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Brace for a very bumpy year ahead

There is something eerily sombre about this festive season. You see it in the unusually short queues in grocery and clothing shops around the country. Businesses, formal and informal, are reporting that this is probably the worst festive season in recent memory. Customers say they are struggling to buy things they could afford during previous holidays. It’s either they don’t have money at all or the little they have cannot go far.

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The reasons are many and varied but three stand out.
The first is inflation which has triggered an unrelenting spike in prices this year. The surge in prices started during the Covid-19 crisis and has not stopped. Much of our inflation has been imported from across the Mohokare River.

The second could be the contagion effect from South Africa’s economic woes. As South Africa’s economy boils so does ours because of the strong links between the two.
The third is the job carnage that has ravaged the textile sector, the biggest private sector employer.

By some estimates, more than 10 000 people have lost their jobs this year. Add the thousands laid off at the peak of the Covid crisis and the figure easily adds to around 20 000. That is half of the sector’s jobs in the past three years. The depressing news has been assiduous.

In the past three weeks, 3000 more were left stranded after their employer surreptitiously closed their two factories and disappeared without paying severance packages.

Many companies across the country have quietly closed. Those remaining are barely surviving, living from day to day while hoping for a change in their fortunes.
Sadly, next year doesn’t look promising either. Barring some dramatic and robust intervention from the government, the textile sector is likely to continue hurtling down the precipice.

We could be witnessing the end of Lesotho’s textile sector as we have known it for the past forty years. The few companies that have been struggling to remain afloat could soon drown.

The looming drought will make the situation worse. Droughts tend to fuel inflation, stretching safety nets like the old age pension and food grants.
Salaries in both the private and public sectors will continue to trail the inflation gnawing at the little buying power that remains.

In other times, we could hazard that things will get better but we don’t see any signs of respite this time. All we can say is brace yourself for more misery.
This is not fear-mongering or fatalistic but a view informed by the unfolding reality.

We don’t see the government doing much to stimulate the economy. The textile factories that closed are dead and buried together with the jobs.
There is no mob of investors clamouring to set up shop in Lesotho. South Africa’s economy is far from finding the road to recovery.

Basotho like to think of themselves as hardworking, resilient and independent people. That is true. But this time many have hit rock bottom and need their government to step up to the plate.
We call on the government to help revive the textiles sector.

Struggling companies should be assisted to get back on their feet. The informal sector needs urgent help. Young entrepreneurs should be supported. The government should remove the regulatory hurdles that impede business.

The economy should be diversified and weaned off its dependence on South Africa. The government should do more for the economy.

They owe it to the people after they came to power on the strength of their business credentials and private sector experience.
They said they know what ails Lesotho’s economy, and now they should fix it.

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