‘Basotho businesses buckle as foreigners thrive’

. . . locals lament lack of will to implement affirmative action laws

MOSA MAOENG

MASERU – Micro, small, and medium enterprise owners have expressed concern over the increasing presence of foreign majority shareholders in Lesotho’s business sector, side-lining Basotho entrepreneurs. Their primary worry stems from the apparent lack of enforcement of existing laws designed to address this issue, such as the Business Licensing and Registration Act of 2019, which was enacted in 2020.

Despite the regulatory framework in place, government authorities have seemingly neglected to ensure its implementation. Lesotho’s economy lags behind many African nations, particularly within the Southern African Customs Union (SACU). These concerns were highlighted by Lebohang Thotanyana at the Basotho Business Empowerment Forum hosted by the Micro, Small, and Medium Enterprise Association this past Wednesday.

Thotanyana further emphasised the disproportionate involvement of foreign entities in critical infrastructure projects such as the M800 million worth Queen II Hospital, financed by the Republic of China, the M1.4 billion Mpiti to Sehlabathebe road project, and the Lesotho Highland Development Authority’s (LHDA) Phase 2 initiative, valued at M23 billion.

“This is one of the primary reasons why large infrastructure projects fail across Africa. Instead of revenue flowing back into the government’s coffers, it exits the country. Many projects funded from the East struggle to sustain themselves in Africa due to this issue.

“There is a crucial need for Basotho businesses to supply the country, thereby bolstering the national economy. Without money circulating within the domestic economy, Lesotho will continue to lag behind in development. Botswana and Rwanda have thrived by empowering local businesses as middlemen, a model Lesotho could emulate. By supporting Basotho enterprises, the government could significantly contribute to economic growth and revenue retention.”

Thotanyana further emphasised the necessity for increased involvement of Basotho businesses in government decision-making processes. He said true citizen empowerment can only occur when Basotho hold more sway in the country than foreign shareholders. Thotanyana suggested that if Lesotho’s annual budget is M23 billion, at least M15 billion could be allocated to Basotho businesses and the remainder to foreigners.

Conversely, ’Malitlou Morojele, a businessperson and member of the Lesotho Chamber of Commerce and Industry (LCCI), urged the Lesotho government to demonstrate political will by supporting Basotho businesses. She highlighted the historical disempowerment of the local business community and called on Members of Parliament (MPs) to re-evaluate how Basotho can take leadership roles in businesses to avoid exploitation by foreigners. Morojele cited instances of mistreatment, such as the ill-treatment of Polihali workers by foreign subcontractors.

“If this forum fails to address Basotho’s struggles in business, the country will stagnate,” she warned. Teboho Matšephe, Secretary General of the Meat Traders Association of Lesotho, outlined challenges faced by meat traders, including a lack of abattoirs, intense competition with foreigners for supplying hotels, and rampant livestock theft driven by economic desperation among some members of the community.

He said the primary obstacle lies within the National Assembly itself, where members fail to address the challenges faced by the populace. “The public sector and foreign entities stand in opposition to the private sector in our country, hindering our potential for success. Botswana successfully integrated the private and public sectors, resisting foreign dominance in their business landscape,” Matšephe said.

“We come here with deep disappointment, despair, and astonishment. Despite the enactment of the 2019 Act, which was supposed to be regulated in 2020, it remains unimplemented. This lack of action leaves us feeling disrespected by the foreigners. Despite producing the same concrete bricks as a foreign nation, we receive less attention. When we sought government intervention, we were met with claims that Basotho lack quality,” said Thabang Mokoqo, Public Relations Officer of the Concrete and Aggregates Association of Lesotho (Sand and Quarry Sector).

Representing the vendor sector, Maremi Mabathoana highlighted the struggles faced by small businesses post-COVID-19 in 2021. She said they approached the government, led by the then Minister of Small Business, Machesetsa Mofomobe, seeking assistance against increasing competition from Chinese businesses. She emphasised the vital role of small businesses in a nation’s survival.

“Basotho businesses are collapsing under the weight of foreign dominance. It is time to put an end to this. We have laws in place that could protect us, yet they remain unenforced,” Mabathoana also said. The Principal Secretary of the Ministry of Trade, Industry, and Small Business, Thabo Moleko acknowledged the concerns raised by business owners regarding the law.

He mentioned engaging with various business associations to address their grievances and seeking validation and assistance from Botswana to regulate the law effectively. Orifitlhetse Masire of Business Botswana elaborated on Botswana’s approach to citizen economic empowerment, citing Debswana’s Citizen Economic Empowerment Programme (CEEP).

The initiative aims to enhance citizen participation in the company’s supply chain through preferential treatment and partnerships with financial institutions to provide credit to local suppliers. They aspire to allocate P20 billion to citizens and local companies, creating 20,000 jobs by the end of 2024.