Trade ministry faces flurry of questions

TEBOHO KHATEBE MOLEFI and

MOTSAMAI MOKOTJO 

MASERU – Parliamentary committees are laying up the groundwork to investigate the Ministry of Trade over M200 million meant for the Lesotho Standards Institution (LSI) – in what some perceive as deceptive practices.

Some legislators understand soliciting the use of public funds for construction of an LSI building costing over M200 million a ruse since the Ministry of Finance has already requested the African Development Bank (AfDB) to finance the project, according to these Members of Parliament (MPs). This is according to MP Machesetsa Mofomobe during an interview with Public Eye this week.

Background of the LSI building project

Speaking to Public Eye this week, Basotho National Party leader, Machesetsa Mofomobe, was adamant that it makes no sense at all that funds were requested from the AfDB, yet in the current budget proposals finance minister, Dr Retšelisitsoe Matlanyane, is asking parliament to allocate funding for the same project.

“I will file a motion in the National Assembly to have this probed, and ultimately recommendations will be made if it’s adopted,” Mofomobe said of the LSI edifice located at Ha Tikoe in the outskirts of the capital, Maseru.

The chairperson of the august House’s committees’ chairpersons, Mokhothu Makhalanyane, echoed similar sentiments in a separate interview with this publication.

Makhalanyane said that parliament will definitely investigate the ensuing drama surrounding the Ministry of Trade and its conduct with regard to the LSI in general and the construction of the building in question.

“A lot is unclear and definitely suspicious about this deal since we were originally told that AfDB was financing the LSI building construction,” Makhalanyane said.

We will deal with this issue since we need to have transparency in government dealings, an irate Makhlanyane said, indicating that he is soon hauling the ministry to account and give clarity.

National Assembly Economic and Development Cluster chairperson, Sello Hakane, has already pointed out speaking to this paper last week that these developments are astounding since parliament has been informed that the AfDB, and not government, would fund the LSI project.

“I can confirm that this week it came to our attention that funding was initially supposed to be provided by the AfDB not government,” Hakane, said at the time, adding, “We need to conduct a site-visit.”

Hakane was astonished that the contract for construction works has already been awarded without a feasibility study and an Environmental Impact Assessment, thus “we need to investigate once we are done working on the budget.” 

Government requested the AFDB in January 2024 for support in the amount of USD $14.5 towards the LSI project under its ADF 16 programming, a project that falls within its prioritized areas to build enabling business infrastructure and improve the investment climate for products to meet international standards.

The project and financial backing request was approved by the AfDB as aligned to its initiatives in supporting competitive infrastructure, removing barriers to trade and promoting trade.

“The project identification mission was successfully conducted on 8-12 April, 2024, and the project concept note was finalized by the bank. A copy of the detailed aide-mémoire was submitted to the government. After thorough environmental screening,” reads a report on the terms of reference of the AfDB project preparation mission in the country.

The bank categorized the project under Category I in its internal Memo dated July 31, 2024, and deadlines were set after consultations with government to conduct the Environmental and Social Impact Assessment (ESIA) study and associated ESIA implementation documents by October of the same year.

The ESIA is justifiable under the Lesotho Environmental Act of 2008 and the AfDB’s environmental and social assessment procedures as set out in the Integrated Social Safeguards System.

Meanwhile, asked to give clarity to seemingly dubious transaction, the Director of Standards at the trade ministry, Molebatsi Rabolinyane, told this publication that they sought the AfDB money “in case government funding is not enough.”

“We requested for funding a long time ago…over M200 million; they (AfDB) know we asked them for help while the (construction) process was underway.

This is 100 percent funded by the government, but we are aware that we are running out of funds. we told them that we will not stop with the project,” Rabolinyane said when quizzed why they requested for funds AfDB while government would cover the cost of the construction of the LSI building.

He confirmed that they are yet to include the social impact aspect of the project, which was not included in the initial EIA for the construction of the building, which has been awarded to a foreign joint venture company.

In her 2025/2026 budget speech, the finance minister, Dr Matlanyane, mentioned that in a bid “to improve market access, the Lesotho Standards Institution (LSI) will be operationalized to handle standards development, testing, and certification.

She said the construction of LSI facilities will begin in the upcoming financial year.

Serious questions over the LSI project arise while recently the Procurement Director in the Ministry of Trade, Seriti Khabisi, was suspended for raising the flag over unclear transaction surrounding the LSI project, insisting that her office was not consulted.

Khabisi confirmed to this paper in an interview that indeed she was on suspension but revealed that she has since sought legal recourse.

The Principal Secretary in the ministry, Palesa Matobako, has, however, previously argued to this paper that the construction deal was above board.

“The tender was even investigated by DCEO (Directorate on Corruption and Economic Offenses), which indicated that there was no foul play in the awarding of the tender,” Matobako said.

Matobako confirmed that Khabisi asked the anti-corruption agency to investigate the tender, which “was cleared as legal procedures were followed…she (Khabisi) has an axe to grind.”

“She has been suspended for buying phones and placing adverts in newspapers without following proper procedures, not for what is being peddled,” he said.

However, sources privy to this matter told this paper that one ministry staffer (name withheld) had forged ahead with project despite reservations about the deal, and that Matobako simply ignored the red flags notwithstanding issues raised.

The LSI is already in wrestling with the acquisition of some of its property locked at the Lesotho Promotion and Marketing Services (LPMS) building located in the Maseru Industrial Area.

The Ministry of Trade has, on several occasion been denied access to this equipment by the infamous Yan “John” Xie on account of the government owing him, a matter Matobako has confirmed before the economic cluster of the National Assembly. 

“John said he was not going to grant us permission to the building because the government owes him, although he did not disclose the amount,” she told the portfolio committee.