Establish a sovereign wealth fund

I’m still of the opinion that Minister Retšelisitsoe Matlanyane would perform exceptionally well as a Minister of Foreign Affairs.

Moreover, Minister Lejone Mpotjoane would be a star performer as a Minister of Trade and Industry. On the other hand, Minister Moleko would perform incredibly well as a Minister of Finance due to his background in auditing and finance.

Why do I say this? We desperately need Foreign Direct Investment. We urgently need this in order to revive the economy and who’d be best suited to source investment? Yes, you are correct, Dr Matlanyane.

I think we need to redefine roles and tasks of our traditional ministries. Traditional meaning the tasks we ordinarily know ministries to undertake. The status quo.

In my opinion, the primary task of foreign affairs and international relations should be to source Foreign Direct Investment (FDI). Our embassies should be tasked with making direct contact with potential investors and sourcing skill.

For instance, do we have an embassy in South Korea? If not, why not? South Korea has become a global tech-hub. Why can’t we source investment and exchange skills with companies such as LG, Samsung and Hisense?

This is where Dr Matlanyane would come in and would receive resounding success as the ‘face’ of Lesotho.

We need to stop using foreign affairs as a portfolio intended to react to emergencies in South Africa. Well, as a primary role.

The same could be said about the Ministry of Finance. We need to redefine its purpose. I think it is time we start engaging a chartered accountant in the Minister of Finance’s activities.

I bring this up in reference to the mid-term budget that was presented last week, Friday, December 9, 2022. I disagree with the way the budget was presented. As I said, due to the rampant corruption as well as the ‘dry’ state coffers, the theme of the budget should’ve have been, ‘A statement of Financial Position’.

As I’ve previously highlighted, it’s time to apply basic accounting principles (IFRS). The Basic debit and credit entry. Basic T-account. What the Minister of Finance should’ve have tabled is a simple income and expenditure statement, thus far.

This would be very important to inform the next budget. She should’ve also started compiling the national Balance Sheet.

I mean, if you tell MPs that the GDP grew by 1.5% in the first quarter, you’re simply speaking Greek to them. Or speaking in tongues for that matter and I can bet that 70% of the MPs don’t even know what GDP stands for. We need to use simple language that a high-school student and a street vendor can grasp. KISS! (Keep It Simple and Straight to the point)

The statement of financial position would come in handy and help us immensely by informing MPs and the general public on the status of our finances.

For instance, how much cash do we have in our bank accounts? How many bank accounts does the state have? What is the value of our assets? What is the value of our liabilities?

But most importantly, we need to have a synopsis of our cash-flow position. I always tell people that, our biggest enemy is a mismatch between cash inflows and outflows. This is then loosely translated into cash-flow problems (’Muso ha o na chelete!)

I think this is what we need to solve as a matter of urgency and this is where the point of a sovereign wealth fund comes in.

If there’s an everlasting legacy that the Matekane administration needs to leave for this economy and generations to come, is a sovereign wealth fund. Yes, let’s name it Loti Fund.

This fund could catapult this economy out of its misery and place the country to a middle-income status.

Look, it really doesn’t make sense how Lesotho can become a low-income country, yet it is placed in the heart of a middle to high-income country. Right at the core! It means there’s something that Lesotho repeatedly get’s wrong.

Well, the answer is quite simple. Lesotho does not export. Remember, exports grow an economy. It’s either you export, or you perish. I mean, you can’t build an economy centred on government administration. It is wrong. We have to re-engineer and steer the ship towards exports.

But we need a starting point. I was quite impressed when Prime Minister Matekane insinuated that Basotho need to buy shares in the Lesotho Post Bank and I said, “Excellent!”

This could be a conversation that could spark an even greater conversation on how to establish a sovereign wealth fund.

I am not a fundamentalist by nature. I don’t hold on to things that do not work. I strongly believe that the Post Bank, BEDCO and the LNDC have long surpassed their mandate.

In fact, they reached their ceiling a long time ago just like the African National Congress. The mandate has become stale and it’s time to think of something bigger and stronger.

Yes, let’s sell shares in the Post Bank. However, let’s amalgamate the Post Bank with BEDCO and the LNDC and create one big strong and capable development/investment bank.

Then, list the new entity possibly named the Lesotho National Development Bank (LNDB) or Loti Bank (sounds a whole lot better), on the Maseru Securities Exchange (MSE).

As far as I can remember, there’s only one entity listed on the MSE and that’s RNB Properties. But this is wrong. We need more and more entities to list on the MSE.

Why not list the Standard Lesotho Bank? Why not list Letšeng Diamonds? Why not list Econet Telecom Lesotho. What about Nedbank Lesotho? All those entities are part-owned by the government of Lesotho.

Why not float the shares owned by the government of Lesotho in those entities and avail them to all Basotho nationals? Do you realise how much instant wealth this could create?

Do you also realise that we can easily establish a sovereign wealth fund from proceeds derived from the sale of those shares? Then, invest money from the fund globally.

This is how the Norwegian sovereign wealth fund named Norges Bank Investment Management Fund became the world’s largest sovereign wealth fund in the world. In the world! By the way, this

Loti Fund can actually be fused into the Loti Bank. You see!

Did you know that the Norwegian sovereign wealth fund has a small stake in over 9,000 companies’ worldwide? Companies such as Apple, Nestle, Microsoft and Samsung. This is how wealth is created.

Imagine if the Loti Fund or Loti Bank were a shareholder in MTN since its inception? We’d all be s**ting ice-cream right now!

‘Mako Bohloa