publication pointed out that after the transition period, the ministerial inspection office will go out to ensure compliance and those found contravening the Regulations will be taken to book.

He said currently, his office is preparing to go out and disseminate information about the Regulations to all stakeholders so that they can know what the Regulations are about and what they offer.

The Regulations were passed by parliament last year in August, a move applauded by the business community; with many indicating that growing economy through such laws and policies encouraged domestic investment and will sustainably grow the country.

The Regulations are meant to promote and develop local entrepreneurship and micro, small and medium enterprises.

As per the Regulations, almost 47 businesses are reserved for Lesotho citizens. Among the businesses that are strictly reserved for Basotho are international road freight transport logistics, road transport logistics, motor dealer, clearing agents, warehousing activities, retail sale of household fuel, bottled gas coal, fast food activities, hair dressing and beauty treatment and repair.

Reserved are also maintenance of motor vehicles and motor cycles, photocopying, document preparation and other specialized office support, electrical, plumbing and other construction installation activities, wholesale and retail sale of alcoholic beverages whether or not consumed on the spot, wholesale and retail sale of meat and meat products, including poultry among others.

Managing Partner at RL Chartered Accountants, Robert Likhang, said the Regulations were critical in promoting Micro, Small and Medium Enterprises (MSME) in the country and were long overdue.

He said they are, however, not sufficient for that purpose; noting that the national investment policy should also force linkages between foreign investors and domestic MSMEs, “that is to say, ensure that they allow the MSME sector to outsource certain manufacturing/services to Basotho businesses, for example a jeans manufacturer could allow Basotho smaller firms to do the cutting.”

“We presume by these regulations that in the future equity participation, mandatory local executive positions be taken by Basotho. It is shocking that even with so many accountants, Labour Commissioner still provides work permits to non-Basotho workers.

Lesotho needs to be ruthless in the way they promote domestic business and domestication of leadership in foreign organisations. The opposite will make Basotho slaves in their own land, especially now that land acquisition is so easy to foreigners, and most Central Business Districts of most urban areas are disproportionally owned by Asians,” Likhang said.

He said the country that is owned and operated by foreigners makes the natives of the land nothing but slaves. “The problem of a foreign owned economy is that it is not sustainable, as when foreigners see opportunities elsewhere they move, leaving a country an economic desert.

Growing an economy with direct foreign investment is past its sell-by-date, but growing through policies that encourage domestic investment will truly and sustainably grow the country.” He further noted that the move will scare away opportunist investors, who simply want to take the country’s resources and move away.

“As a country we are blessed with natural resources such as our water and diamonds as well as wool, mohair, rosehip, aloe, skilled labour, however, without using the resources and capabilities above to benefit this generation and future generations is only a curse to us,” he said.

He said the country should enter into reasonable agreements that promote generational wealth, taxes, royalties and equity stakes should have the future generations in mind. He further noted that the regulations will promote entrepreneurship, especially now that unemployment rate, especially amongst youth is terrible.

According to the UNDP assessment of the socio economic impact of COVID-19 on Lesotho released in June, the country’s unemployment rate stands at 32.8 percent and even high in youths aged 15 to 24 at 43.2 percent. “These regulations will further make the efforts done by such institutions as BEDCO, Private Sector Competitiveness and others be feasible and value creating,” Likhang continued noted.

The Minister of Trade and Industry, Thabiso Molapo, has in recent times been encouraging Basotho to step up and compete with foreign business community which currently dominates the country’s private sector. Molapo encourages Basotho to partner for consistency and supply big Lesotho and international markets with their products.

In achieving this, his ministry through LNDC has embarked on a road show to sensitize business communities around the country on financial services available for them at LNDC and Lesotho commercial banks and how they can access them to grow their business. The ministry further announced the operationalization of a Lesotho Standards Institution (LSI); the body is yet to operate.

The LSI Act was published in 2014, and is expected to mainly help Basotho manufacturers to market their products across Africa and compete with their international counterparts without worrying about the standard of their products. LSI is the national standard body which is mandated to develop and publish national standards, carry out testing activities, certification and inspection services, conduct training to capacitate the business industry and support public policy and regulation to protect the society.





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