Political parties’ court informal sector



  • Leaders make assurances ahead of elections
  • Promise voters support for informal sector



MASERU – The 2022 national general elections campaign trail spotlights political parties’ objectives on economic growth, business competitiveness, employment generation and wealth distribution as key components to Lesotho’s economic growth. And, as a result, the country’s Micro, Small and Medium-sized Enterprise (MSMEs) economy has, of late, been actively promoted as a fertile platform for political campaigns. However, there is still little clarity about the extent to which political parties vying for power plan to use MSMEs to contribute to poverty alleviation, economic growth, or international competitiveness.

MSMEs encompass a very broad range of businesses; from established businesses employing over 100 people (medium-sized enterprises), down to the survivalist self-employed from the poorest layers of the population running informal microenterprises. Speaking on the importance of investing in MSMEs, Chartered Accountant and Chartered Governance professional, Robert Likhang, notes that the sector is important in contributing to the country’s economy, adding that their engagement in economic activities reduces unemployment.

Likhang said the sector increases economic flow through money circulation which, in turn, contributes to the growth of the general economy. He added that the sector is important and has been certified to be the key promoter of the economy in every country. “If you look at every country, their economies have been enhanced by the MSMEs sector. In Lesotho, we currently have 700 000 people that are economically active. “What makes them economically active is that, among these people are street vendors, people employed by street vendors and small businesses that are selling to street vendors,” Likhang said.

In an interview with Public Eye a small business trader in Quthing, ’Maphoka Metjea, emphasized the need for capacitation as the first step to enhance this sector. She said as small businesses they not only struggle to manage their businesses to ensure growth and consistency but they also do not keep their financial books as they have no idea where to start.

Metjea said because of these challenges, small business owners even fail to qualify for bank and government’s financial assistance since proper bookkeeping is one of the prerequisites for financial assistance or a loan from a bank. “Because of our daily struggle to make end meets, we also do not pay tax…and, as a result, limit our chances of getting the financial assistance we need to grow in business,” she stated.

Only a fortnight ago on the launch of the party manifesto going into the 2022 elections the Basotho National Party (BNP) undertook to address the challenges faced by MSMEs, which range from lack of finance, market inaccessibility, capacitation and unfair competition from foreign-owned businesses.

The party believes that MSMEs are the main drivers of the country’s economy and, as a result, promise to ensure that the Basotho Enterprise Development Corporation (BEDCO) is empowered to fully and effectively capacitate and develop small businesses.

BNP leader, Machesetsa Mofomobe, said if elected into power, the party will review financial assistance opportunities available in the country meant to empower small businesses to ensure that they are accessible to all Basotho who qualify.

Mofomobe said, among others, the BNP will review the current Lesotho National Development Corporation-disbursed Partial Credit Guarantee Scheme. He further noted that the BNP government will assist Basotho MSMEs and producers by creating local markets and soliciting international markets for their products.

Mofomobe said they will also go towards empowering cooperatives, articulating that they are a unity component geared at fostering combined efforts for the purpose of developing communities. He said they have identified the co-operative sector as a key strategic economic driver for Lesotho.

“The BNP government shall review all laws, policies and regulations that have led to the present demise whereby cooperative enterprises are not protected and shall resuscitate the cooperatives college, whose original mandate was to be a training centre that government used to capacitate the members thereof.

“The BNP government shall resuscitate cooperatives throughout the country and ensure the establishment of a Cooperative Development Fund for their sustainability while the responsible ministry will be charged with soliciting and co-ordinating markets for the products manufactured by the members of the cooperatives,” he said.

Mofomobe said they will also ensure that businesses, in particular foreign-owned businesses, use paperless payment mechanisms so that it will be easier to compel them to pay their fair share of taxes.

Also on the cards for BNP if it becomes government is a plan for investing in small-scale manufacturing. The BNP leader said the party believes small scale manufacturing, be it agro-industries, textile and other factories should be decentralised down to the constituency level and must be dedicated to Basotho. He said they will support these businesses by providing them with skilled supervisors and financial support where necessary.

Movement for Economic Change (MEC) has, in its elections campaign message, promised to support private sector investment through the promotion of small business development while also supporting entrepreneurship, innovation and development of a digital and cardless economy.

The MEC has also undertaken to establish an MSMEs Pension Fund, which will fall under its Social Responsibility Programme. The Fund will work together with respective street vendors’ associations across the country to ensure registration of all vendors and that they get their money when its due. For its part, the Basotho Action Party promises to convert the Lesotho PostBank into a Development Bank to enable street vendors to access financial support to grow their businesses.

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