Let’s just kiss investment goodbye!

Do you know a feeling when a statement leaves more questions than answers? This is the feeling I got a couple of months ago when I was doing my Sunday shopping at a shopping centre named The Club in Waterkloof, Pretoria. I always try to shop where the most affluent citizens do their shopping, from time to time. Well in the hope that their riches will rub-off on me. Again, it’s always good to be in the company of affluent people. They’re always peaceful and cheerful. When you say, “morning”, they answer back with a smile say, “morning”. Ha ba bitter (they are not bitter). Unlike shoppers you find at U-save Ha Tsolo. Jesus! When you greet them, they often slap you with a bitter answer and say, “U thusoa ka eng Ntate?” (What can I help you with Ntate?) There was a particular Sunday, when I was given a grocery list to buy a few items and headed straight to the Club. As I drove into the basement level, I saw a red Ferrari in the rear-view mirror and thought wow! After parking my car, I jumped out and walked close to the Ferrari to get a better view of the Italian master-piece and to my surprise, it had Botswana number plates. “What, a Ferrari with Botswana number plates?” Yes, and the Ferrari was driven by a white young woman. You can just imagine the confusion on my face. A Ferrari, bearing Botswana number plates being driven by a white woman? This was the same confusion that I had when Kabi said he was opening a mine named Letšeng Diamonds. As we ascended on the escalators from the basement, the white woman saw the confusion on my face as I kept looking back at the car with a confused face and had to intervene. She then said, “No, that’s my husband’s car.” So I asked whether she’s from Botswana and she said, “No, my husband holds a Botswana passport” and she left me right there with more questions than answers. Now, this is the same feeling I got when I saw an advert in a local Sunday newspaper by the Lesotho National Development Corporation (LNDC). I’ve never felt so confused after reading it. The newspaper advert was in essence a statement made by the LNDC expressing concern over the exodus of investment in the textile-manufacturing sector. Well, it’s good to express concern but there are a number of questions that were left unanswered. In the advert, it also stated that there was going to be a ministerial task-team to look into the matter of factories closing down and investors leaving the country. But I thought what a bloody waste of time. Do you know how Lesotho Ministers are? Those Ministers will attend meetings to crunch biscuits, agree on nothing and adjourn the meetings. Look, if an investor doesn’t find value in investing in a country, will a bunch of ministers convince him/her otherwise? I could be wrong but my understanding is that an investor goes to the most fertile ground where it will yield the highest value or return on investment (RoI). The question is: what value does Lesotho offer over other places in the region? I wrote this opinion piece at the back of a report that was recently published by Rand Merchant Bank (RMB) named: Where to invest Africa 2020. It rates investment destinations across the African continent from top (Hot) to bottom (weak) investment destinations. In the report, the top five factors used in rating the countries are: access to financing, corruption, tax rates, inefficient government bureaucracy and inadequate supply of infrastructure. Surprisingly, Egypt was on top of the list with Morocco coming second and South Africa, in third position. It looks like Egypt is fast becoming a preferred destination because of its proximity to markets and mainly because of the trade corridor named the Suez Canal. Surprise, Surprise! Nigeria didn’t even make it in the top ten of the list. So, you can just imagine where playful countries such as Lesotho rank out of 54 states of Africa. By the way, Lesotho is ranked number 41 out of 54 states. The question is: What competitive edge does Lesotho hold over other places/cities in the region? Why would one open a factory in Lesotho over Durban, Gqeberha (Port Elizabeth) and Cape Town? Why would an investor pour money in a place that failed to save one Spur restaurant? One! Let’s put it this way. Given a scenario where you would suddenly receive a windfall of US$1 million, where would you invest it? The most logical answer to the question is where the US$1 million would yield the highest return. Now, given a set of variables present in Lesotho, would the US$1 million yield the highest return? Some would say, Comme-ci, Comme-ca! (Maybe, maybe not) I would argue and say there are more variables an investor needs to consider over and above the return on investment (RoI). The most obvious factors are economic and political stability. Access to land and services, public safety but one of the most important factors that Lesotho often overlooks is access to good schools and quality education for investors to educate their kids. Why would an investor overlook Cape Town or Durban that have excellent schools and go to a place that has substandard schools for their kids? Start with schools if you want to attract investors. Otherwise, where will their kids go to school? Good quality education equals good quality investment. Let’s be honest for a change and stop setting up ministerial task teams that will yield no returns. Lesotho is not fertile enough for investment for various factors. Let’s take a simple factor such as the border post issue. Why would an investor wait for imported material or supplies at the Durban port and have to incur transport costs to transport material about 600km inland? Wait for a day at the border post? Then manufacture goods and have to wait another day again to cross the border into South Africa. Time is money in manufacturing. Every second counts. The recent strike action and salary hikes have also not helped the situation. They have made Lesotho uncompetitive. What have the unions got to say now? I remember seeing one union boss/steward (the instigators of this exodus) on LTV asking the government to intervene over the mass exodus of factories and I said this must be a joke. You encourage workers to strike and run to government for intervention. Yes the salaries are low but half a loaf is better than nothing. In Sesotho we say, Sejo-senyane ha se fete molomo. I wrote this piece again out of knowing the frustration of doing business in Lesotho. I must say, this is by far one of the toughest business environments to conduct business in. Again, our chamber of commerce and industry is not helping the situation. Hello Ntate Fako! I mean, opening a simple business bank account in Lesotho is a real nightmare. I say this because I recently opened a business account in South Africa on an app and a few hours later, the account was opened. A consultant called me on the phone to verify a few things and I was good to go within 10 minutes. Two days later, my business ATM card was delivered. In closing, as I said last week, the only reform that needs to happen has to do with our stinking attitudes and poor mind-set. Investment won’t pour into Lesotho but will keep on leaving mainly because of the volatile political situation and an unfriendly business environment. Let’s fix our politics and consider turning Lesotho into a tax haven. Mauritius has gone that route and yielded tons of dividends. We have already lost everything and that could be the last resort to attract investment. Let’s do it! ‘Mako Bohloa