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Think through this proposal



Trade Minister Joshua Setipa told a Trade and Investment Forum last week that it is high time foreign investors are forced to integrate locals in their businesses.

Thankfully, Setipa however offered a caveat saying the affirmative action programme must be carried out “without violating international standards of doing business”.

The general feeling among Basotho businessmen is that they are being sidelined by investors who come into Lesotho.

While there is nothing wrong in principle about empowering locals, Lesotho must be careful that such a policy does not result in more harm than good for the country. We must be wary of the pitfalls.

History is replete with failed examples of affirmative action programmes that failed. In most cases, affirmative action programmes have been mired in controversy after they were hijacked by the elites.

The result is that such programmes have in the majority of cases benefited a small clique of politically connected individuals.

Yet the argument for affirmative action is that it is meant to uplift the poor. That has not always happened.

Take for instance, South Africa’s much discredited black economic empowerment (BEE) model. The BEE model has been a vehicle to plunder state coffers while enriching a small clique.

The model has been bastardised to channel huge riches to a small group of connected blacks while the majority of South Africans have no access to the treasure trove. The majority still wallow in poverty.

The result has been a tiny group that is happy on one hand and another huge disaffected and disempowered group of masses with no hopes of ever getting closer to the cookie jar. This is a recipe for social upheaval.

Those who are benefiting from the programme often resist any attempts to tweak the system for the benefit of the majority.

Elsewhere in Africa, empowerment programmes for the indiginenous peoples have also been met with utter failure. Take for instance what has happened in Zimbabwe.

The Zimbabwean government’s indigenization programme has been one unmitigated disaster. What began as a noble programme in the early 1990s has turned into a looting frenzy with disastrous consequences for social harmony.

Of course, defenders of the empowerment programme will cite a few successes such as the transfer of land from the minority whites into the hands of the black majority.

However, the criticism still stands. The whole empowerment programme was driven by a narrow agenda to benefit those aligned to the ruling party.

The result is that foreign investors have packed their bags and left in droves. As a result of the way the empowerment messages were packaged, talk of empowerment frightened potential investors. Attempts to woo new investors have largely failed.

Zimbabwe remains a toxic entity no investor wants to touch.

Yes, we are not privy to the empowerment model that Lesotho wants to pursue.

But there are lessons that must be learnt.

Lesotho must not rush to implement such a programme. It must come up with a clearly thought-out programme or else risk plunging into unchartered waters with disastrous consequences.

Lesotho has its own unique set of challenges. We are not top of the potential investment destinations in Africa. We struggle to attract investors. We have an anaemic textile sector and a poor agrarian-based economy.

It would be a pity if we were to frighten the few investors who are here including those who are intending to invest in Lesotho.

We call for level heads when it comes to adopting and implementing any economic empowerment programme.

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