Resist taking populist route

Finance Minister Dr Moeketsi Majoro is expected to table his 2017-18 budget in Parliament next Wednesday.
The budget speech comes at a time when the Thomas Thabane-led coalition government is faced with monumental challenges after taking over power in June.
The budget comes against the backdrop of huge expectations by the people. The people who voted for the new coalition government expect the new government to hit the ground running.
For the majority a change of government should signal an immediate transformation in their economic fortunes. But that is not always easy given the financial resources at hand. Dr Majoro will need to come up with novel ways to share creatively this small cake among Basotho.
That is no easy task.

Next week’s budget speech will give the nation the clearest indication of where the coalition government wants to take this country in the next five years.
Our simple advice is that Dr Majoro and his colleagues in government must resist the temptation to go the populist route.
The government must remain frugal and operate within its means. We eat what we hunt. There is no need for the coalition government to widen the budget deficit for short-term political gains.

While we are hostile to push the coalition government towards a populist stance, it is our humble view that the budget will be tilted heavily in favour of capital projects to stimulate the economy.
Big capital projects will improve our weak infrastructure while creating jobs for thousands of unemployed Basotho.
Basotho are looking for a budget that will stop the loss of jobs.

They also want a budget that will stimulate the growth of the private sector. That will however only be possible if the government takes deliberate and conscious steps to support small businesses. The majority of our youths need support from the government to venture into businesses.
They need financial support and technical skills to set up and run their own enterprises. A strong private sector will result in more stable jobs for Lesotho’s youths. In fact, the future of this country lies in the growth of the small and medium enterprises.

The government must also move quickly to clean up the regulatory framework that impedes the growth of business.
Take for instance, the World Bank’s Ease of Doing Business report. Lesotho has not moved significantly on the rankings mainly because there are still some bottlenecks for foreign investors.
We need serious introspection as to what else we can do to free up the regulatory framework to attract foreign direct investment.

Investors are looking for political stability before they pump in their money. The coalition government must provide that stable political environment. It must send a clear and unequivocal signal to investors that their money is safe and that they will get a good return on their investment. Dr Majoro must also never forget the poorest of the poor amongst us. He will need to come up with intelligent mechanisms to cushion them from the harsh realities of our times. The old age pensions and the free primary school education programmes have gone a long way in providing safety nets for the poor.  He might need to widen the tax base to cater for programmes of that nature.