Domestic investment policies key to growth: Kobeli

KABELO MASOABI

LERIBE – A more productive and competitive local manufacturing sector is critical for reducing long-term unemployment estimated at forty percent in Lesotho, local manufacturer Teboho Kobeli has said.  Kobeli said in an interview this week that this will go a long way to strengthen Lesotho’s presence in the global economy, and ensuring the Kingdom emerges from the pandemic economically stronger than it entered.
To support investment promotion, improving the ‘Made in Lesotho’ strategy could help Lesotho attract buyers in new markets and strengthen the Brand Lesotho’s presence in international manufacturing expos and exhibitions.

The strategy could also include investment incentives to encourage investors into the domestic market or promote expansion of existing businesses owned by Basotho. The leading entrepreneur identified these points as a significant opportunity to stimulate recovery and strengthen the sector’s competitiveness. Kobeli is the founder and Managing Director of the Basotho-owned Afri-Expo Factory created in 2010 which began operations in 2016.

“Lesotho already has factories that it needs to take over from foreign investors and implement domestic investment laws and policies to create a more competitive investment climate, expand the export manufacturing sector and facilitate large-scale job creation in the manufacturing sector.
He said our Foreign Direct Investment policy is in favour of foreign investors, which is a setback for Lesotho.
“In addition, the government should help in coordinating establishments such as the Lesotho National Development Corporation, the Basotho Enterprise Development Corporation and the small, medium and micro-enterprises to stimulate the private sector to drive inclusive economic growth,” Kobeli said.

“Following the intensive researches we have conducted, were are convinced that the manufacturing industry can bring reasonable profits to Lesotho in contrast to the prevailing situation where foreign investors take money out of the country and are also fond of disappearing when disasters such as the Coronavirus pandemic strike.

“We have to localise the industry as Basotho by establishing factories across the country and conquer the market locally and abroad, including seriously considering the African continental trade opportunities.

“We need to have our own chain stores that we would supply with stock in Lesotho and in other countries like Swaziland and Botswana. 

“That means we shall be able to supply throughout the year unlike now whereby our production may be limited to the number of orders we get from abroad. We have also developed a model to facilitate Basotho in this business. Let’s open the closed factories and return our unemployed people to work,” he said.

The COVID-19 (coronavirus) pandemic has adversely affected nearly every part of the economy, including textile and apparel sector. Lesotho, according to reports, is facing a tough fiscal outlook as the Southern African Customs Union (SACU) transfers, private investments and exports are declining.

Real gross domestic product growth is estimated to have contracted by 15.7% in the second quarter of 2020 largely due to the negative shock of the pandemic, and the government estimates that at least 4,000 jobs could be lost in the textile industry.

Although the government has successfully introduced wage subsidies for factory workers through the Disaster Relief Fund and rental holidays for factories in the manufacturing sector, these are said to be temporary measures.