OP-EDs

OP-ED: LESOTHO’S ECONOMIC FUTURE IS BRIGHT

By Dr Moeketsi Majoro

This last week journalists from Lesotho Times and Public Eye asked me to respond to utterings by Professor Nqosa Mahao made apparently at a rally in Likhoele. This is how I responded to the journalists.

First of all, I am a member of the new All Basotho Convention (ABC) National Executive Committee (NEC) and at no sitting has any member of the NEC leveled any allegations against me.

This is not to rule out the possibility that former NEC members or opposition members may be the one’s leveling these accusations.

On the struggling economy I have been clear on the sources of the economic downturn and actions needed for reversal. I have also pointed out that there will never be a simple solution because the source of the economic difficulties is due to a regional downturn emanating mainly from the slowdown in South Africa and that a solution depends significantly on how quickly the economy of South Africa recovers.

Also the US economy, including US garment imports, must remain strong.

A contagious regional slowdown that is also accompanied by deterioration in government financial balances is particularly difficult to combat as governments lack the resources necessary to provide stimulus to the economy. This was the case for many countries during the 2008 global financial recession and it remains so for our partners in Southern African Customs Union (SACU). You should be able to confirm that other SACU member states are undergoing the same financial and economic difficulties.

I have not wrung my hands and stood aside. I have offered solutions. The best solution is normally government and the private sector working in tandem to raise their respective capital injections. In the absence of generous government investment and need for government to be selective, the private sector has to take up the burden, and this is what we have been promoting.

On selective public investments, I have raised more than M3.5 billion in funding for the water sector and preparations for the start of the projects in 2019 are advanced. This financing will bring needed water to communities in Hlotse, Tsikoane, Maputsoe, Mafeteng and Mohale’s Hoek. I have also signed a financing agreement with Saudi Fund for the distribution of water to all communities through the Metolong Dam pipe line passes.

Last week I hosted four Arab funds, namely BADEA, Kuwaiti Fund, Saudi Fund, and OPEC Fund for International Development to put together financing for the Botha-Bothe water development project to service communities from as far ‘Muela down to the city of Botha Bothe as well as the Belo Industrial Park. In the coming months, the Ministry of Finance will raise additional funding to support both the Belo and Tikoe Industrial Estates.

Turning to energy, in the coming weeks to months, I will raise M1 billion maloti with China EXIMBANK to finance the Ha Ramarothole solar power station. Negotiations for this project are near complete and construction work will start before the end of the year. In addition, and in a first for Lesotho, the Ministry of Energy has granted a concession to a US company 1Power to develop an additional 20MW solar power capacity at the same area in Mafeteng.

I am to sign a support agreement with 1Power and the company has indicated it wishes to commence construction before the end of the year. I have agreed with the Minister of Energy to hold a donor conference in 2020 to secure the financing needed to connect all households in Lesotho to electricity within a period of 5 years rather than the 20 years foreseen in the electricity master plan.

I have also proposed to the Ministry to promote more independent power producers in order to accelerate both power generation and distribution. Thus, Lesotho’s wind and solar potential should, with the help of modern technology and the private sector, become the major source of electricity to many households in Lesotho.

The Kingdom of Morocco has the largest solar farm in the world and a few days ago, I visited this farm to learn insights on how such massive projects are being financed sustainability.

Turning to private investment, I have undertaken comprehensive discussions with the Lesotho National Development Corporation (LNDC) on how it can leverage its balance sheet to promote more investment and I am happy that it has excelled. For the financing and equity injections government will provide, LNDC has developed a healthy pipeline of investments amounting to M10 billion and at least 10-15 thousand direct jobs over and above those coming from the laboratory.

Investment deals concluded cover manufacturing, horticulture, grains, meat production, agro-processing, poultry, dairy and cannabis, amongst others. For these to happen, I will lead a campaign to raise M1 billion for the LNDC to capitalize its commitment to these investments.

Government has established a formal investment mobilization process known as the investment laboratory. At this moment financial commitments amounting to M20 billion have been made by private investors. These commitments are likely to create 30,000 jobs in the next 5 years.

On August 21, the Government of Lesotho will hold its first ever job summit and open day for the investors. As Minister and a professional, I have played a central role in these endeavors.

In summary, Lesotho’s economic future is bright, but requires political stability and lowered risk of another election. The accusations or allegations, as you call them, are unfounded and uninformed. However, such are typical outbursts of all opposition formations and I am not surprised.

Some of the ideas I outlined above were developed in the first coalition government. The successor government failed dismally to take them forward and it took us getting back into government to revive them. The noise about bringing down this government is therefore very unfortunate and cannot be in the interests of the Basotho people as a whole.

The conflict in ABC is equally unfortunate and has put at risk the lives of Basotho. But to argue that there are formations outside the government that can coin a better future for Basotho is sheer folly. It is easy for those who have never had to deal these difficult questions nor have any experience in governing to imagine that they can do better now! This is not the time for experimentation. NW

Dr Moeketsi Majoro is the Minister of Finance

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