‘…elitist policies have no impact on the economy’
MASERU – Opposition Lesotho Economic Freedom Fighters (LEFF) has launched a scathing attack on the Minister of Finance and Development Planning, Dr Retšelisitsoe Matlanyane, stating that her speech during the mid-term budget review is devoid of any economic benefits for Basotho. In a statement issued this week, LEFF expressed disappointment with what they described as an “uninspiring neo-liberal mid-term budget speech” delivered by the Minister of Finance.
LEFF said the speech was full of the same policies that failed to answer the economic crisis this country has been faced with for decades. “There are no means of economic recovery… the minister seems to be clueless on what she is doing, while Lesotho faces severe economic crises. The recent National Food Security assessment reports show that 22 percent of Basotho living in rural areas are faced with severe food insecurity, while now, until 2024, almost 201 000 people living in urban areas will also require food assistance.
“There have never been meaningful efforts taken to ensure that we become an industrialised country that produces and exports through Basotho-owned companies. We await, with keen interest, a clear plan of action from the government on how this will be achieved.
“The Minister has done little to ensure that foreign companies (or subsidiaries) that have monopolies over strategic sectors of our economy play their part in corporate social responsibility (CSR). As things stand, we remain a country whose natural resources are plundered, the proceeds of which flow out of the country unhindered. “The revenue expected to be collected by Revenue Services Lesotho (RSL) through taxes is also compromised because production and performance are understated by these companies, some of which shamelessly operate without bank accounts to make tax evasion easy.
“LEFF is concerned with the hesitancy of the government to fight tax evasion, as this implies that the officials are complicit as well. Hence, they are not interested in harming their many dishonest means of income while the people they claim to represent literally starve to death.
“Agriculture production continues to face challenges because of the government’s failure to mitigate the effects of climate change. This season, there is insufficient yield expected. The government’s priority seems to be how ministers personally benefit, instead of the industry as a whole. This government’s promises to the farmers became empty when they failed dismally to deliver fertilisers. What more about the more complex issues the industry faces?
“With the status quo and no radical plan of action, there seems to be no end in sight for our economic problems,” reads the statement.
In an interview with Public Eye this week, LEFF Secretary General Mohau Mabetha said the government continues to put its trust in a private sector that does not exist or even have capacity.
He said it was unwise for the government to put economic recovery on individuals since this has never worked anywhere.
“We want a government that has the capacity to produce for its own people. The private sector we have is made up of individual entrepreneurs who politicians use to loot public funds. The policies that will boost our economy are not these ones of privatisation; they are policies that seek to uplift individuals, not the nation. There have been no efforts at decentralisation so far.
“People in rural areas are still left out in all the efforts made. The Ministry of Trade’s CAFI project will only benefit elites who are able to write proposals. What about those single mothers in rural areas who do not know how to write? This is leaving us with nothing but the very same iniquities that Lesotho is struggling with. These initiatives taken are selfish, aiming to enrich a few selected elites,” he said.
Mabetha added that the progress made speaks to individuals, not the nation, and as a result, Lesotho will remain where it is now.
He outlined suggestions of what needs to be done by the government, stating that priority would be fighting for food security and proper health care, which are basic human needs. He said there is a need for improvement in service delivery and tightening policies that will fight tax evasion.
“Showing the importance of execution of Regulation 2020 of Business Licencing, investing much in agricultural research as an effort to industrialise agriculture, capacitating fully government-owned banks and local banks so that public officers are paid through them, and decentralising the economy to reduce the migration of people from rural to urban areas
“Putting regulations in place that force multinational companies to seek services locally. For instance, SIM cards must be produced locally, while other multinational promotional materials should also be printed locally using local models.”
Opposition parties such as the Democratic Congress (DC) also expressed similar views. DC deputy leader, Motlalentoa Letsosa said so far they have seen nothing tangible from the economic policies put in place by the present government. He said the laws regarding economic activity have not changed, but when the ruling elite wanted power, they promised drastic change.
“How can any change happen without changing the laws and policies? Planting flowers on Kingsway and replacing streetlights were never part of the promises. Indeed, the government has no plan to take this nation to the Promised Land,” he said.
All Basotho Convention (ABC) Proportional Representation (PR) MP, Montoeli Masoetsa said the truth was that the country has no money.
The national budget in March showed that domestic and foreign public debt stands at M22 billion, while recurrent debt is at M18 billion. “The capital budget was estimated to be M6 billion, which includes the completion of two roads in progress, Mpiti Sehlabathebe and Marakabei Monontša, which means that there might be a problem starting new capital projects; therefore, for those projects that were included, the probability of kickstarting them is bleak. These are stalled projects, such as the Royal Palace and the cultural building next to Radio Lesotho.
“The Southern African Custom Union (SACU) revenue given to Lesotho in that previous budget of M10 billion did not help to address the revenue problem. The possibility of decentralisation is questionable. Indeed, the mid-term budget does not address the existing financial and economic problems and joblessness,” he said.
However, Central Bank of Lesotho (CBL) Principal Economist, Retšelisitsoe Mabote differed.
“I think LEFF is wrongfully attacking the Minister. Development plans are a national agenda that is formulated jointly with all stakeholders. All the minister does is allocate funds as requested by implementing agencies, or line ministries in this case. It must also be understood that this was a mid-term review, not the budget speech.
“The difference is that this time, the Minister presented budget performance against the targets set during her speech. It was to factor in developments that occurred during implementation, which might have necessitated adjustments or modifications to the original allocations. This means reprioritisation and, therefore, reallocation of resources. This was observed with the M40 million that was allocated for the printing of passports,” he said.
Mabote added that, in addition to the apparent adjustments, this is the time for planning for the following year, and priorities are extracted from the extended National Strategic Development Plan (NSDP II).
He further noted that it would have made sense if LEFF said the speech lacked clarity in the sense that there were no clear milestones for most proposals. He said this makes implementation a challenge and renders those priorities ‘workshop themes’. He said there are no complementarities in the programmes.
Matlanyane delivered the midterm budget speech to the Parliament for the 2023–2024 fiscal year on November 8 and stated that in preparing the budget, they had to strive to balance allocations for more effective service delivery and increased public investment spending that boosts the private sector to generate meaningful growth and employment opportunities for youth.
She said there is a need to rebuild the buffers to strengthen resilience, as there may be difficult times ahead, and restore macro-fiscal stability to stimulate economic growth.
She added that the overriding objective of the 2023–24 budget is to accelerate inclusive employment, generate economic growth and reduce poverty. She said they are fully aware of the resource constraints and the many needs; therefore, it is an absolute necessity to focus on key priorities and sequence the programmes carefully to derive maximum value and impactful outcomes.