Shelile’s silence speaks volumes
As state furniture factory rots
TEBOHO KHATEBE MOLEFI and
MOTSAMAI MOKOTJO
MASERU – Trade and industry minister, Mokhethi Shelile, won’t answer questions while a parastatal he is responsible for drifts in financial chaos – exposing why a nation that cannot manage a workshop cannot compete in global markets.
In the Basotho Enterprises Development Corporation (BEDCO) premises at Sebaboleng, behind a gate that sees fewer delivery trucks with each passing season, stands a building that has become an unintended monument to institutional failure.
The Furniture, operated under BEDCO, was supposed to demonstrate that Lesotho could manufacture its way to prosperity. Instead, it has become a case study in why a country that cannot manage a modest furniture workshop has no credible claim to competing in the continental or global economy.
At the centre of this failure stands Minister Shelile, who holds the trade and industry portfolio – and who has repeatedly refused to answer detailed questions from this newspaper about rental arrangements, tax offsets, financial management and the operational collapse of an entity that falls directly under his statutory responsibility.
His silence is not merely discourteous.
It is a governing philosophy. And it reveals something deeply troubling about Lesotho’s capacity to participate in the African Continental Free Trade Area (AfCFTA), attract investment, or honour its own public finance management laws.
The minister who won’t speak
Over several days Public Eye submitted questions to the ministry, meant for Minister Shelile, asking for clarification on the basis on which rental obligations for The Furniture are determined, who the effective landlord is, whether actual cash transfers occur or rental is treated as a book entry, and how tax offset arrangements are structured and independently verified.
We asked about financial oversight, board resolutions and the ministry’s role in arresting the factory’s decline.
The minister did not respond. His office did not respond. His spokesperson did not respond. This is not an isolated lapse. It is a pattern.
Shelile has, on repeated occasions, declined to answer questions about an entity whose losses have mounted, whose machinery lies broken and whose purpose has been abandoned.
This is not how a functional ministry behaves. It is certainly not how a ministry entrusted with the country’s trade competitiveness behaves – especially at a moment when the AfCFTA promises to reshape continental commerce and when regional competitors are moving decisively to capture new markets.
What the board’s records reveal
The Furniture’s board meetings tell a story of chronic dysfunction that no amount of ministerial silence can obscure. Minutes obtained by this newspaper document a litany of failures that would trigger immediate remedial action in any well-regulated jurisdiction.
At the meeting of November 7, 2023, the board was told that “adequate inventories maintained, but machinery limitations remain.” Marketing strategy development was “slow due to financial constraints.” The company reported that it had ten permanent BEDCO staff and one temporary employee – but a “concern was raised that there have been repeated reports about BEDCO’s unfavourable culture.”
The board acknowledged that “challenges remain as the old culture persists.”
By March 2024, the situation had deteriorated further. The board reviewed the 2023/24 third quarter management accounts and found a deficit of M92 007, attributed to “underperformance in raw material sales and a decline in machine rental income.”
The profit and loss statement showed a 4.5 percent decline in sales and a worsening net loss compared to the previous quarter. The board noted that competitors charged lower prices, though it claimed the situation had “normalised with regained clients” – a formulation that suggests market share had been lost and only partially recovered.
Most damningly, the board’s own discussion of the 2024/2025 annual budget revealed that “the company does not have credit accounts with Republic of South Africa (RSA) suppliers because of financial capabilities.” A state-backed manufacturing enterprise cannot secure supplier credit from South African vendors – a staggering admission of financial weakness.
The same discussion confirmed that input tax is “currently benefiting BEDCO instead of The Furniture,” with only a vague “set off” arrangement proposed.
A case study in financial opacity
The rental question is not a technical footnote. It is a window into how state resources are mismanaged when oversight collapses. Sources within the entity have told Public Eye that rental payments – or at least the nominal acknowledgment of rental obligations – have been treated as deductible expenses that reduce
The Furniture’s apparent tax liability. But because the factory occupies space effectively owned or controlled by the state, it is unclear whether actual cash changes hands or whether rental is treated as a paper entry that never leaves the government’s collective ledger.
The board minutes of March 25, 2024 capture this confusion perfectly. An inquiry was raised “about rental budgeting regarding the rental costs that are budgeted but offset against BEDCO’s tax obligations. This approach may cause confusion.”
The response was remarkable: “It was discussed that the company does not have credit accounts with RSA suppliers because of the financial capabilities therefore input tax is currently benefiting BEDCO instead of The Furniture. However, there will be a set off done between BEDCO and The Furniture.”
Read that again. The board was told that confusion “may” arise from the rental offset arrangement. But the arrangement is already operating. Tax benefits are flowing to BEDCO rather than to the manufacturing entity the corporation is supposed to support.
The promised “set off” is described in the future tense, as if it has not yet been formalised – while the underlying financial activity continues without clear legal or accounting foundation.
No minister willing to answer questions would allow this opacity to persist. No ministry complying with the country’s Public Finance Management Act would permit such arrangements to go unexplained and unverified by independent audit.
Lesotho’s economic performance
To understand why The Furniture matters beyond its four walls, one must situate it within Lesotho’s broader economic trajectory – and compare that trajectory to regional peers in the Southern African Development Community (SADC).
Lesotho’s economic performance has been persistently anaemic. Real GDP growth has averaged below 2.5 percent for much of the past decade, insufficient to absorb the approximately 30 000 young people entering the labour force each year. The economy remains dangerously undiversified, with textiles and remittances from South Africa accounting for the bulk of foreign exchange earnings.
Manufacturing value-added as a share of GDP has stagnated. Private sector credit remains shallow. The business environment is burdened by regulatory unpredictability, weak infrastructure, and – as The Furniture demonstrates – state-owned enterprises that drain rather than develop.
Contrast this with regional competitors. Botswana has leveraged diamond revenues into sustained investment in human capital and infrastructure, achieving per capita incomes more than five times Lesotho’s. Zambia and Tanzania have pursued aggressive industrial policies targeting agro-processing and light manufacturing, with special economic zones that attract genuine foreign direct investment rather than paper commitments.
Rwanda, though not in SADC, has become the continent’s benchmark for institutional reform, moving from 150th to 38th in the World Bank’s Ease of Doing Business rankings over two decades – while Lesotho has barely moved.
Even eSwatini, Lesotho’s small-neighbour comparator, has maintained more coherent state-owned enterprise oversight and more consistent ministerial engagement with parliamentary accountability mechanisms. The contrast is not merely statistical. It is institutional. And it is personal.
What the PFMA requires
The country’s Public Finance Management Act (PFMA) is not an aspirational document. It imposes binding obligations on accounting officers, including permanent secretaries and, by extension, the ministers to whom they report. Section 40 requires that “the accounting officer for a government ministry shall ensure that all revenue due to the government is collected and properly accounted for.”
Section 42 mandates that “no expenditure may be incurred unless it is in accordance with an appropriation by parliament.”
When rental arrangements between state entities generate paper entries that affect tax liability without corresponding real transactions, the PFMA is not being honoured. When a minister cannot – or will not – explain how such arrangements operate, the statutory duty to account to parliament and to the public is being violated.
The PFMA also requires that “the accounting officer shall maintain an effective system of internal control.” The Furniture’s own board minutes document that machinery limitations persist, that marketing strategies remain unimplemented, that supplier credit is unavailable, and that financial confusion surrounds basic budgetary items.
These are not signs of an effective internal control system. They are signs of systemic breakdown.
The AfCFTA elephant in the room
The AfCFTA, which commenced trading under its preferential regime in 2021, represents both the greatest opportunity and the most severe stress test Lesotho has faced since independence. Tariff liberalisation will expose domestic producers to competition from more efficient firms across the continent.
Rules of origin and technical barriers to trade will require regulatory capacity that the Ministry of Trade has not demonstrated it possesses.
How can Lesotho credibly negotiate complex tariff schedules when its own minister refuses to answer questions about a furniture factory? How can the country enforce product standards for exported goods when state-owned manufacturers cannot maintain basic machinery? How can Basotho entrepreneurs be expected to meet continental competition when the government cannot manage a workshop?
The answer is that they cannot. Trade competitiveness is not a matter of signing protocols or attending summits. It is a matter of daily institutional competence – of ensuring that public entities comply with financial laws, that boards exercise genuine oversight, that ministers answer legitimate questions, and that the gap between policy aspiration and operational reality is closed rather than celebrated.
The auditor general’s missing voice
The rental and tax offset confusion at The Furniture also raises urgent questions for the Auditor General’s office. If rental arrangements between state entities are generating paper entries that affect apparent tax liability without corresponding real transactions, this is precisely the kind of arrangement that independent auditors are supposed to flag and report on.
Has the Auditor General examined these arrangements? If so, what findings were made? Were those findings communicated to the ministry and to parliament? The public currently has no way of knowing – because the minister will not speak, and the ministry does not publish the kind of detailed financial reporting that would allow independent observers to draw their own conclusions.
The PFMA requires that “the Auditor General shall audit the accounts of every government ministry and every public entity.” That audit is meaningless if its findings are not acted upon – and if ministers who preside over the conditions those findings document face no consequence for their silence.
What the board’s own resolutions tell us
The board minutes reveal that directors themselves recognise the depth of the crisis – yet their resolutions have produced no observable improvement. In November 2023, the board requested “a detailed transitional plan with key milestones, including costed recapitalisation and a developed financing strategy,” to be submitted “by next week.”
Whether that plan was ever submitted, and whether it was ever implemented, is not documented in the minutes available to this newspaper.
In March 2024, the board approved the engagement of an interim CEO and directed that the recruitment process be expedited. But the same minutes record that “financial viability for the CEO’s salary was discussed; partial financing from BEDCO may be needed initially.” A state-owned enterprise cannot afford to pay its own chief executive without subsidy from its parent corporation – yet the board approved the position anyway.
The board also directed “a cost-benefit analysis to determine whether to buy or lease machinery” and “a capacity-building plan for employees, focusing on distribution and machinery maintenance.” These are elementary management tasks. That they required board-level direction, and that they had not already been undertaken by management, is itself an indictment.
The human cost
Behind the boardroom discussions and the ministerial silences are real workers. Employees of The Furniture spoke to Public Eye on condition of anonymity for fear of losing their jobs.
They described a working environment characterised by uncertainty, poor communication from management, and no clarity about the factory’s strategic direction or financial health.
Several described instances where operational decisions appeared to be made in Maseru – at BEDCO leadership or ministry level – without any meaningful consultation with factory management on the ground. Workers reported not knowing whether the factory would remain open, whether machinery would be repaired, or whether their jobs would exist in six months.
This is not merely a governance failure. It is a human failure. And it is the direct consequence of a ministerial posture that treats accountability as optional and transparency as a threat.
What must happen now
First, Minister Shelile must answer the questions this newspaper has submitted. The public is entitled to know how rental arrangements are structured, whether tax offsets are lawful, and what steps the ministry has taken to arrest
The Furniture’s decline. Silence is not a neutral act. It is a statement of contempt.
Second, the Portfolio Committee on Trade and Industry in parliament must summon the minister to provide a full accounting. The committee has the constitutional authority to demand documents, compel testimony, and refer findings for further action. It should exercise that authority without delay.
Third, the Auditor General must conduct – or if already conducted, publish – a forensic audit of The Furniture’s financial arrangements, including rental offsets, tax treatments, and the relationship between BEDCO and the factory. The findings must be made public.
Fourth, BEDCO’s board must be reconstituted with members who possess genuine financial and industrial expertise, and who understand that their fiduciary duty runs to the public, not to the minister who appointed them.
Finally, the government must decide whether The Furniture has a viable future. If it does, it must be recapitalised, professionally managed, and subjected to the same performance standards as any private competitor. If it does not, it must be closed – and the lessons of its failure must inform every subsequent state-owned enterprise decision.
Small failure, large lessons
The Furniture is a modest enterprise. Its annual budget is measured in millions of Maloti, not billions. Its workforce numbers in the dozens, not thousands. But the failure it represents is not modest. It is a failure of governance, of accountability, of financial discipline and of ministerial responsibility.
Lesotho cannot credibly pursue continental trade integration while its trade minister refuses to answer questions about a factory under his watch. It cannot attract investment while state-owned enterprises operate in financial opacity.
It cannot build a diversified economy while the institutions entrusted with industrial development drift into dysfunction.
Minister Shelile’s silence speaks volumes. It says that accountability does not matter. It says that parliamentary oversight can be ignored. It says that public finance management laws are optional.
And it says that taxpayers – whose money funds BEDCO, whose money capitalised The Furniture, and whose money is at risk in every confused rental arrangement and every unaudited tax offset – are not owed an explanation.
That is not merely unacceptable. It is, in a democracy, unsustainable.
Ministry of Trade Principal Secretary, Palesa Matobako, told this publication that while they are aware of the financial problems bedevilling The Furniture, “we are taking concrete steps to rectify them,” adding that a turnaround strategy is already under internal review.
“I cannot disclose the full details prematurely, as doing so could undermine ongoing remedial processes,” Matobako said.
