We shoot ourselves in the foot

Sometimes, we just need to speak the truth, whether it makes us uncomfortable or not. The undeniable truth is that we have a very high unemployment rate because of our inability to attract investment. We are poor because we cannot attract foreign investment. The other undeniable truth is that we are all competing for the same money/investment in the region. Money is fluid and loyal to no one. We cannot attract investment because we do not have a competitive advantage as compared to our peers in region. The closest examples are Botswana and eSwatini. There is a reason why both countries are working hard to turn their capital cities into world-class cities or mini-Dubai cities. The reason is simple: to attract investment. Given an ideal set of variables, citizens of any country should be afforded the opportunity to get a good paying job. However, in third world countries or even worse, least developed countries like Lesotho, citizens are left to fend for themselves and end up in the informal business sector/economy which is not good for any country. I actually want to touch on a very sensitive topic this week relating to the informal sector. Our people have given themselves a distasteful name called Baitšokoli. Well, I see them as small business people or micro entrepreneurs not Baitšokoli. Why would honest hard working people degrade themselves like that? There’s no margin of doubt that Lesotho is in crisis mode economically. There are a few glaring examples or indicators that one can easily observe to come to that conclusion. One of the indicators that are apparent when one visits our capital city of Maseru, is the bloated informal sector that has turned the city into a shanty town. A slum to put it bluntly. It is just shocking to the eye more especially for first time visitors to the country. Most often, it will be potential investors scouting for business opportunities in our city and this is where we get it horribly wrong. We fail to make a good and lasting impression to investors and that is how we shoot ourselves in the foot. There is a reason why we all dress well for job interviews, meetings and weddings. There is also a reason why we clean our homes and gardens when we are expecting visitors. In order to make a good and lasting impression. That is what our capital city should aspire to achieve; to give a good and lasting impression to investors. That is only when we can attract investment in order to create jobs. That is what Botswana and e-Swatini seem to get right and we seem to get horribly wrong on the other hand. The way our informal sector is structured is a clear sign of sporadic lawlessness. Take a look at Moshoeshoe Road near Sefika Shopping Centre, all the way up to the Main South One Road near St. Bernadette Primary School and to the National Convention Centre. What about the blatant defiance to authorities right in front of Woolworths (Fairways) on Kingsway Road? In the view of visitors and investors, this is an act of complete lawlessness! Funny enough, most of those vendors sell counterfeit goods that have been smuggled into the country. Secondly, some of the vendors sell on behalf of Asian business people. They are basically fronting for some Asian business people. In an ideal situation, a country would want to employ its citizens in a formalised economy or business sector for various reasons. The first reason is that a formal sector is more of a regulated economy with a set of variables that one has to adhere to. The most important one is an adherence to Tax regulations. A person that is employed in the formal sector/economy is obliged to pay some sort of Taxation, whether it is the income tax or pay as you earn, depending on the levels of income. Secondly, it is easier to calculate the contribution that each person makes and contributes towards the Gross Domestic Product (GDP) of a Country. However, a bloated informal sector has a few problematic variables. Firstly, a country cannot collect taxes from this sector and secondly, economists cannot measure the contribution of the sector to the Gross Domestic Product (GDP). Yes, by all means, citizens of any country have every right to survive and put bread on the table. However, the situation of the so-called “Baitšokoli” is an act of civil disobedience when people say, “We’ll do as we wish in order to survive because you cannot give us employment.” And government knows very well that it has failed its people hence the reason to turn a blind eye on this chaotic situation. But we are shooting ourselves in the foot here. Let us take a look at this situation logically. Any investor that wants to inject their hard earned money or representing a group of investors, will have a set of expectations when they visit a capital city to assess the market/opportunities. One of them is just simple, basic, law and order. Is the capital city clean? How do the citizens of the country conduct themselves? Does the place feel safe for me to stay here with my family? Now tell me. You get to Maseru City or Maputsoe as an investor and get welcomed by shacks (mekh’ukh’u) built with makeshift plastic covers. What’s the first thing that comes to mind? Secondly, you see 4+1 taxis driving as bad as hell. What impression does that give you? Surely not a very good one. Look, I have nothing against informal traders. They are business people trying to earn an honest living like anyone else but let’s at the very least have one clean street in the country. Just to “wow” investors. Let’s keep Kingsway Street as clean as we can, more especially closer to the Cathedral Circle. At the very least. Currently it is not pleasing to the eye at all and that chaos act as a deterrent to potential investors. A complete turn off! They give a very bad impression and remember that first impressions always last. The next thing, we’ll be complaining that we don’t have jobs. How will jobs be created if we can’t give a first good impression towards investors? The question is, which investor is brave enough to invest in a filthy city? Look at our international airport. Take a look at the chaos in Mazenod (Thota-Moli). What does it say to a first time visitor? The undeniable truth is that no investor will invest his or her money in Lesotho if our capital city continues to look like a slum. That’s the unfortunate truth unless we get our act together. We need to rethink and relook at the informal business sector. I would suggest the good old method of grouping the informal traders into cooperatives in the agriculture sector. We have a lot of productive people in the informal sector that are just not adding value to the economy. This will be an immediate solution for mass employment creation. This will also help to formalise the trade and for the state to earn tax revenue. That’s our food for thought this week. What’s your take? ‘Mako Bohloa