Econ­omy un­der siege

Lesotho Times - - Opinion & Analysis - Ut­loang Ka­jeno

HEAD­LINES such as “Bud­get de­lay sub­dues eco­nomic ac­tiv­ity” and “Govt pays off MPS loans” ( Le­sotho Times, Novem­ber 12 2015) make for dis­turb­ing read­ing. This is more so be­cause Le­sotho has a very frag­ile econ­omy that needs to be man­aged with a great deal of cir­cum­spec­tion and ex­per­tise.

As time goes and the El Nino phe­nom­e­non takes its toll on the coun­try, the econ­omy is bound to be wrecked and brought to its knees. El Nino is an ir­reg­u­larly oc­cur­ring and com­plex se­ries of cli­mate changes that is now af­flict­ing Sub-sa­ha­ran Africa in­clud­ing Le­sotho. It is char­ac­ter­ized by un­usu­ally warm weather pat­terns that are ac­com­pa­nied by semi-arid weather pat­terns, se­vere drought, and per­sis­tent dust-bowl like weather with sti­fling heat.

Th­ese acute cli­mate con­di­tions are fore­cast by cli­ma­tol­o­gists to pre­vail in Le­sotho for the next six to eight months that is un­til af­ter March, 2016.

Nat­u­rally, one would ex­pect all the ma­jor role play­ers in the econ­omy par­tic­u­larly the govern­ment as the van­guard in­sti­tu­tion in all spheres of the na­tion’s life and wel­fare, to make hay while the sun still shines, so to speak. How­ever, if re­cent de­ci­sions taken by the govern­ment are any­thing to go by, then the govern­ment is trash­ing the frag­ile econ­omy and omi­nously, it is not do­ing any­thing to ar­tic­u­late and im­ple­ment sus­tain­able eco­nomic poli­cies. Sadly, this is to the long-term detri­ment of this im­pov­er­ished na­tion.

In its Quar­terly Re­view of the mon­e­tary and fi­nan­cial ac­tiv­ity for the pe­riod March to June, 2015, the Cen­tral Bank of Le­sotho (CBL) re­ports that: “The bud­get speech was only read in May while the Ap­pro­pri­a­tion Bill was re­leased in June 2015. Sim­i­larly, the re­ceipts from SACU (South­ern African Cus­toms Union) re­view pool de­clined by 5.2 per­cent in June, 2015 as per the ap­proved bud­get for the fis­cal year 2016/2015”.

SACU is a rev­enue pool that Le­sotho, Swazi­land, Botswana and Namibia are en­ti­tled to from the South African econ­omy at the be­gin­ning of ev­ery fis­cal year.

The re­view also stated that all com­po­nents of rev­enue for the govern­ment — tax rev­enue, grants, other rev­enue sources and SACU re­ceipts-de­clined in the quar­ter by un­der re­view. De­spite this gloomy eco­nomic pic­ture be­ing painted by the CBL, the govern­ment is dis­burs­ing the dwin­dling rev­enue as if there is no to­mor­row.

This is ev­i­dent in the re­port that the state paid a cer­tain com­mer­cial bank a whop­ping M32 mil­lion be­ing a mea­sure to write-off the in­di­vid­ual loans of M500 000 each leg­is­la­tor in the pre­vi­ous par­lia­ment plus in­ter­est on the loans.

This de­ci­sion is as un­for­tu­nate as it does not make eco­nomic sense for the fol­low­ing rea­sons. Os­ten­si­bly, the govern­ment re­paid the loans plus the in­ter­est ar­gu­ing that the dis­so­lu­tion of the pre­vi­ous par­lia­ment was not of the mak­ing of the leg­is­la­tors but due to in­ces­sant squab­bling by the coali­tion part­ners in the pre­vi­ous govern­ment. How­ever, ev­ery­thing, in­clud­ing the sur­vival of that govern­ment was within their pow­ers. It def­i­nitely was through no fault of the elec­tors.

The other im­por­tant ar­gu­ment raised by those pay­ing-off the loans is that of le­git­i­mate ex­pec­ta­tion. Briefly they ar­gue that the leg­is­la­tors ex­pected that the Eighth Par­lia­ment would last its full five-year term and there­fore within that time would have fully ser­viced the loans. Le­git­i­mate ex­pec­ta­tion is a prin­ci­ple of English law based on the prin­ci­ples of nat­u­ral jus­tice and fair­ness to pre­vent abuse of power.

How­ever, this ar­gu­ment fails dis­mally be­cause this prin­ci­ple can­not be suc­cess­fully raised where the other party has been neg­li­gent or acted un­rea­son­ably. Neg­li­gence may be de­fined as ab­sence of that de­gree of dili­gence which the law ex­pects to be ob­served by ev­ery­one in the or­di­nary re­la­tions of life, and it con­sists of com­mis­sion or omis­sion by the other party. The ar­gu­ment there­fore fails dis­mally.

It is even more dis­heart­en­ing to learn that ac­tu­ally it is only the leg­is­la­tors who ben­e­fit­ted from the loans yet they are made to pay for the in­dis­cre­tions of politi­cians. It is even more hurt­ing when con­sid­er­ing that some Mem­bers of Par­lia­ment (MP’S) have their loans paid-off even though they re­turned to the Ninth Par­lia­ment and crit­i­cally are still gain­fully em­ployed mean­ing they have ac­cessed the some ben­e­fits twice.

Fur­ther­more, the govern­ment has, by its own ad­mis­sion pub­licly, paid more than M15 mil­lion to fired se­nior civil ser­vants whom the govern­ment con­sid­ered to be ap­pointees of the pre­vi­ous govern­ment. This was done well be­fore their con­tracts of em­ploy­ment had ex­pired mean­ing that govern­ment pays for two prin­ci­pal sec­re­taries (PS) for in­clud­ing ben­e­fits. The same treat­ment has been ex­tended to about 10 of Le­sotho’s di­plo­mats based abroad.

As if that were not enough, the ju­di­ciary by its own ad­mis­sion paid or is in the process of pay­ing the for­mer Court of Ap­peal Pres­i­dent Michael Ramod­ibedi over M700 000 for work that he never did while he was sus­pended and fi­nally re­signed his po­si­tion.

This pay­ment is dis­turb­ing be­cause the ar­gu­ment goes that judges of ap­peal are paid de­pend­ing on the num­ber of cases they hear, that is, on com­mis­sion and not like other judges who are paid a fixed monthly salary.

Fur­ther­more, this pay­ment the ju­di­ciary ar­gued, was based on the ba­sis of a le­gal ad­vice that they so­licited as le­gal ba­sis for the pay­ment.

We need to draw a dis­tinc­tion be­tween le­gal ad­vice and le­gal opin­ion. The for­mer on the one hand is so­licited when the re­questor is un­sure of what ac­tion to take but is not bind­ing. Fur­ther, if you feel un­com­fort­able with a le­gal ad­vice, you can opt not to fol­low it.

Le­gal opin­ion, on the other hand, is pop­u­larly called judg­ment or rul­ing and be­cause it is bind­ing un­til re­scinded or amended by a court of a su­pe­rior stand­ing/rank is bind­ing and is also called le­gal prece­dent. The dis­tinct ad­van­tage of le­gal opin­ion is that it is has the ad­van­tage over le­gal ad­vice, in that it has un­der­gone the rigours of nat­u­ral jus­tice which forms the cor­ner­stone of our law.

Th­ese are firstly, that both op­pos­ing sides to dif­fer­ent views will have been heard by an in­de­pen­dent neu­tral ar­biter. Se­condly, the per­son who re­ceives the le­gal opin­ion will not be the fi­nal ar­biter, that is, judge in his own case. It is there­fore flawed to have au­tho­rized the said pay­ment to the for­mer pres­i­dent.

The govern­ment again made a very strange de­ci­sion in re­cent months when it awarded a ve­hi­cle sup­ply and main­te­nance con­tract con­tro­ver­sially to a South African com­pany. Nat­u­rally, one would ex­pect the govern­ment to give pref­er­en­tial treat­ment to Ba­sotho so that they can be eco­nom­i­cally em­pow­ered but

Con­tin­ued on page 16 . . .

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