…but economists warn bankrupt gvt can hardly afford it
Mohloai Mpesi
A chorus has erupted calling upon the government to implement a food subsidy program on grains and other basic foods for Basotho in the face of rising commodity prices.
Civic groups and politicians have come out in one voice to urge Prime Minister Sam Matekane’s government to consider such a subsidy.
They argue that scores of Basotho households are struggling to make ends meet amidst consistent increases in the costs of food, power and fuel.
In Lesotho’s ragged economy plagued by high unemployment and continuous loss of jobs in key sectors like the textiles industry, they said, the ball was in the government’s court to relieve suffering Basotho.
But economic analysts have cautioned that the move might work in the short-term “but will not bear dividends in the long run”. It was also doubtful the perennially broke government could afford any subsidies.
Last week, the national milling company, Lesotho Flour Mills (LFM), said it would increase maize meal prices by seven percent starting Monday this week.
The LFM warned more price hikes should be expected in May 2024 on the back of rising input costs.
LMF, produces Chai, and Mother’s Delight maize meal, as well as Letlotlo Bread Flour. It also packages LSP sugar.
The latest hike had been prompted by the drought currently ravaging Lesotho and the rest of the southern African region.
Just last week, and for the second time in a month, the Petroleum Fund of Lesotho announced hikes in fuel prices and paraffin, guaranteeing Basotho the worst winter ever. Exacerbating the situation is the recent 9.5% hike on electricity tariffs.
These developments mean that it will be virtually impossible for thousands of indigent Basotho households, to feed properly and keep warm in the 2024 winter season.
In a statement this week, civic group, Section II, urged premier Matekane’s government to prioritize implementation of a food subsidy program for Basotho “in light of the distressing escalation of food prices that a significant portion of the populace cannot afford”.
“Section II calls upon the government led by Prime Minister Sam Matekane to reaffirm and restore faith in the future of our nation. We firmly believe that implementing a food subsidy program would offer much-needed relief to the hundreds of thousands of Basotho grappling with poverty, albeit belatedly,” Section II said.
“Despite the monumental challenges facing our national finances, providing affordable food to the impoverished masses would be a profound and welcome relief, regardless of potential impacts on other sectors.”
Basotho National Party (BNP) Machesetsa Mofomobe, has also jumped onto the food subsidy bandwagon, calling on the government this week to “consider a food subsidy following the recent skyrocketing of food costs”.
Mr Mofomobe said the government was supposed to play its role in helping poor citizens but was “mum” in the face of mounting hardships for the poor.
So determined is Mr Mofomobe to get the government to act that he plans to file a motion in the National Assembly seeking to compel it to extend a food subsidy to “ease the load” on the populace.
Mr Mofomobe took a journey down memory lane to 2016 when erstwhile Prime Minister Pakalitha Mosisili, implemented a year-long program “to meet Basotho halfway on grains and some basic foods”.
He added that former Prime Minister Moeketsi Majoro’s government had implemented an extra subsidy on fuel for a couple of months in 2021 to cushion people from the ravages of Covid-19. So premier Matekane should follow suit.
“The El Nino status has worsened, and we were very unfortunately, made aware of this in advance but we did nothing about it. This says Basotho are now facing hunger. Our expectation is that the government of Prime Minister Matekane should intervene in this problem,” Mr Mofomobe said.
“The government should declare a state of emergency on hunger and ask for help from other countries that are friends with Lesotho, in the African continent and the entire world.
“Government needs to intervene through a subsidy on maize meal and other basic food commodities. In Lesotho, when the nation is burdened by poverty, the government intervenes to help the poor. That has been the tradition…
“The government of Mr Mosisili did that during the crippling drought of 2016 when it subsidised maize meal and other basics. The subsidy was around M50. When one bought maize meal, the government would pay M50 on their behalf”.
The BNP leader further recalled how Dr Majoro’s government implemented an extra subsidy on fuel to cushion Basotho from poverty during Covid-19.
“When a Mosotho purchased fuel, the government would pay an extra M1.60 subsidy on every litre of petrol,” he said.
Main opposition Democratic Congress (DC) leader, Mathibeli Mokhoth, has also expressed concern over the rising food prices, which he said posed a threat to the stability of the nation. He spoke at a party event in Mohale’s Hoek at the weekend.
Mr Mokhothu said that the 2024-25 National Budget estimates delivered by Finance and Development Planning Minister Retselisitsoe Matlanyane “posed a threat” and had caused the recent hikes in food costs.
“We have just passed the national budget estimates in parliament. I once made a statement in parliament that this budget is a predicament and is going to cause the hiking of prices of foods and goods,” Mr Mokhothu said without explaining the link between the budget estimates and the i food price increases.
“Two weeks did not pass after making that statement. Prices started increasing in the country. I am aware that maize meal is going to be very expensive. In other places you will not be able to buy 50kg of maize meal with anything less than M500.
“You see now that the maize meal price has increased, I give it only two weeks before another hike is announced. This is due to poor harvests owing to the drought that befell the country. Maize meal prices will consistently increase.”
He said it was likely that by October this year, maize meal costs would have increased multiple times alongside other basic foodstuffs, clothes, and fuel.
“The cost of food and clothes is going to increase, fuel prices have increased, as well as those of toll gates, water, electricity,” he said.
“The government should therefore subsidise grains and basic food commodities when the situation is like this.”
National University of Lesotho (NUL) lecturer in the Department of Economics, Leseko Makhetha, said while subsidising food products and or fuel was prudent, it was only a short gap measure.
“Government needs to come up with long term solutions to avoid internal crises in the future. All these problems are a result of the government delaying to intervene when the situation called for it. It will be difficult to intervene with subsidies now given the government’s budget predicament,” Dr Machema said.
“I am not sure how much the government has in reserves in case of crises like we have now. But we all know it does not have money…..
“The issue of increasing costs of oil and other food products, which are not produced in the country is influenced by global oil prices. We don’t have control over global oil prices. They are not stable. And that will affect us.”
He said the government should always anticipate food shortfalls, now that scientific advances are able to predict droughts more accurately, and build reserves for use in challenging times.
Another NUL lecturer, Ratjomose Machema, also of the Department of Economics, said while circumstances could at times justify putting in place subsidy programmes, the government should focus on building long term social safety nets for the poor. Any subsidies should also be properly targeted to ensure they help only those in need.
The ultimate solution lay in building a viable economy with equally viable and durable jobs to ensure people took care of themselves.
He urged the government to use the existing social safety nets which he said already existed in the Ministry of Social Development “to alleviate poverty in people’s lives”.
“At a wider economic level, government already has enough social programmes or safety nets that safeguard against the poor. ……These must be used and strengthened to help people who are unable to generate their own income to live,” Dr Machema said.
In the end, subsidies were not sustainable and should only be implemented for short terms. The best solution was to empower people to generate livelihoods for themselves.
According to the World Food Program (WFP)’s Annual Country Report, 2023, published on 2 April 2024, Lesotho has a low Human Development index with a rank of 168 out of 191 countries and remains one of the most unequal countries in the world.
“Almost half of the population is poor (49.7 percent), living below the food poverty line. A strong rural and urban divide marks poverty, with more than 80 percent of the poor living in rural areas……”
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