By Neo Kolane
The Lesotho Chamber of Commerce and Industry (LCCI) says the business community is pleased, as expected, that the government is showing commitment to strengthening the private sector.
This after suggestions that the government of Lesotho is showing commitment to strengthen the private sector, as it emerged from finance and development planning minister Retṧelisitsoe Matlanyane’s 2022/2023 midterm review budget.
Tabling the budget in the National Assembly, Matlanyane said there are some multiple shocks that are narrowing fiscal space and therefore a need to promote private sector led growth.
She said the multiple shocks characterized by the lingering effects of COVID 19, rising food and energy inflation, a slowing global economy, tightening global financial conditions and an ever-narrowing fiscal space, the government is faced with a difficult balancing act of supporting the vulnerable groups through well targeted and time bound measures while building buffers through fiscal consolidation and creating an enabling environment for long term private sector investment.
“In this regard, concerted efforts need to be made to improve the fiscal position and maintain debt sustainability by developing and adhering to credible medium-term fiscal frameworks that support the national development strategy.
“The medium-term fiscal plans need to entail clear and well communicated measures to expand the revenue base and to save revenue windfalls (such as volatile SACU receipts and income from commodity exports) while also employing a systematic review of expenditures for priority items that need to be preserved and non-priority items that should be cut.
“Essentially, it is crucial that government reduces its footprint and facilitates a smooth transition to private sector led economic growth.
“In this respect, unlocking of constraint to private sector growth through measures that improve business climate, regulation, simplification of business registration, effecting land administration reforms and enhancing human and other capital formation will be important,” Matlanyane said.
Weighing in on the midterm review budget, LCCI economist Chabeli Ramolise said the issue is that private sector led growth is always talked about and what matters is action on the ground noting that the previous government failed to enhance private sector commitment to building the economy.
Ramolise explained that as the private sector, they have matured enough and are eager that the new administration is willing to promote private sector contribution in economic growth through participation in business.
“We want the government to pave way for us to participate in the business sector as it has observed that it is spending much on buying from agents outside the country by procuring from manufactures.
“As much as the government wants to cut costs, it needs to have a programme that allows people to buy from producers and capacitate local manufacturers.
“Incentives and opportunities should be executed around that programme,” Ramolise said.
He added that with factories at Ha Belo and Ha Tikoe, the government should make sure the factories are utilized by local manufacturers and producers with entrepreneurs being given a chance in the manufacturing sector.
He said although there are companies that bottle water locally, the government ministries still buy imported bottled water.
However, Ramolise said it should be a commitment by all the ministries to support locally made products and manufacturers and not only the ministry of finance and development planning.
