Business Friday May 18, 2018
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Govt plugs leaks in wool and mohair trade MORDEKAI MUSUNDIRE
T
he government has moved to c u rb t h e age - old hemorrhaging of the economy in the wool and mohair sector by gazzetting new regulations guiding the marketing of wool and mohair. I n a gove r n m e n t gaze tte dated Friday May 4, 2018 the government clearly spells out the new modus operandi in the marketing of wool and mohair, a sector which many in the past few months felt had immense potential to boost the national fiscus but has been left in the hands of foreign middlemen for decades. Under the new regulations, it is illegal for anyone to engage in the business of wool and mohair: shearing shed; brokering; testing; trading and auctioning; processing; and exporting “unless the person has obtained a license to d o s o f ro m t h e M i n i ste r
responsible…”. According to these regulations which came into effect on May 4, 2018 such a license obtained from the minister is “not transferable”. The minister may amend, suspend or cancel the license in the event that an operation closes its business, or the license is not used appropriately or is used in fraudulent activities, or the holder allows another party to use the license. These clear but tight measures come hard on the heels of a number of concerns by authorities. Small Businesses Development M i n i s t e r, C h a l a n e P h o r i , a few weeks ago called on all stakeholders to depoliticize the wool and mohair sector if the country is to meet some of its targets in wealth creation, job creation and sustainable economic growth and development. “I am not an expert but those who have conducted studies have found out that a lot of benefits
can be drawn from this neglected sector,” Phori said, though warning a lot of dirt and lack of transparency surrounds the wool and mohair deals. He said studies have shown that at full operation and capacity L e s o t h o ’s wo o l a n d m o h a i r sector can create up to 2000 sustainable jobs with more jobs from subsidiary operations as well as the chain supply. Phori disclosed a few weeks back that the government had drafted new regulations meant to harness this lucractive but largely neglected sector. “Right now we have gazetted the regulation of mandatory wool and mohair processing in Lesotho and I can almost certainly say there are 50 jobs assured once operations resume at the Lesotho Wool centre,” he said. According to Phori, for more than 44 years that Basotho wool and mohair farmers have been represented by the middleman in
their produce trade, the country has lost millions of Maloti that cannot easily be accounted for. “We are here talking of huge sums of money. I have learnt that of the M800 million that Lesotho p ro d u c t i o n m a ke s f ro m t h e markets, only M300 to M400 is actually accounted for in Lesotho and the rest is lost to South Africa,” he said. He added that over the years, Ba s o t h o fa r m e rs h ave b e e n charged taxes on their trade returns but the agents in the trade have not remitted a single penny to the country. Phori saying these discrepancies have to be followed up to the very end to bring trade justice to Basotho. “What the government of Lesotho wants is to see the sector open and trade deals being transparent. We are aware there are people who have been benefiting personally from these deals and we need to get rid of that
and make sure that each and every participating farmer gets their fair benefits. “There has also been a lot of resistance in the introduction and implementation of the new regulations, but we will get to the bottom of this matter,” Phori said, adding that the passion of growing indigenous Basotho businesses is what will drive his ministry to achieve this goal of processing Lesotho’s wool and mohair produce to suit markets demands instead of just sending raw products to the market. Lesotho, still smarting from the depletion of revenue spawned by the ever-dwindling Sacu revenues is stepping up its act to plug any leakages in the economy. Earlier this year, Finance minister Dr Moeketsi Majoro, while presenting the national budget estimates for the current fiscal year bemoaned the dwindling national revenue, urging Basotho to tighten their belts.
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Responsible borrowing
can put you in the driver’s seat Lesotho Credit Information Sharing (LCIS) aims to encourage responsible borrowing practices for Basotho and influence increased credit extension while alleviating the risk of indebtedness to create an economic society with a good credit record through collection and sharing of credit information. Do the responsible thing; pay your loans on time and avoid being overly indebted to maintain a good credit record. The LCIS is a joint national initiative by Government, the Central Bank of Lesotho, Credit Providers, the Credit Information Bureau and Development Partners. Contacts Central Bank of Lesotho | Corner Moshoeshoe & Airport Road P.O. Box 1184, Maseru 100, Lesotho Tel: +266 22 232 000 | +266 22 232 022/24 www.centralbank.org.ls Terms & Conditions Apply.