Payment to wool and mohair farmers given green light
MASERU – Parliament on Tuesday adopted the consolidated report on the annual budget and estimates of revenue and expenditure for the financial year 2021/2022.
This following the presentation of the finance minister, Thabo Sofonea’s budget speech for 2021/2022 fiscal year on February 17 before parliament.
Chairperson of parliament’s Portfolio Committee on the Economic and Development Cluster, Tšepang Mosena, tabled the consolidated report during which she stated that government had allocated over M10 million to settle outstanding debts of farmers in the wool and mohair sector.
Payment, she said, should begin this week and in an exercise expected to last for two months. Mosena continued that the developments resulted from the committee’s shove on government to speed up the process of paying the farmers who have been owed since 2018.
She commended government for the gesture, though conceding that the committee took a longer than expected to deliberate on the thorny matter “that nearly led to this year’s financial estimates overlapping to early April.”
Asked to indicate progress made in the collection of data relating to owed farmers who will be paid by government the director marketing, small business ministry, Lekhooe Makhate, declined to comment. “The public is not as yet privy to that information,” he briefly said.
The cluster chairperson further elaborated that the current budget is aimed creating job opportunities for the youth through the Youth Fund which she said will ensure that the young people actually get jobs.This component of the budget has been allocated M300 000 for a nationwide job creation project, which will use a cashless payment method envisaged to reduce embezzlement of funds.
Opposition MPs, however, expressed concern over the delay in tabling the report for adoption, a hiccup some said had created panic as the deadline to have passed it was slowly approaching.
Government’s initiative to pay the farmers follows failure by brokerage company, Maseru Dawning, to pay farmers for their fabric dating back to 2018 due to squabbles between the company owned by Chinese national Stone Shi and Standard Lesotho Bank over bank statement reconciliation issues.
Shi claimed in the main that reconciliation for the Qacha’s Nek farmers was the biggest challenge he was faced with, explaining it as the most ‘complicated and messed up’ reconciliation he ever received from Standard Lesotho Bank.
He said he had been beseeching the bank to correct and make clear reconciliations – but his pleas were unheeded.
Shi last year even considered taking legal actions against Lesotho Standard Lesotho Bank for unwarranted service charges, and double payments he claimed the bank made to farmers. He alleged that these were among various reasons he had failed to pay the farmers his company owed.
In 2018, the government enacted Agricultural Wool and Mohair Regulations which restricted the selling of wool and mohair outside the country. Farmers were forced to take their fabric to Maseru Dawning as the only broker in the country.
After Shi failed to pay the farmers, his brokering license was suspended in October 2020 by the Ministry of Small Business Development, Cooperatives and Marketing, under provision that the suspension will be lifted once he has fully paid all farmers.
In December 2020, Shi’s advisor in the department of communication, Lawrence Keketso, told this publication that Shi has sourced some money and before Christmas farmers from 2018/2019 will be paid, while the rest will be fully paid by the end of January this year.
He, however, noted that they were still waiting for Standard Lesotho Bank to resolve the reconciliation issue.
Lawrence said Shi sourced money elsewhere to pay farmers for their 2018/2019 fabric that amounted to over M2 million.
Following the debacle, government committed to paying the farmers, with a promise to deal with Shi and Standard Lesotho Bank afterwards.