Moeketsi Majoro took over this week as Lesotho’s prime minister from the embattled Tom Thabane. How might Dr Majoro break the seemingly perpetual cycle of political instability and economic frailty in the mountain kingdom?
Even before the coronavirus, times were tough in Lesotho. Austerity measures were in place as economic growth was stuck at 1.4%. “We ideally need 10% economic growth,” said Moeketsi Majoro as finance minister last November. “Five percent will only just be enough.”He must unite a fractious political elite at a volatile economic time.
Poverty is omnipresent in the mountain kingdom. Some 60% of rural Basotho live on less than $1.25 per day. As much as 80% of the rural population, two-thirds of the total, rely on agriculture for their livelihood, which remains almost entirely rain-fed. Declining crop production translates into food insecurity for nearly 40% of the total population.
It’s therefore unsurprising that many of Lesotho’s skilled population leave for South Africa, where as many as one-quarter live and work, including some 50,000 mineworkers. Also, that in recent years public sector employment grew while the private sector shrunk. The public sector wage bill equals half of the national budget, the highest ratio in sub-Saharan Africa.
But this cost advantage is vulnerable to any change in US regulations. While AGOA has been extended and amended several times since its first phase , most recently until 2025, the arrangement is always vulnerable to political vagaries.CGM, a Taiwanese-owned jeans manufacturer in Maseru, employs 3,000 people to manufacture half a million pairs of jeans per month, or 25,000 items per day in Maseru.
“‘We calculated, at the time [in 2012], that the South African market was worth 700 million clothing units per year,” says their CEO, meaning that their 500,000 units would easily be absorbed by South African retail chains.
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