By Neo Kolane
The ministry of trade, industry and business development has come in for tough criticism over its perceived reluctance to enforce laws that prohibit expatriates from engaging in businesses that are exclusively reserved for Basotho traders.
This after the ministry recently announced plans to review a section of the Business Licensing and Registration Regulations (Amendment) 2021, which expressly lists enterprises set aside for indigenous Basotho and which non-indigenous traders may venture into.
The regulations aim to promote and develop indigenous entrepreneurship by reserving 47 small, medium and micro-sized enterprises, exclusively for indigenous citizens.
“The license issued to a non-indigenous citizen or an enterprise whose proprietor, shareholder, partner or director is not an indigenous citizen shall remain in force until the expiry of the license.
“Where shares or interests are transferred to a non-indigenous citizen, the license shall not be renewed upon expiry,” the regulations state.
However, in a statement dated May 1 2024, the ministry said a task team had been formed to work towards implementation of Section 34 of the law, and had recommitted itself to work tirelessly to ensure implementation to finality.
The task team is made up of business associations and some government ministries.
“In an endeavor to implement the regulations, the ministry sought government policy direction and such policy directed that the ministry shall not implement the regulations retrospectively, that is, businesses that have been licensed to operate in the reserved sectors will not be affected by the regulations and thus should continue operating.
“This, therefore, says to accommodate the directive, the ministry is left with no alternative but to review the regulations. Furthermore, the government policy directs that the 47 reserved business items be revisited to ensure that it is all encompassing and should also allow possible withdrawal of other business items.
“The ministry, in agreement with the task team, has started the review of the regulations and will be working towards implementation,” the statement reads.
The ministry’s intentions have evoked a swift and unambiguous reaction from the corridors of the country’s parliamentarians. The legislator for Mekaling constituency, Thabiso Lekitla, this week handed in a notice of motion that the National Assembly, “having allowed the Business Licensing and Registrations Regulations, 2021, expresses its disappointment on non-implementation of the regulations which intend to empower Basotho entrepreneurs, and accordingly urges the government to implement the regulations with immediate effect without any alteration.”
In a similar vein, the secretary general of Lesotho Chamber of Commerce and Industry (LCCI), Fako Hakane, did not mince his words. He poured scorn on the government’s move to review the regulations, in essence likening it to reinventing the wheel.
Hakane pointed out that the Business Licensing and Registration Act has existed since 2019 and LCCI, in collaboration with the ministry, even held roadshows around the country to sensitise traders about it.
“The ministry decided at that time to give non-indigenous people who were running businesses reserved for Basotho 12 months to wrap up those businesses. The position that was adopted was that their licenses would not be renewed upon expiry because they were expected to move away from those businesses.
“Our expectation, therefore, was that the ministry would see to it that the regulations were implemented. A task team was assembled to ensure that the Regulations are enforced.
“As LCCI, we believe the ministry should do the right thing, instead of coming up with excuses for not enforcing the law. There was nothing wrong with forming a task team because its terms of reference were within the perimeters of the law,” Hakane said.
He insisted that when parliament has passed regulations like it has done, it is not possible for them to be hindered by any policy.
He emphasized that parliament is the supreme law making body of the land.
“Also, there is a gazette which operationalises the regulations. What should have happened was for the ministry to check if there were any non-Basotho-owned businesses that were still in operation even after the deadline prescribed by the law.
“We should have known what will happen to such businesses because people cannot go against the provisions of the law,” Hakane said.
He pointed out that the government’s decision not to implement the law retrospectively contradicts the very same promotion of economic equity which the ministry claims to be committed to fostering.
He described the act as ‘unfortunate’ if upheld.
“They (the ministry) should go back to the drawing board to see to it that everything is done right. Their position is not in the interest of the Basotho trading community as it does not foster economic empowerment and inclusivity.
“Some people might say the regulations are discriminatory. It would be unfortunate if they did, because that is what we call positive discrimination aimed at empowering the indigenous Basotho who are in business. Many people who are in business are not necessarily in business by design but rather by default.
“The 47 reserved businesses did not just come out of nowhere; they are a result of an intensive and extensive research which concluded that they should be in the hands of indigenous Basotho. Lack of capacity on the side of Basotho means they are inclined to partner with foreigners, but with a paper trail showing that Basotho have more shares compared to the foreigners, for example, in a franchise,” he said.
Hakane added that it was unfortunate that the ministry has made the statement without having made thorough consultations with all stakeholders, even in the presence of the task team.
“As LCCI, we believe that is tantamount to putting the cart before the horse. That statement should be retracted so the matter can be dealt with properly,” he indicated.
Local seamstress, Thakane Makhetha, proclaimed that the biggest challenge in her sector is that it is flooded with tailors of Chinese origin whose stronger financial muscle enables them to purchase equipment and materials in big bulk from as far afield as Asia.
“As for us local dressmakers, we cannot compete with the Chinese because we have to contend with problems like unstable power supply, limited financial resources and poverty,” she lamented.
