COVID-19 EXCLUSIVE: Lesotho's Majoro pleads with Basotho not to return home
The finance minister says he doesn't believe the kingdom has no cases of the coronavirus - but Lesotho can't take care of them.
JOHANNESBURG - Lesotho Minister of Finance Moeketsi Majoro says 93,000 Basotho rushed home on the eve of the lockdown in South Africa, and if the remaining 200,000 are repatriated as many wish, the country’s already ailing health system will not cope.
In an exclusive interview with Eyewitness News, Majoro appealed to Basotho in countries including China and South Africa to remain where they are, as those countries are better equipped for containing and treating the coronavirus.
The kingdom has announced fiscal mitigation measures even though it hasn’t recorded any confirmed coronavirus cases.
When Majoro presented his 2020/21 budget in February, he was planning on a R37 billion GDP and R20 billion in government revenues for the country’s two million people.
But the kingdom, which imports most food and medical supplies from South Africa, was reminded how fragile its health system and economy were when its only neighbor started recording hundreds of cases and went into lockdown, Majoro explained.
“I am not confident at all and I am not convinced that there are no COVID-19 cases in Lesotho. The risks and exposures that we see are completely inconsistent with no case.”
Lesotho may have no confirmed cases of COVID-19, but it also doesn’t have testing capability. So far, 23 samples have been sent to South Africa’s National Institute for Communicable Diseases (NICD) and 18 have come back negative, while the rest are waiting for the results that take at least three days. Despite this, Prime Minister Tom Thabane declared a state of emergency as a preventative measure.
Commercial borders between the two countries remain open for trade in food and medical supplies, and Majoro has now announced a raft of measures to keep the economy afloat.
R1.2 billion has been allocated, and R500 million of that goes to a Contributory Fund that the government has started and is now requesting donors to assist with.
The country is prioritising food security and R200 million will be spent on agriculture for food production, while vulnerable groups, including the elderly and informal traders, will receive grants.
The country’s highest private sector employer is textiles, which employs 45,000 workers. The government will pay them a subsidy of R800 monthly for three months.
The government will also pay business rentals in May and defer business and employee tax until September. Majoro says this is expected to ease cash flow for all tax compliant enterprises, and they will agree with the Lesotho Revenue Authority on how to stagger their payments when the lockdown is lifted.
“We are going to need a lot of money to provide this support, my initial estimate is that we are going to need two to three billion maloti to deal with the impact of COVID-19 by the end of the financial year,” Majoro told EWN.
Banks and insurance companies have been asked to suspend loan repayments for three months, and insurance companies asked to suspend instalment payments.
The country is also improving credit guarantee facilities for lenders to relax eligibility criteria to enable businesses to bounce back when the lockdown is lifted.
The government will pick up a larger share of “burden-sharing on losses”, he said, adding that at the moment government is sharing 50:50 and is planning to carry 75% of losses that will emerge.
On the health front, the biggest concern is testing capability. Majoro says two laboratories are now being upgraded at R2.5 million and testing costs about $28 each, but procurement of equipment from countries under lockdown remains a challenge.
“We need to tool up on testing equipment and we are acquiring it, but to my disappointment, I understand the markets are completely exhausted, so we don’t get it as quickly as we want. The testing platform for the national reference laboratory might take three weeks to be here, so it might be beginning of May before we get them. We received test kits from Jack Ma but there was a mismatch with the testing platform. But more merchandise is coming. Philanthropist Sam Matekane is also setting up laboratories, and MG Health that produces medicinal cannabis has offered its lab.”
As South Africa tries to keep ahead of its own response, foreign nationals are being left on the sidelines and many Lesotho nationals are now stranded. Expired work and visitor permits mean many are losing their jobs. Informal traders holding Lesotho passports are unable to get food assistance offered to South Africans, those on chronic medication are unable to go home to get their supplies and do not qualify to receive it from clinics in South Africa. Calls are now mounting from Basotho who want to return home.
The government of Lesotho says those who want to go home should register with the High Commission in South Africa, but Majoro says the prospect of all those returns keeps him awake at night.
“What do we do if 100,000 people show up? First, they need to go into isolation - we don’t have the capacity so where will they end up? In communities? Are communities ready? We still greet each other by hand, we congregate, so it’s extremely difficult. Some people have run away from isolation centres, so this has to be balanced with the right of return of our people from other countries.”
Majoro says Lesotho estimates that if many Basotho return home at the peak of the pandemic, the country will have 200,000 infections and 10% of them will require hospitalisation but the country’s healthcare facilities cannot accommodate this number. Majoro appeals to Basotho to remain where they are.
“Ten percent of 200,000 is still 20,000 but there is no bed space like 20,000 in Lesotho. Let’s say 300 come in, it would be a major burden for Lesotho. We have seen images on television of how demanding coronavirus patient care is - around the clock with sophisticated hospital beds and equipment, so we do not want to go any number more than 100, and I’m speaking as a non-medical expert.”
Majoro says Lesotho is already engaging South Africa to make the stay of its citizens more bearable under lockdown, and to begin planning for trade beyond coronavirus. While the kingdom will temporarily subsidise factory workers' salaries, this does nothing for revenues that come from exports destined for the US and South Africa post the lockdown. The US market is expected to contract by between 2% and 10% and the duty-free regime that Lesotho thrives on – African Growth Opportunity Act – is also expected to end in 2025. This is another worry that Majoro has.
“So it doesn’t look very well post-lockdown for the textile industry. But what they have are orders and we are praying that those orders are not cancelled. Let’s hope that we can go back to a significant proportion of the capacity we had pre-COVID-19. But it’s not just textiles that are going to suffer. There were already companies that were struggling that may not be able to come back. But depending on how the US, South Africa and the global economy recover, we have other companies that are interested but were limited by space. But that also depends entirely on how quickly the global economy recovers.”
Among companies already adapting to the pandemic-era is cannabis producer MG Health, which has started producing hand sanitisers made from medical marijuana instead of alcohol.
On the bright side, Lesotho is quickly discovering that it’s possible to save millions in travel. Majoro was part of a South African Development Community (SADC) meeting that went viral where countries held a virtual with secretariat in Botswana. He says he has begun to get buy-in on how effective the country has been in conducting business without face-to-face meetings.
“SADC secretariat struggled a bit with that technology but some really powerful decisions have been taken including cross-border guidelines. The costs of going to Tanzania, yes Tanzania has lost the tourism revenue, but we had budgeted R400 million for subsistence and fares for this year, and we are now planning to contribute that money to the COVID-19 response. For this year, there will be no travel except a few meetings that need lobbying, but those are rare.”
Majoro says his ministry struggled to get other arms of government to use virtual meeting tools even though licenses are paid annually. But this week, ministers held a meeting from their homes for the first time.
As an economist, Majoro says he believes the world will be a different place post the COVID-19 pandemic.
He says it’s striking how China - classified as a developing country - is now sending doctors and nurses worldwide, while digital technology used by South Korea and Singapore to track coronavirus cases is now in demand, and will probably overtake brute force that defines power.