Credit rat­ings don’t lie

Lesotho Times - - Opin­ion & Anal­y­sis -

They have equally not been able to ex­plain why both the African Union and United Na­tions Peace struc­tures have had a say in re­cent weeks about the sit­u­a­tion in Le­sotho lead­ing them to de­cide to estab­lish a li­ai­son and sup­port for SADC in its en­deav­ours to bring about peace and sta­bil­ity in Le­sotho.

They have equally been un­able to ex­plain why two struc­tures of the US gov­ern­ment, MCC and the Trade Sec­tion in the Pres­i­dent’s of­fice deal­ing with AGOA have all been in­sist­ing on im­ple­men­ta­tion of the SADC de­ci­sions aris­ing from the Phumaphi re­port.

The only thing that one in­creas­ingly hears is the mumbo-jumbo about sovereignty and ill-thought-out as­per­sions about some of the re­gional lead­ers who are han­dling the Le­sotho case.

State pro­pa­gan­dists are how­ever in­creas­ingly find­ing that what they pub­licly say and what hap­pens on the ground are com­pletely dif­fer­ent.

Three ex­am­ples will suf­fice to il­lus­trate

How else does the EU sus­pend its bud­getary sup­port scheme to Le­sotho’s bud­get if these are merely per­cep­tions of po­lit­i­cal in­sta­bil­ity?

My take is that Fitch is only be­ing gen­er­ous and diplo­matic on Le­sotho’s sorry state of af­fairs and se­cu­rity chal­lenges.

These are all glar­ing for all to see and ob­serve. It does not need a rocket sci­en­tist to dis­cern that our econ­omy and se­cu­rity land­scape is fast go­ing down the precipice.

How­ever, to its credit Fitch ob­serves that the pre­vail­ing “po­lit­i­cal ten­sions are com­pli­cat­ing any pol­icy re­sponse to the grow­ing fis­cal deficit”.

It goes fur­ther to opine that, in Le­sotho, “The gov­er­nance and in­sti­tu­tional en­vi­ron­ment have weak­ened sig­nif­i­cantly fol­low­ing an al­leged coup at­tempt in 2014 , as ev­i­denced by the de­te­ri­o­ra­tion in World Bank in­di­ca­tors. The re­cent SADC com­mis­sion of in­quiry re­port its in­ves­ti­ga­tion into the death of for­mer army gen­eral high­lights the in­sti­tu­tional weak­nesses”.

Fitch goes fur­ther to dis­turbingly warn that it does not ex­pect any mean­ing­ful im­prove­ment in the po­lit­i­cal en­vi­ron­ment in the short­term.

The above dis­turb­ing sce­nario

painted by the in­ter­na­tion­ally­ac­claimed and rep­utable global credit rat­ing agency, Fitch, on Le­sotho’s econ­omy ought to sound alarm bells to those in power to em­bark on some re­me­dial ac­tion to ad­dress this neg­a­tive rat­ing.

They bet­ter take a cue from the eco­nomic gi­ant South Africa, which im­me­di­ately upon learn­ing of the coun­try’s de­cline in in­ter­na­tional credit rat­ings, sends its fi­nance min­is­ter on an in­ter­na­tional charm of­fen­sive to al­lay fears of both the do­mes­tic and in­ter­na­tion-

al in­vestors.

Le­sotho for its part has to take note and put into prac­tice the old adage that: “char­ity be­gins at home”.

The eco­nomic and po­lit­i­cal prob­lems that be­set Le­sotho are home­grown and they ought to be ad­dressed.

This sce­nario demon­strates clearly that global credit rat­ings do not lie as our govern­ments spin doc­tors would like us be­lieve that our coun­try is sta­ble, credit-wor­thy and po­lit­i­cally sta­ble.

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