Basotho Enterprises Development Corporation
Friday, 11 July 2014 by BEDCO Marketing
Critical analysis of new-coming organisations

The private sector has been broached by the Government of Lesotho as an engine room for economic growth. This is the case everywhere in the world. This is so because the Government has realised that it can no longer absorb graduates who complete tertiary education to work in the civil service. In Lesotho, the civil service is saturated as it takes almost 3-4 and to some five years before securing a job in the civil service. This places severe strains for families and the graduates themselves to undergo training and no returns are seen. It becomes a serious disincentive for others to go to school to the level of tertiary education. It also undermines the government’s efforts to invest in education if those educated with taxpayers money just end up in streets seeking jobs. Also, it does not add much value to the needed human development plans of the state.

Therefore, the government encourages growth of private sector so that when graduates complete their tertiary education, they do not expect to be absorbed by the civil service, but engage in business and create jobs for others. This means that the Government only remains the policy maker, not job creator. Ideally, those who work in the civil service perform primary responsibilities of delivering service to the people to facilitate their business development. People who are employed in the civil service must be those who make payments to businesses that provided service to the government, be it for construction of a road, a bridge, catering, and stationery or for any other service provided to the government. Others should be those who facilitate business by registering private companies, passport services and others. The rest must be self-employed either in partnerships, sole traders or in companies. The state must play the facilitation and regulatory role while a great chunk of work is done by the private sector.

In most countries, micro, small and medium enterprises are the backbone and engine room of economic growth. That man and woman or even youth seen in the streets, bearing the ghastly cold winters is the one who is jerking the economic growth of the country as he pays huge taxes that go into the coffers of the country. The men in suits and ties and women in smart clothes add little in terms of economic growth. Instead, the latter group are a burden and liability to the state as they consume from the coffers because their salaries are paid from the taxes that come from the man and woman in the street. That is the reason why civil servants should be fewer than those self-employed working in the private sector. The state as well must encourage people to be self-employed. However, the scenario has been the total opposite as politicians when they canvass their political manifestoes promise people jobs in the civil service. When they have been voted, they take some of the voters and dump them in the jobs that were supposed to have long been leased out to the private sector. Cadre deployment, which is done in pursuit of garnering voters is only short-term and distorts long-term economic growth as it creates dependency on the civil service as the sole employer.

Politicians have created dependency on the civil service for a long time and this has been evidenced by the list of graduates who await deployment into the civil service through applications submitted to the Public Service Commission (PSC). These are counted in thousands and only a small fraction is absorbed annually.

Efforts to embrace entrepreneurship as the way to go in growing the economy is gradually taking shape and a few politicians are talking the language of job creation that is driven by the private sector. The National Strategic Development Plan of Lesotho (NSDP) talks directly to this fact of job creation up to 10, 000 jobs per annum. The 2014/2015 budget speech delivered this year in parliament has emphasised this fact of private sector-driven job creation.

However, the practice on the ground is a different one. There seems to be more organisations that are established to deal with entrepreneurial development in Lesotho, while results of this are too little. But if one strong entrepreneurship corporation or company was assigned the role of developing entrepreneurs, Lesotho’s economy would grow tremendously. BEDCO is therefore well-placed to perform this role. In an ideal scenario, resources, financial, human and infrastructural would be channelled towards one area, BEDCO to drive the agenda of entrepreneurial development. The many mushrooming entrepreneurial organisations that seek funding from the government weaken the grand objective of having the private sector as the engine for economic growth as this strains the small cake among a number of organisation, some of which have little capacity to do so.