The Prime Minister, Mr. Ntsokoane Samuel Matekane says there is no doubt that State Owned Enterprise (SOE) reform and corporate governance remain critical to Lesotho’s economic development.
He said this during the meeting with SOEs on Wednesday.
Mr. Matekane noted that the Coalition Agreement acknowledges SOE`s agenda as one of the key policy measures to be implemented during their tenure in government.
He said the centrality of SOEs in his inaugural speech whereby in the 100 days program of action, policy actions were outlined regarding the performance and management agreements of the SOEs and the portfolio ministries on behalf of the government.
He noted that the government is in fiscal distress and so are most of the SOEs, saying the situation is untenable.
The Prime Minister stressed that the SOE has to deliver on its mandate to recover the economy and close glaring development gaps of low access to basic services in particular.
He said the government took several stages to rationalize the sector and increase its efficiency, through a privatization program in the late 1990s, adding that the program also brought about the associated structural reforms which include the creation of independent 5 regulators for the public utilities and corporatization of some entities in strategic sectors to advance government socio-economic development mandate.
Talking about corporate governance, Mr. Matekane appreciated a noble action taken through the launch of the “Mohlomi Corporate Governance Code” in August 2021.
He acknowledged a collective effort by all to chart the way forward in an endeavour to entrench principles of good governance, saying it is against this background that the Executive will make sure that the good principles and the guidelines that are detailed in the Code are applicable to public and private sector institutions where the government has a stake.
“I wish to assure you of the commitment of the Government to continue to engage with all of you through platforms such as this one. We need this kind of conversation to strengthen our systems,” he stressed.
Also speaking, the Minister of Finance and Development Planning, Dr Retšelisitsoe Matlayane said the SOEs in Lesotho were first created to empower local companies, promote domestic investment, improve service delivery, and generate income to strengthen the economic development of the country.
She mentioned that in 2016, the Ministry of Finance and the World Bank commissioned a study on rapid assessment of the efficiency of the SOE sector in Lesotho and to assess the development of the sector post-privatisation policy that came with the structural reforms and created the sector.
She noted that only the SOEs in which the Government has a minority stake have been paying dividends and the amount received has been fluctuating, saying in 2016/17, dividends totalling to LSL 250.0 million were received and that this reduced to only LSL 1.4 million in 2017/18 but recovered to LSL 237.5 million in 2018/19. In the 2020/21 financial year, the collection of dividends was low.
The Post Bank Officer, appealed to the government and other parastatals to bank with Lesotho Post Bank saying it is the only Lesotho Bank, saying their profits benefit the country other than other banks.
She noted that if the government supports them, it will be easier for the bank to pay dividends.
This forms part of the Prime Minister’s meetings with various sectors since his inauguration on October 28.
