Basotho should partner to enhance food processing

NTSAU LEKHETHO

Globally, there is a great diversity of agro-processing which accounts for over 60 percent of jobs. While the figure may not necessarily apply in the case of Lesotho, several Basotho have started agro-businesses at a small scale, often working from home and selling to neighbours and friends via a roadside stall or in a local marketplace.

At a small-scale production in Khubetsoana, for an example, baking flat bread (liphaphatha) is typically labour-intensive as the owner does not have sufficient money to invest in specialized processing equipment.

Although the quality of the sephaphatha may be good, it may not cater for wholesalers or retailers who require guaranteed deliveries of consistent quality.

The owner has a sizeable number of individual and bulk customers but she plans to downsize as future prospects are bleak.

The owner insists she needs a partner to inject capital and help aggressively with marketing.

Yet, local small-scale processors also may not have contracts with raw material or packaging suppliers and have to buy materials in bits and pieces from local suppliers, who also have to import from South African markets.

There are many of these businesses in Lesotho.

With advice and assistance, some of them can develop into larger scale enterprises.

Otherwise, when small-scale processors try to scale up operations a series of issues may be encountered.

Products may be in direct competition with those of other processors and when displayed on retail shelves, the quality of the packaging becomes much more important.

This is where graphic designers come in and there is plenty of them with schools like Limkokwing University of Creative Technology supplying cohorts each year.

Another issue is pricing, where large retailers may negotiate lower prices that ultimately run small scale processing start-ups out of business.

Making direct sales to consumers may be slow and costly as it needs trained salespeople to push the products.

Any scaling up of operations brings new challenges – typically these businesses employ more people and the owner must have staff management skills; more careful control is needed over business finance, especially production and distribution costs; business management and financial planning skills are required to stay ahead of competitors; investment decisions are needed for both new equipment and improved packaging.

The larger production volumes require production-planning skills and may create a need for environmental protection through waste management. Other issues, such as market research, product development and the business image may also increase in importance.

Issues of micro-and small-scale entrepreneurs who wish to improve their business operations must be addressed. This may not require the sophisticated business management techniques that are used by large-scale manufacturers, but simple procedures to plan, monitor and control production, finances, inventories, quality, and staff matters.

Some types of agro-processing have specific problems or issues that need to be addressed with the aim to provide practical advice and information on management aspects to help entrepreneurs or potential investors at micro and small scales to run a sustainable agro-processing business.

It may be a useful addition to training resources for local small-scale processors and staff at government institutions who work with small enterprises. So are policy makers or students on business, agriculture and food-related projects.

Lesotho is progressing, yet not so fast, in various spheres due to the rapid urbanization, increased literacy and rising per capita income. This has resulted in rapid growth and changes in demand patterns leading to tremendous new opportunities.

An average Mosotho spends about 50 percent of household expenditure on food items.

In addition, Lesotho is a small landlocked country and imports most of its food from the big neighbour South Africa.

The country has a limited raw material base but vast domestic, regional and international markets coupled with a number of incentives.

Furthermore, growth of processed food industry in Lesotho is hampered by numerous factors such as non-availability of suitable quality raw material, low capacity utilization, obsolete technologies, lack of basic infrastructure for proper storage, preservation and distribution facilities resulting in the wastage of the commodity.

There is hope for Basotho and the local food processing markets.

In 2021, the government received financing from the African Development Fund to establish special economic zones (SEZs).

The aim is to develop a long-term policy commitment to attract high quality foreign investment set out in the SEZ Act and supported through consistent and current government policies.

This move by government should initiate measures to open the doors of the food processing industry to international players to improve the infrastructure, appropriate packaging material, adequate cold storage spaces and transportation facilities.

It is imperative for the country’s pride and also for the economic growth to sustain and enhance its share in global food processing industry.